Top Companies Report

5. Kao

August 6, 2012

Japan
www.kao.co.jp

Sales: $10.0 billion

Key Personnel: Michitaka Sawada, president and chief executive officer; Hiroshi Kanda, president, consumer products; Tatsuo Takahashi, president and chief executive officer, Kao Customer Marketing Co., Ltd; Toshiharu Numata, president, consumer products and chemical business, China; Toshihide Saito, senior vice president, human capital development, global; Ken Hashimoto, senior vice president, procurement, global; Hisao Mitsui, senior vice president, production and engineering, global; Masumi Natsusaka, president, Kanebo Cosmetics Inc.; Katsuhiko Yoshida, president, fabric and home care business unit, global president, consumer products, Asia (except China); Yoshinori Takema, senior vice president, research and development, global.

Major Products: Beauty Care—Sofina, Kanebo, Molton Brown, Bioré, Jergens, Asience, John Frieda, Goldwell; Fabric and Home Care—Attack, Haiter, Magiclean; Human Health Care—Pyoura and Clear Clean oral care, Bub bath additives.

New Products: Jergens Glow & Protect, Sofina Primavista makeup, Attack Neo Antibacterial EX Power liquid laundry detergent, Flair Fragrance fabric softener.

Comments: Corporate sales rose 2.7% to $14.8 billion for Kao’s fiscal year ended March 31, 2012. That’s ahead of the gains posted by both the beauty care and fabric and home care divisions.


Jergen’s New Glow & Protect products.
Kao reported beauty care sales rose just 0.8% to more than $6.5 billion. Sales of prestige cosmetics grew in Japan and premium hair care sales performed well outside Japan, according to Kao. Sales of prestige cosmetics increased 2.2% on the strength of new product introductions. However, Kao noted that the overall downward trend in prestige cosmetics continues in Japan is due to the lingering effects of the earthquake as well as a shift in consumer preference for lower-priced products. With that in mind, Kao introduced new products under its self-selection brands such as Kate and Evita. In other cosmetics moves, the company improved its Blanchir Superior whitening skin care line as well as its Sofina Beauté brand. The company also revamped its sales methods in an effort to get a lift within a declining market.

Sales of premium skin care products rose in Japan on the strength of new Bioré facial cleansers and Bioré U body cleansers. Outside Japan, Bioré sales were strong in Hong Kong, Taiwan and Indonesia. In North America, Jergens sales rose in the hand and body category.


Biore got a new look this year.


Premium hair care product sales fell in Japan, due to a decline in hair coloring product sales, which Kao blamed on market contraction and some tough competition. On the plus side, sales of Merit shampoo and conditioner were strong in Japan. Hair care sales in the rest of Asia were up, driven by the popularity of Liese foam hair color in Hong Kong, Taiwan and Thailand. In North America and Europe, sales of foam hair color, hair styling products and other new John Frieda products, provided a lift.

Meanwhile, fabric and home care sales were up 2.4% to nearly $3.5 billion. Kao is building its environmentally-preferable line through the Neo brand and rolled out Attack Neo Antibacterial EX Power ultra-concentrated liquid laundry detergent. Other top sellers included Wide Haiter EX Power fabric bleach for color fabrics and new Flair Fragrance fabric softener.

Home care sales got a lift due to the popularity of the CuCute dishwashing detergent, Toilet Quickle cleaning wipes, Quickle Wiper dust mops and Resesh Aroma Charge fabric and air freshener.

This year, Kao will change its fiscal year end date to Dec. 31. The company predicts that beauty care sales will rise 1.7% in local currency, while laundry and fabric care sales will increase 2%.

Looking further ahead, Kao’s executive team is committed to furthering growth in Japan, noting that the home country remains its profit base; accelerating globalization in North America and Europe through prestige cosmetics, premium mass skin care and hair care and professional hair care and finally, progressing rapidly toward an eco-chemical business through its Eco-Technology Research Center, which was completed this year and centralizes environmental research functions.


 
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