07.30.07
3. Kao
Japan
www.kao.com
$8.7 billion
Sales:
$8.7 billion for personal care, household care and cosmetics. Corporate sales: $10.5 billion. Net income: $603 million for the year ended March 31, 2007.
Key Personnel:
Takuya Goto, chairman; Motoki Ozaki, president and chief executive officer; Toshio Hoshino, senior executive vice president and president, Nivea Kao Co., Ltd.; Takuo Goto, executive vice president and senior vice president, global production & engineering and vice president, environment & safety management; Hiroshi Kanda, executive vice president, global consumer products and vice president, global marketing development; Norihiko Takagi, executive vice president and president, international business, consumer products; Shunichi Nakagawa, executive vice president, vice president, legal & compliance-global and vice president, global corporate communications; Toshihide Saito, president, global chemical business; Shinichi Mita, vice president, global accounting & finance; Tatsuo Takahashi, president and chief executive officer, Kao Customer Marketing Co., Ltd.; Masato Hirota, president, global beauty care business; Toshiharu Numata, senior vice president, global R&D; Toshio Takayama, chairman, Kanebo Cosmetics Inc.Major Products: Household products including Attack laundry detergents and Quickle hard surface cleaners; Personal care products including Sofina cosmetics, Lavenus hair care, Kanebo cosmetics, and Jergens and Curel skin care.
New Products:
Personal care—Segreta hair care, Biore Marshmallow skin care, Bioré U Apple Mango body cleanser, Blauné Point Cover hair colors and Liese Supply citron-scented hair styling water, Medicated Pyuora toothpaste and dental rinse; Molton Brown Cosmetics (acquisition). Household care—Attack All In detergent, Style Care Mist for Clothing and Humming Flair Flower Blossom Essence fabric softeners; Quickle Wiper Handy household duster; Cosmetics—Hada•Ka and Phytomax skin care, Kanebo Impress premium skin care. To be launched: Style Fit liquid and powder detergents (August).Comments:
Corporate sales soared more than 25% last year primarly due to the inclusion of full-year results of Kanebo Cosmetics, a company that Kao acquired the previous year. That acquisition helped prestige cosmetics sales rise 243% to $2.5 billion. That tremendous gain came at a time when the Japanese cosmetics market remained flat. During the year, Kanebo launched Impress, a prestige skin care brand, while Kao Sofina introduced Hada•Ka, a new skin care brand and Phytomax, a drugstore brand. The success of Kanebo is the big news at Kao, but other businesses reported gains too. Personal care sales rose 3.6% to $1.6 billion and fabric and home care sales increased 2.6% to nearly $2.1 billion. Overall, domestic sales surged 30% while international sales increased 17%.Personal care sales got a boost with the launch of Bioré Marshmallow Whip, which helped Kao gain the No. 1 position in the facial cleanser market. However, sales of shampoos and conditioners were flat due to increased competition. While the personal care category managed to keep price erosion at bay, the household sector was not so fortunate. Kao noted that, reflecting changes in society, consumers are adopting new attitudes toward housework and as a result, consumer prices are trending lower. To survive in these conditions, Kao is strengthening its core brands by adding value. In laundry detergents, Kao renewed Attack with superior cleaning power even when washing large loads. Kao also launched Attack All In, which contains bleach and fabric softener. Meanwhile, sales of dishwashing detergents rose with the launch of a citric acid-based automatic dish detergent.
Kao Reorganizes
Japanese society is undergoing tremendous changes. The declining birthrate, aging population and the rise of single households are having a dramatic impact on how consumer product companies conduct business.
Recognizing this, in April Kao reorganized into four business units:
• Beauty Care,
• Human Health Care,
• Fabric and Home Care, and
• Chemical.
Concurrently, Kao reorganized every functional division, including R&D, production and sales. As part of the structural reorganization, Kao Hanbai Co., Ltd. (consumer products) and Kao Cosmetics Sales Co. Ltd. (prestige cosmetics) were merged into Kao Customer Marketing Co., Ltd., a new entity. Kanebo Cosmetics Inc., remains a Kao Group company. The reorganization is intended to create products with value for consumers and retailers.