July 19, 2010

DuPont set to double business sales by 2015

Global giant DuPont expects its sales and investment in Indonesia to at least double in five years, citing positive progress in the local economy.

DuPont, an industrial materials producer, has been operating locally for 35 years and has invested more than US$100 million in Indonesia during that time. The company estimates its Indonesian sales will reach around US$200 million this year, DuPont Asia Pacific Limited president Carl J. Lukach said.

"My hope is to more than double our business [in Indonesia] within five years. More than double in terms of sales, employment and investment," said Lukach. He added that the company had set an optimistic target for its Indonesian operations, because of the positive outlook in the local economy.

"The government policy seems to be going well. I am very pleased to see the government's focus on the removal of corruption from the system. This is a very important thing for DuPont in doing business," Lukach said, adding that Indonesia was also ideal for DuPont to grow its business because it was nearly self-sufficient in terms of raw materials and energy, and less dependent on global economic factors, and also had a growing skilful labour force.

DuPont's sales in emerging markets grew by 80% over the past five years, according to the company's reports. In 2008, DuPont booked US$9-billion sales in emerging markets, accounting for nearly one-third of its total sales for 2008, which totalled US$30.5 billion. Because of the global crisis, DuPont sales in the emerging market dropped by 10% in 2009, but the company estimates its emerging market sales will rebound and reach approximately US$13 billion by 2012.

About 40% of the US$200 million in sales expected to come from Indonesia this year is projected to come from DuPont's agriculture-related products. PT DuPont Indonesia president director George Hadi Santoso said his company had a big opportunity to expand its agriculture business, citing the example of corn plantations. According to George, of the total corn plantation area in Indonesia, only one-third of it was using hybrid seed, while the remaining two-thirds were using traditional seed.

"Two-thirds of the area present us with an opportunity to convert from traditional seeds to hybrid seeds," he said. DuPont is often referred as the world's third-largest chemical producer, but Lukach said the contribution of its chemical businesses to its total sales had decreased to between 15-20%.

In Indonesia, DuPont operates 11 of its 13 business lines. The company's top-five businesses in Indonesia are Pioneer Hi-Breed (producing hybrid corn and rice seeds), crop protection products, packaging and industrial polymer, Titanium Dioxide and Protection Technology. DuPont runs four manufacturing facilities in Indonesia. Its crop protection products plant is in Sidoarjo and Pasuruan, its Hybrid Parent Corn Seed plant is in Malang, and its Powder Coating plant is in Cikarang.