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Shampoo industry growing steadily.

Steady growth has been recorded for Indonesia's shampoo industry to follow the growing population of the world's fourth most populous country. The country's population was estimated at 238 million in 2010. The expansion of the industry also followed the trend of the country's economic development. The country's shampoo production rose from 31,000 tons in 2005 to 33,000 tons in 2009. The country's production capacity for shampoo, however, remained unchanged from 32,000 tons annually in 2005-2009 periods.

Currently, the country's shampoo industry is dominated by PT. Unilever Indonesia Tbk with its brands of Sunsilk and PT. Procter & Gamble with its brand of Pantene. The two big producers are known as consumer goods producers with products including personal care, skin care, home toiletries, etc.

Competition is sharp in the shampoo market as shown in the intensive advertisements by big producers on television or other mass media. Almost every day shampoo products such as Sunsilk, Clear and Pantene are advertised on television or newspapers of shampoo using well known artists as advertisement stars.

Production capacity stagnant

The country's shampoo production capacity shampoo in 2005-2009 periods was unchanged from 32,000 tons per year with no new investment in the industry.

Production up 2% per year

The country's production of shampoo grew only 2% a year on the average in the period of 2005-2009. In 2005, the production was recorded at 31,000 tons, up to 33,000 tons in 2009. The production already exceeded the production capacity in 2009.

Based on the consumption trend, production was estimated to rise to 34,400 tons in 2010 and to 35,000 tons in 2011.

Shampoo products include ordinary shampoo and treatment shampoo, which is produced partly with herbal basic material. Ordinary shampoo dominates production. See the following table.

Sources : Agro chemical directorate general

Capacity utilization up

Since 2007, the country's shampoo industry has been operating at full capacity to meet growing domestic demand. In 2007, the country's shampoo production already reached 33,700 tons, with a capacity utilization of 105.4%. The capacity utilization fell to 103.3% in 2008 but in 2009 it rose again to 105.4% as shown in the following table.

Big players

PT. Unilever Indonesia Tbk

The company started operation in Indonesia in 1933, known as a producer of bath soap with the brand of Lux. PT. Unilever Indonesia Tbk is he pioneer among the producers of shampoo in Indonesia with the brand of Sunsilk in 1952.

Its first factory is located in Surabaya, East Java. In the first years of its operation Unilever used glass bottle for packaging. In 1970, Unilever launched Sunsilk in plastic bottles.

Sunsilk grew quite fast in production. In 1975, Sunsilk Hitam, was launched and became the most popular variant of Sunsilk. In 1999 another variant of Sunsilk, Fruitarian entered the market.

After Sunsilk succeeded in grabbing a dominant share of the domestic market, Unilever produced new shampoo products with the brands of Lifebuoy, Clear and Dove. Sunsilk is for hair beauty care, clear for hair health care, Lifebuoy as family segment and Dove for hair beauty of premium segment. Dove is more for the treatment of damaged hair while Sunsilk is more match beauty market with more variants for hair beauty--from long black hair to dyed, dry, and falling off hairs.

Currently Unilever operates 6 units of factories in the Jababeka Industrial Estate in Cikarang, West Java and 2 units in the Rungkut Industrial Estates, Surabaya, and East Java. Unilever has 32 main brands of products including personal care, household cleaner, foods, etc. It has 700 branches and around 370 independent distributors helping the marketing of its products all over Indonesia.

PT. Procter & Gamble Indonesia

Procter & Gamble Co (P & G) is a multinational company established in 1837 in the United States. It operates in the industries of personal car, health care and household cleaner. P & G has 54 brands entering the world markets. PT. Procter & Gamble Indonesia (PT. P & G Indonesia) was established in 1989, handling the distribution and marketing of the products of P & G in Indonesia including razor with the brand of Gillette, face treatment (Olay), Toothpaste and tooth brush (Oral B), clothe softener (Downy), battery and flashlight (Duracell) and diaper (Pampers).

In Indonesia P & G sells its shampoo with the brands of Pantene, Rejoice and Head & Shoulders. Currently shampoo Pantene has four variants of anti dandruff, total care, hair fall, smooth & silky, and recently Pantene came up with a new variant Nature Care.

Since 2004 all products of P&G sold in the country are imported from other countries including Thailand, Vietnam, the Philippines and Malaysia.

P & G's factory in Thailand produces skincare and shampoo, in the Philippines produces homecare such as detergent and pampers, in Vietnam produces pampers, powder detergent, and in Malaysia produces snack Pringles. P & G targets to chalk up 5 billion consumers of its products all over the world in 2015. Currently the number of its consumers already reached 4 billion people.

In 2011, PT P & G Home Products Indonesia invested US$ 100 million in its first factory in Indonesia. The construction of the factory that will produce disposable diapers will take 3 years. It will be the first factory in Indonesia to receive LEED (Leadership in Energy & Environmental Design) certification, an international certification granted by Green Building Council of the United States to buildings meeting a number of criteria for an environmentally friendly factory.

The new factory to be built in Karawang, West Java, will; be equipped with modern facilities to produce diapers with the brand of Pampers. Part of the production will be exported to other countries in this region.

Meanwhile, PT. P & G Indonesia plans to cooperate with state plantation company PTPN III to build oleo-chemical factory in the industrial cluster of Sei Mangke, North Sumatra. The project is to better guarantee supply of 200,000 tons of fatty alcohol needed by P & G per year in the next 10 years. P & G needs fatty acid and vegetable oils from Indonesia to support its global operations.

Currently the country's production capacity for fatty alcohol is around 320,000 tons from three producers PT Ecogreen Oleochemicals, PT Musim Mas, and PT Bakrie Sumatera Plantations. The country's production capacity is expected to rise to 784,000 tons after the operation of a factory of the Wilmar Group with a capacity of 464,000 tons per year in Gresik, East Java.

PT. Lion Wings

PT. Lionindo Jaya was established in 1981, as a joint venture between the Wings Group in Surabaya and Lion Corporation of Japan. Lion Corporation is a leading producer of consumer products in Japan producing tooth paste, tooth brush, cosmetics, soap, shampoo, and detergent, dish washing detergent, household cleaners, foods and medicines. Lion Corporation has a chain of subsidiaries in Southeast Asia such as Singa Selatan Sdn. Bhd in Malaysia, Lion Corporation Thailand and Lion Corporation Singapore Pte. Ltd.

In 2004, the name of PT Lionindojaya was changed with PT Lion Wings, after the take over of the majority share of PT Lionindo Jaya by the Wings Group. PT Lionindo Jaya produced and sold various types of consumer goods including tooth paste, tooth brush, household cleaner, etc. Wings have exported part of its production to more than 55 countries all over the world.

PT. Lion Wings produced dish cleaning soap (Mama Lime, Mama Lemon, Mama Apple, Oxy), tooth paste (Ciptadent), Smokers' tooth paste (Zact, Dentor Systema), tooth brush (Ciptadent), baby tooth paste (Kodomo), any mosquito lotion (Lavenda), baby product (Kodomo), tooth brush and tooth paste (Ciptadent and Systema), perfumes (Fresh & Fresh). Lion Wings also produces shampoo with he brands of Emeron, Botanical, Zinc, and Kodomo.

The basic material for PT. Lion Wings is supplied by sister companies including PT Unipack Indosystems for label sachet shampoo and PT Mitra Indotra Abadi for tooth paste boxes.

The Wings Group controls oleo-chemical industry from the upstream to downstream sectors. Together with the Djarum Group and the Lautan Luas Group, the Wings Group took over PT. Ecogreen Oleochemical (PT. EO) from the Salim Group. PT. EO PT. EO is a major producer of oleo-chemical including natural fatty alcohol in the world with a capacity of 110,000 metric tons/year. PT. EO supplies basic materials for the subsidiaries of the Wings Group. Oleochemical is a basic material for body care, soap and detergent, foods, plastics, pharmaceuticals, etc.

PT. Gondowangi Tradisional Cosmetics

The company was established by Mr. Liem Sudarno in 2000 in Jakarta. Previously in 1970, Mr. Liem Soedarno was an exporter of seaweed to France where it as used as a basic material of cosmetics. In 1972 Mr. Liem Sudarno began to produce cosmetics using seaweed as the basic material.

PT. Gondowangi Tradisional Cosmetics (PT. GTK) produces hair care products from natural basic material without chemicals. PT. GTK sells shampoo with the brand of Natur. Currently Natur has been exported to a number of countries such as Malaysia, Singapore, Hong Kong, Australia, South Korea, etc.

In addition to Natur shampoo, PT. GTK also produces skin care with the brand of Natur White and face care product with the brand of Miyagi which consists of whitening day cream, whitening night cream and lightening plus moisturizing soap.

Shampoo exports

Indonesia's exports of shampoo in the 2005-2009 periods grew but not smaller than imports.

In 2009, the country's shampoo exports grew to 8, 000 tons from 5,000 tons in 2005. Currently, there is tens of shampoo products exported from the country including Sunsilk, Clear, Nature, etc.

PT. Unilever Indonesia Tbk, the largest producer of shampoo in the country has exported shampoo to various countries. Exports including shampoo contribute 6% to total exports of PT. Unilever Indonesia. Its export destinations to Malaysia, Singapore, Japan, African countries and Middle East countries.

Shampoo imports

In the period of 2005-2009, Indonesia's imports of shampoo was larger than its exports indicating that domestic production capacity was not enough to meet domestic requirement.

In 2005, imports totaled 12,000 tons, up to 18,000 tons in 2006 and to 27,000 tons in 2009. See the following table.

Imported products

Imported products make up part of the supplies of shampoo in the country. Imported products are mainly those of premium types for the middle to high class consumers.

PT. P & G Indonesia imports and sells only the products of P & G. There are four shampoo products of P & G sold in Indonesia Pantene, rejoice, Head & Shoulders and Herbal Essence.

All products of P&G sold in Indonesia are supplied through imports. Shampoo and skin care products of P&G are imported from P & G Thailand.

Domestic Consumption

Shampoo consumption in the country is assumed to be the same as supply, which is production plus imports minus exports.

Based on the assumption, shampoo consumption in the country in the period of 2005-2009 grew 8.8% per year on the average. In 2009 the country's shampoo consumption rose to 52,000 tons from 38,000 tons in 2005.

The consumption in the following years was estimated to follow the growing trend in the previous year. In 2010, the country's shampoo consumption was estimated to reach 56,000 tons, up again to 61,000 tons in 2011.

Market share

Two large producers--PT. Unilever Indonesia Tbk and PT. P & G Indonesia dominate 90% of the market of shampoo in the country. PT. Unilever Indonesia Tbk has a 60% market share and PT. P & G Indonesia has a 30% share of the domestic market. Other producers split he remaining 10% of the market.

PT. Unilever has its main product with the brand of Sunsilk, which an old brand is dating back to 1933, when it had only one variant. Now Sunsilk has 9 variants Black shine, Anti dandruff, Soft & smooth, Clean & fresh, Hail fall solution, Damage hair treatment, Bouncy curls, Straight & sleek, and Co creation.

In addition to Sunsilk, PT. Unilever produces other shampoo products including Dove, Lifebuoy, and Clear each with different market segments. Sunsilk is for beauty care, clear for hair health and Lifebuoy as family shampoo and Dove for hair beauty of the premium segment. Combined, all products of PT. Unilever have a 60% share of shampoo market in Indonesia.

PT. P & G Indonesia also has four brands of shampoo Pentene, Rejoice, Head & Shoulders and Herbal Essence. PT. P & G has the second largest share or 30% of shampoo market in the country.

The two largest producers compete sharply on the domestic market. Sunsilk is facing Pantene in the competition in the premium market segment and Clear is facing Head & Shoulders in the market of treatment shampoo.

PT P&G Indonesia is set to boost sales of Head and Shoulders to be the leader in the market of anti dandruff shampoo as it is the number one in the world market. The country has large demand for anti dandruff shampoo now dominated by Clear of the Unilever.

The domination of Unilever and P & G is now challenged by PT. Lion Wings with its products of Emeron and Zinc. In the market of herbal shampoo, competition involves PT Gondowangi with its brand of Natur, PT. Mustika Ratu with its brand of Mustika Ratu and PT. Martina Berto with its brand of Sari Ayu.
Table-1
Production capacity of shampoo industry, 2005--2009

Year Production capacity (tons)

2005 32,000
2006 32,000
2007 32,000
2008 32,000
2009 32,000

Sources: Agro chemical directorate general

Table-2
Production of shampoo, 2005--2009

Year Production Growth
 (tons) (%)

2005 31,155
2006 31,778 1.9
2007 33,723 6.1
2008 33,062 -1.9
2009 33,723 1.9
Average growth 2.0

Table-3
Capacity utilization of shampoo industry, 2005--2009

Year Capacity utilization (%)

2005 97.4
2006 99.3
2007 105.4
2008 103.3
2009 105.4

Sources: Agro chemical directorate general

Table-4
Shampoo producers and brands

Producers Brands Types

PT. Unilever Indonesia Tbk Sunsilk Black shine, Anti
 dandruff, Soft & smooth,
 Clean & fresh, Hail fall
 solution, Damage
 treatment, Bouncy curls,
 Straight & sleek

PT. Unilever Indonesia Tbk Clear Ice cool menthol, Complete
 soft care, Anti hail fall,
 Soft & shiny

PT. Unilever Indonesia Tbk Lifebuoy Anti dandruff, Herbal,
 Anti hair fall

PT. Unilever Indonesia Tbk Dove Damage Therapy Cool
 Moisture, Damage Therapy
 Revival, Nourishing Oil
 care, Straight & Silky

PT. Lion Wings Emeron Rose, Anti dandruff, Silky
 moist, Shiny growth,
 Smooth straight, Shining
 black

PT. Lion Wings Zinc Refreshing with Menthol
 and Green Tea, Re-
 Energizing with Ginseng

PT. L'Oreal Indonesia Elseve Liss intense, Volume
 control, Smooth intense,
 Nutritio

PT. Mandom Indonesia Tbk Johnny Soft & Straight, Style &
 Andrean Color, Black & Shiny,
 Extra volume

PT. Martha Tilaar Rudy Ginseng, Sunflower,
 Hadisuwarno Teatree

PT. Martina Berto Sari Ayu Lidah Buaya, Merang,
 Urang- Aring, Wortel,

PT. Mustika Ratu Tbk Mustika Ratu Merang, Daun Waru, daun
 Landep, Teh Hijau, Bayam

PT. Gondowangi Tradisional Natur Ginseng
Cosmetics

Producers Sizes (ml)

PT. Unilever Indonesia Tbk 90, 180, 200, 360

PT. Unilever Indonesia Tbk 90, 180, 360

PT. Unilever Indonesia Tbk 90, 180, 360

PT. Unilever Indonesia Tbk 90, 180

PT. Lion Wings 5, 50, 100, 200,
 300, 500

PT. Lion Wings
 100, 200

PT. L'Oreal Indonesia 50, 200, 250, 400,
 500

PT. Mandom Indonesia Tbk 250

PT. Martha Tilaar

PT. Martina Berto 100, 170

PT. Mustika Ratu Tbk 175

PT. Gondowangi Tradisional
Cosmetics

Sources: ICN

Table-5
Exports of shampoo, 2005--2009

Year Volume (tons) Value (US$ 000)

2005 5,803 11,915
2006 6,112 11,675
2007 7,380 16,250
2008 7,253 17,770
2009 8,641 20,399

Sources : Agro chemical directorate general

Table-6
Imports of shampoo, 2005-2009

Year Volume (tons) Value (US$ 000)

2005 12,957 45,372
2006 18,425 49,316
2007 18,378 74,985
2008 18,831 76,889
2009 27,640 83,859

Sources: Agro chemical directorate general

Table-7
Shampoo imports

Producers Importers Brands

Procter & Gamble, PT. P&G Indonesia Pantene
Thailand

Procter & Gamble, PT. P&G Indonesia Rejoice
Thailand

Procter & Gamble, PT. P&G Indonesia Head & Shoulders
Thailand

Procter & Gamble, PT. P&G Indonesia Herbal Essence
Thailand

Producers Types Sizes (ml)

Procter & Gamble, Pro V, Long black, Anti hair 5, 90, 180, 200,
Thailand fall, Anti dandruff, 360, 700, 950
 Nourished shine , Smooth &
 silky, Nature care

Procter & Gamble, Manageable black, Anti hair 100, 180, 360
Thailand fall, Fruity

Procter & Gamble, Menthol, Cool menthol, 75, 180, 360
Thailand Smooth & silky, Anti hair
 fall

Procter & Gamble, Anti dandruff, Classic 90, 180, 200, 360
Thailand clean, Hair Endurance,
 Smooth & silky, Clinical
 strength, Citrus breeze,
 Scalp care, Sensitive care,
 Extra volume, Refresh, Ocean
 life,

Sources: ICN

Table-8
Domestic consumption of shampoo, 2005--2009
(Tons)

Year Production Exports Imports Consumption

2005 31,155 5,803 12,957 38,309
2006 31,778 6,112 18,425 44,091
2007 33,723 7,380 18,378 44,721
2008 33,062 7,253 18,831 44,640
2009 33,723 8,641 27,640 52,722

Sources: ICN processed

Table-9
Market share, 2011

 Market share
Brands Producers (%)

Sunsilk PT. Unilever Indonesia Tbk 30.0
Clear PT. Unilever Indonesia Tbk 24.0
Lifebuoy PT. Unilever Indonesia Tbk 5.0
Dove PT. Unilever Indonesia Tbk 1.0
Pantene PT. Procter & Gamble Indonesia 23.4
Rejoice PT. Procter & Gamble Indonesia 4.0
Head & Shoulders PT. Procter & Gamble Indonesia 2.6
Lain-lain 10.0
Total 100

Sources: ICN
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Title Annotation:INDUSTRY
Publication:Indonesian Commercial Newsletter
Date:Sep 1, 2011
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