Shiseido Expands Indonesia Operations with Joint Venture

  Shiseido Expands Indonesia Operations with Joint Venture

Business Wire

TOKYO -- April 10, 2014

Shiseido (TOKYO:4911) has concluded a joint venture agreement with PT Sinar
Mas Tunggal, a group company of the Indonesian conglomerate, Sinar Mas Group.
Shiseido Co., Ltd. and the Sinar Mas Group will hold equity shares of 65% and
35%, respectively of the newly established PT Shiseido Cosmetics Indonesia.
Business operations are scheduled to commence in July 2014.

Masahiko Uotani, President and CEO of Shiseido (right) shakes hands with
Franky O. Widjaja, Vice Cha ...

Masahiko Uotani, President and CEO of Shiseido (right) shakes hands with
Franky O. Widjaja, Vice Chairman of Sinar Mas upon establishment of new joint
venture company. (Photo: Business Wire)

In the Indonesian market, which offers high growth potential, Shiseido will
strive to boost sales not only by continuing to foster its SHISEIDO global
brand promoted around the world, but also by stepping up focus on the
masstige^* market. This sector is the largest cosmetics market zone and is
anticipated to maintain strong growth.

* Masstige, coined from “mass” and “prestige,” refers to a category that is
“more expensive than mass-produced products, but more moderately priced
compared to prestige products.”

Indonesian Market

Indonesia has the world’s fourth largest population of 244 million (2012),
about 60% of which are under the age of 35. Notably, the younger population in
urban areas is growing at a remarkable pace, generating anticipation for
further growth in income and consumption. The Indonesian market as a whole has
achieved rapid recovery from historic economic downturns and the cosmetic
market specifically has been growing at a robust annual rate of over 10%,
which is projected to be sustained according to Shiseido’s estimates.

Background of the Establishment of the Joint Venture and Future Marketing

Shiseido initially launched sales activities in Indonesia in 1958. Since 1994,
the Company has been steadily increasing sales by marketing its products
through its distributor, PT Dian Tarunaguna, a Sinar Mas Group company.
Exploring the possibility of direct investment in the high-potential
Indonesian market, Shiseido decided to establish the joint venture by taking
the existing collaborative relationship with the Sinar Mas Group to new

In Indonesia, in addition to its SHISEIDO global brand, Shiseido launched its
highest-end brand clé de peau Beauté in 2010, available in prestige department
store channels. Going forward, the Company will not only reinforce its
prestige product category, but also strengthen marketing efforts for the
masstige segment with Za, a skincare and makeup masstige brand that targets
Asian women in their 20s.

Shiseido’s President and CEO Masahiko Uotani said, “We are truly grateful for
the contributions Sinar Mas, the most powerful business partner in Indonesia,
has made in developing the Shiseido group brands. With these new joint
efforts, we will start a new era of the Shiseido group brands to bring an even
stronger value to customers in Indonesia.”

Upon establishment of the joint venture, Mr. Franky Widjaja, Vice Chairman of
Sinar Mas, stated, “We are delighted to have been able to establish PT
SHISEIDO Cosmetics Indonesia jointly with Shiseido. We will further strengthen
our marketing efforts, and develop the Shiseido group brands into top brands
in Indonesia, brands loved by many customers.”

Outline of the New Company
Company Name             PT SHISEIDO Cosmetics Indonesia
Location                  Jakarta, Indonesia
Investors                 Shiseido: 65%, Sinar Mas Group: 35%
Capital                   50.0 billion rupiah
Representative Director  Yu Okazawa

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Shiseido Co., Ltd.
Satoshi Hirota, +81-3-3572-5111
PR Department
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