Japan's Kao Corp poised to expand footprint in Asean

Corporate August 07, 2014 01:00


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KAO CORPORATION, a leading Japanese manufacturer of consumer products and chemical ingredients, has set a plan, which will run until 2018, to boost its business presence and manufacturing facilities in Asean, said Kazo Kozo Saito, president for consumer p

He said that as part of the plan, Kao’s headquarters in Japan would invest about 20 billion yen (Bt6.3 billion) each in Thailand and Indonesia to increase its manufacturing capacity as well as launching new production lines, such as for fabric care, sanitary napkins and baby products.

In Thailand, the company operates a manufacturing complex at Amata Nakorn Industrial Estate in Chon Buri province.

Thailand will be a centre for exporting consumer goods, such as skincare, hair-care, powdered and liquid laundry detergent, sanitary napkins and diapers, into neighbouring markets to cash in on the implementation of the Asean Economic Community next year.

In addition to Thailand, Kao Corp has manufacturing facilities for consumer goods in Indonesia and Vietnam.

The plant in Indonesia mainly supplies products to its domestic market, while the Vietnam facility exports skincare products back to Japan and some other markets.

“Under the plan to grow our business in Asean, we hope to increase the business contribution from Asean from currently 7 per cent to more than 10 per cent by 2018,” Saito said. “We also want to grow our business in Asean by at least 10 per cent every year.”

Saito said the company had invested about Bt600 million annually in its manufacturing complex in Amata Nakorn over the past three years, mainly to increase its capacity to respond to higher demand both in Thailand and neighbouring markets.

He said the company currently exported consumer products from Thailand to Myanmar, Laos and Cambodia, but expected to open new markets for export from here, especially the Middle East and South Asia, by 2018.

“To help facilitate our business in Thailand, we would like to urge Thailand’s authorities to simplify their customs process as well as maintain investment privileges given to Japanese investors,” Saito said.

He said Kao Corp last year achieved Bt13 billion in sales altogether from its two subsidiaries in Thailand, Kao Industrial (Thailand) and Kao Commercial (Thailand). About 70 per cent of sales were consumer goods, and the rest chemical ingredients.

Kao offers a variety of chemical products and services for industries such as ironing, electronics and agriculture, and raw materials for consumer products. The company is also a pioneer in the production of naphthalene sulphonate, which helps make concrete more solid. About 30 per cent of its chemical products are exported, to many countries including Malaysia, Singapore, Indonesia, the Philippines, Vietnam, Myanmar, Australia and India.

Hiroyuki Kumazawa, president of the corporation’s two Thai subsidiaries, said the company was looking into opening a new facility in Thailand, especially for goods such as sanitary napkins that have strong domestic demand.

“We want to increase the export contribution of our facility in Thailand from a very small base currently to about 10 per cent in the next two years, and up to 15 per cent by 2018,” he said.

 Kumazawa said the company expected sustainable annual growth of 6-7 per cent between now and 2018. However, if the plan to set up a new factory in Thailand is successful, annual growth is expected to be higher than 10 per cent.

“In my point of view, Thailand is still active in its domestic consumption despite the local political difficulty. The economic index [economy] is rebounding and in good shape in the second half of this year and the consumer-product market is expected to continuously expand.”