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Kao to build new manufacturing plant in China

By Katie Bird , 04-Jan-2011

Japanese-headquartered Kao Corporation has invested in a new manufacturing plant in the Anhui province, China, in order to reinforce its production base of consumer goods in the country.

This is the second consumer goods plant the company will have in the country, the first is in Shanghai, and the 125 000 square metre site is expected to significantly increase capacity in the region.

Several billion yen will initially be invested in the plant which will be constructed in the National Hefei Economic and Technological Development Area in Hefei city and set to open during 2012.

According to Kao, the area was chosen as it has good infrastructure as well as good human resources.

Chinese market expanding rapidly

China is an important market for the company and one that has been expanding over recent years.

Although the Asia Oceania region, which in Kao's financial reporting includes China but not the domestic market of Japan, makes up a relatively small proportion of the company’s turnover, it is expanding rapidly.

For the six months ending September 30, the Asia Oceania region brought in $881.7m, compared to $5.5bn from Japan. However, in Japan sales fell by 1.7 per cent unlike the 18.7 percent sales growth experienced in Asia Oceania.

The beauty market has also been highlighted as a strong one in China by the company, with a number of high performing brands.

Kao’s brands include Bioré, Kanebo, John Frieda and Molton Brown.