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T L’Oréal Indonesia, the local subsidiary of French cosmetics giant L’Oréal Group, said that the unit’s plump growth of 30 percent annually, thanks to sure-footed market demands, was what convinced the group to establish their largest factory here.

Vismay Sharma, president of PT L’Oréal Indonesia, noted that the group saw their net sales touch ¤11.2 billion (US$14.1 billion) in the first half of 2012, a figure 10.5 percent higher than the same period last year.

However, sales augmentation in Indonesia was far more brisk, recording more than 30 percent growth during the same time frame, he pointed out.

“This makes L’Oréal Indonesia one of the fastest growing subsidiaries within the L’Oréal Group,” he said on Wednesday.

The urban beauty market in Indonesia, he pointed out, was worth Rp 15 trillion (US$1.57 billion) in 2011, and was expected to significantly increase in the next few years.

He added that the “performance of L’Oréal Indonesia this year will continue on the same path of rapid growth”, expanding by 30 percent in terms of revenue and the number of items sold in the market.

L’Oréal Indonesia offers 15 of the 27 global brands under the group, including L’Oréal Professionnel and Kérastase in the haircare category, as well as Lancôme and Shu Uemura cosmetics.

“There are very few markets for L’Oréal that have given sustained growth of over 30 percent,” he said referring to Indonesia.

He further added that besides Indonesia, BRIC countries — Brazil, Russia, India and China — were strong markets as well. Meanwhile, Western Europe and North America expanded at a slower rate as the financial crisis there eroded consumer confidence.

Vismay, quoting Nielsen research, noted that consumer confidence in Indonesia was 117 points, while India came in at 122 points. Greece and Portugal were very low, with consumer confidence floundering at 30 and 36 points respectively.

Indonesia had turned into a big market for L’Oréal, which entered the country in 1979, given that its strong private consumption made it resilient against “global fluctuations”, he said.

Indonesia attained an economic growth rate of 6.4 percent year-on-year in the second quarter, higher than the 6.3 percent in the previous quarter.

He added that L’Oréal’s promising growth in the country was what prompted the company to build their biggest manufacturing plant, worth ¤100 million, here.

The factory is scheduled to be inaugurated on Nov. 7.

“The factory will produce skincare and haircare products for the Asian market,” he noted.

Haircare products remain a strong foothold for L’Oréal.

Michel Toth, L’Oréal Indonesia general manager for the professional product division, pointed out that the professional beauty market – or salon business — was worth Rp 710 billion, with annual growth estimated at 10 percent.

“The professional beauty market makes up 4 percent of the total beauty market,” he said.

He said there were more than 90,000 salons across Indonesia, with 69 percent of the market consisting of salons that offered services costing an average of Rp 55,000 to Rp 100,000. These salons, he said, served price-conscious customers.

L’Oréal itself provides three brands — Matrix, L’Oréal Professionel and Kérastase. Matrix, sold at lower price points, targets the mass market, while the more expensive L’Oréal Professionel and Kérastase aim for the premium and luxury markets, respectively.

According to Toth, the growth of the middle class had triggered an increase in the number of salons, as more and more people within this social segment demanded better service.

As a result, the Matrix brand was in the highest demand brand on the market.

“However, there’s a demand for Kérastase too. We see very healthy growth in this division,” he noted.