For years, PT Unilever Indonesia has been the darling of both local and international investors. A pure play on Indonesia’s consumer growth story, yet majority owned by one of the world’s most respected consumer goods firms, Unilever Indonesia was superbly managed—in recent years boasting gross profit margins of 50%, and EBIT margins above 20%. The stock has risen over 3,000% since 2000, putting the firm among the top ten largest market capitalizations on the IDX. The company estimates there is at least one Unilever product in every household in the country.
Then Indonesian economy soured last year, with GDP falling below 5% for the first time since 2009. Many of the company’s bulls became bears, issuing rare “sell” recommendations. Bloomberg late last year even ran an article entitled: Unilever Indonesia’s 3000% Rally Dries Up as Sell Calls Mount.
None of this discouraged Unilever’s President Director Hemant Bakshi, 52. “Indonesia is a great market to be in,” he says in an interview on the top floor of Graha Unilever in Jakarta. “Difficult times are times of opportunity for us.” The stakes are high for Hemant. Indonesia has become the company’s fifth largest market in the world, contributing more than 5% of global sales (out of more than 150 countries where Unilever is present).
Yet the company, which has more than 80 years of history in the country, shows no signs of slowing down. Instead, Hemant and his team are rising to the challenge, earning Unilever Indonesia the rank of number one on the 2016 list of Forbes Indonesia’s Best of Best companies for long-term performance. Just one example: the company opened a new factory in Cikarang last August to support the growth of its food business, spanning 63 hectares (making a total of nine factories across the country). The food business last year rose 12% to Rp 11.1 trillion, representing 30% of total revenues.
The company is also planning soon to move into spacious new offices on the outskirts of Jakarta, that will include a gym and other facilities. Overall, Hemant says the company is planning to invest Rp 2 trillion in Indonesia this year alone, and recently signed an MOU to invest $500 million over the next five years to increase its manufacturing capacity. It is looking at multiple growth opportunities in the country, both internal and external. “Indonesia is an investment market; we would be very keen to look at any inorganic growth opportunities,” says Hemant.