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onsumer goods giant PT Unilever Indonesia is to spend Rp 1.2 trillion (US$85.78 million) in capital expenditure (capex) this year, mainly for factory expansions, despite the ongoing economic slowdown.

The publicly listed company also plans to spend the money on strengthening its distribution and logistics capacity, particularly in areas outside Java.

Unilever Indonesia, the local arm of Anglo-Dutch multinational company Unilever NV and Unilever Plc, said the allocated capex '€” higher than last year'€™s Rp 1.1 trillion '€” was taken from its internal cash.

Unilever Indonesia governance and corporate affairs director Sancoyo Antarikso said the company had disbursed around Rp 620 billion as of August and would spend the remainder in the second half.

'€œThe funds are to expand our personal care, home care and food and refreshment factories across the nation,'€ he said Tuesday on the sidelines of the company'€™s plant inauguration at the Jababeka industrial zone in Cikarang, West Java.

'€œUnilever Indonesia'€™s investment plans are always long term so that they keep going despite the economic situation,'€ he said.

The company, which started its operation in Indonesia in 1933, inaugurated on Tuesday its newest soy sauce and instant spices factory in the presence of, among others, Industry Minister Saleh Husin.

The plant construction, which started in 2013, cost Rp 820 billion in investment and is set to employ around 600 workers who will package Bango soy sauce and produce Royco and Knorr instant spices.

The new plant sits on a 63,000-square-meter plot of land and has a production capacity of 7 billion units of packed spices and soy sauce for both local and export markets.

According to the company, exports contributed around Rp 2 trillion, or more than 5 percent of the company'€™s Rp 35 trillion turnover value last year.

The new Cikarang plant construction is part of the company'€™s five-year investment plan totaling Rp 8.5 trillion since 2010.

Besides the newly inaugurated plant, the Rp 8.5 trillion of investment was also disbursed to an existing plant in Rungkut, Surabaya, East Java, and a new one in Sei Mangkei, North Sumatra, to support brand and human resources development programs as well, said Sancoyo.

In March, Unilever Indonesia started operation of its oleochemical plant in the Sei Mangkei special economic zone, whose investment reached Rp 2 trillion and production capacity was 200,000 tons annually. The launch of the plant is planned to take place in November.

Currently, the firm that holds 49 consumer goods trademarks has nine plants including those in Rungkut, Sei Mangkei and Cikarang.

Unilever Indonesia president director Hemant Bakshi said his company saw the bearish economy as a time to strengthen and expand its business.

'€œSo that when the situation gets better, we can profit more,'€ he said.

Despite the gloomy global economy and a recent report by market research firm Nielsen that shows the consumer goods industry booked a negative number in volume this first half, Unilever Indonesia'€™s business has recorded growth.

According to the company'€™s data published by the Indonesia Stock Exchange (IDX), Unilever Indonesia reaped Rp 18.80 trillion (US$1.35 billion) in revenues as of June. That was 6.9 percent higher than Rp 17.58 trillion it pocketed last year. Its net profit also expanded by 2.8 percent yoy from Rp 2.85 trillion to Rp 2.93 trillion.

However, the cost of goods sold grew by 3.6 percent year-on-year (yoy) to Rp 9.27 trillion from Rp 8.95 trillion.

Minister Saleh said that the food and beverages industry played a significant role in Indonesia, Southeast Asia'€™s largest economy.

'€œThe industry contributes 31.20 percent to the gross domestic product [GDP] value of non-oil and gas processing industry, of which the non-oil and gas industry contributes 86.89 percent to the processing industry, or 21.02 percent to the national GDP,'€ he said. (prm)