01/06/2012 (Jakarta Globe) - Unilever, one of the world’s top producers of consumer goods, plans to build a manufacturing factory in Sumatra to create an export base for its palm oil products.

The Netherlands-based company will invest more than $110 million for the factory, Biswaranjan Sen, who manages the supply chain at Unilever Indonesia, said on Tuesday. The factory will make 170,000 tons of “specialized derivative” products of palm oil annually, he said, which would be one of the world’s top production outputs.

“We are in an advanced stage of discussion with the government and will start [construction] as soon as we line up the technology and money,” he said after the company’s annual meeting in Jakarta.

He added that the construction could start somewhere in the second half of this year, with commercial production beginning by the end of next year.

The factory will help produce skin care products, mostly for export.

“We’re looking at Indonesia as a large export base in the years to come,” he said.

He added that in the past several years, the company has invested about $800 million in Indonesia, including capital expenditure of 350 million euro ($438 million) from 2010 to 2012, and expects that spending to continue. “I see no reason to slow down; if anything, it should accelerate,” he said, not providing a specific figure.

Peter ter Kulve, the president commissioner at Unilever Indonesia, said a sister company would manage the operation in Sumatra, controlling both the quality and sustainability of production according to Unilever’s standards.

He said he was confident Indonesia’s economic growth would help support Unilever’s global operations, especially amid the European debt crisis.

“Europe is not an easy place to do business right now,” Ter Kulve said. “Fortunately, the United States is stabilizing and gaining momentum.”

He said 55 percent of Unilever’s global turnover came from emerging markets in Asia, Latin America and Africa. Meanwhile, Indonesia contributed $1.8 billion of the $48 billion global turnover last year.

“This [country] is a growth territory, so we believe there is a lot of economic growth coming from here,” Ter Kulve said. “We believe Indonesia will grow at very high rate many years to come.”

Maurits Lalisang, the president director of Unilever Indonesia, said that in the first quarter the company posted net income of Rp 1.2 trillion ($128 million), up 18 percent from the same period last year. He expects profit growth to continue this year.