Kao starts construction of $165m eco-friendly research center

By Simon PItman

- Last updated on GMT

Related tags Personal care products Research and development Kao

Kao has unveiled plans to build a ¥16bn ($165m) Eco-Technology Research Center (ETRC), in a bid to develop a new generation of green cosmetics.

The Japanese company, which is one of the world’s biggest personal care players, will start construction in January of 2010 and expects to finish in February, 2011.

The facility will be situated in Wakamaya Complex, on the outskirts of Wakayama city, located at the southern tip of Japan’s main island, and when it is finished it will be Kao’s largest research and development facility, at 23,000 square meters.

The ultimate aim will be to develop consumer goods, including a complete spectrum of personal care products, with a lower carbon footprint into the manufacturing process.

Products with greener credentials

Likewise, the company is also aiming to market products with greener credentials, by developing, for example, personal care products with more eco-friendly ingredients and packaging.

The company says that product development will take place at the ETRC Pilot Research Builidng, while manufacturing process development will take place in another part of the facility, called the Plant Biomass Research Building.

“Kao places ecology at the center of its management and aims to contribute to the wholehearted satisfaction and enrichment of the lives of people globally,”​ the company said in a statement that outlines its medium- and long-term business objectives.

Medium-term objectives for 2020

Stating that it wants to achieve its medium-term objectives by 2020, the company says it will be advocating reduced CO2 emissions for consumer goods manufacturing, minimized water consumption during product use and the implementation of measures to protect biodiversity.

Last year Kao said that it wanted to fully integrate its logistics with Kanebo, having acquired the company in 2005, as part of plans to increase synergies and cost savings between the two businesses.

These plans include the two main logistics operations in Kansai and Hokkaido have now undergone the systematic integration of the logistics operations, which was completed in November 2007.

Meanwhile the Ishikari Logistics Centre started operations in March 2008, with the aim of being an integrated consumer and cosmetics products distribution centre for both Kao and Kanebo product lines.

According to the plans, a network of integrated logistics solutions will be established throughout Japan by 2010 to serve the companies' mutual customer base.

By this time the two companies say they are aiming to achieve collective cost savings of approximately ¥5bn (€31.5m) created by the synergies from the collective logistics operations.

At the beginning of this year Kao cut its forecasts for the fiscal year in light of the deteriorating economic landscape, reducing its sales forecast by 3.4 percent for the fiscal year ending March, 31 to ¥1.33bn ($14.81bn) after posting a 0.4 percent increase in turnover for the nine months ending December, 31.

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