Kao Overview
We put our heart into our products. They’re our way to make your day better, brighter, and more beautiful. Kao Overview 2017
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CEO Message
Towards a Global Presence The Kao Group has made the Kao Way, the
Fiscal 2017 is the first year of K20, the Kao
Group’s corporate philosophy, the foundation
Group Mid-term Plan for 2017–2020. Targeting
of all our corporate activities. Our mission is to
even greater future growth, K20 is built around
enrich the lives of people globally and contribute
three commitments: to foster a distinctive
to the sustainability of the world.
corporate image; to maintain profitable growth;
Since the company’s founding in 1887, Kao has been delivering unmistakable value to people
and to provide returns to all stakeholders. The environment, health, aging and hygiene
everywhere. Our consumer products promote
are all key challenges, and Kao is tackling them
cleanliness, beauty and health, while our
by creating new value that leverages the Group’s
chemical products contribute to the development
collective strengths. As we transform ourselves to drive change,
of diverse industries. In 2009, we unveiled the Kao Environmental
Kao will remain attentive to people’s needs and
Statement. By striving to reduce environmental
work to become a company that enjoys global
impact across every aspect of business, and
support.
by constantly searching for sustainable raw materials, we are helping to conserve the natural environment and contribute to social sustainability.
Michitaka Sawada President and Chief Executive Officer
The Kao Way
Kao Overview 2017
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Yoki-Monozukuri at Kao
Creating new value through a consumer driven approach Kao’s Consumer driven approach is expressed as Yoki-Monozukuri*, a fundamental commitment to user satisfaction. Yoki-Monozukuri results from painstaking quality assurance by all employees. This stance, which dates all the way back to our founding, enables us to offer products of unique value that bring a breath of fresh air to everyday life.
Yoki-Monozukuri
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Kao Overview 2017
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pment velo De
Research and De ve l
t en pm
Marketin ga nd
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*We define Yoki-Monozukuri as “a strong commitment by all members to provide products and brands of excellent value for consumer satisfaction”.
In
Consumer Driven Principle
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a cti
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Kao Overview 2017
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Yoki-Monozukuri
Yoki-Monozukuri at Kao
Careful exploration of consumer needs leads to products that surpass expectations We create products that feature innovative technologies and reflect a careful exploration of consumer needs. We then ensure that each product has clear benefits and is easy to choose at the point of purchase. The entire Kao Group works together to advance Yoki-Monozukuri, and approach the goal of true consumer satisfaction.
R&D harnessing sensory and scientific approaches offers a deeper understanding of beauty Kao Group’s cosmetics research facility, the Beauty Research & Innovation Center, was the first place in Japan to deploy functional MRI (fMRI), which can analyze brain activity such as emotions. Then, with the installation of COCOLAB, a research space for exploring emotional value, Kao broke new ground in beauty R&D by achieving integrated access to science and kansei: emotion linked to perception.
Digital marketing that sharpens understanding of consumers The new Data Science Laboratory is a key facility for deepening our understanding of an increasingly diverse customer base. From a vast sea of data, we can now precisely identify consumer preferences and needs. The Data Science Laboratory will facilitate collaboration both inside and outside the company, enabling Kao to explore the potential of empathetic digital marketing.
Japan’s first cross-industry, crosscompany trailer relay transportation system In an initiative supported by a major logistics company, Kao’s new trailer relay transportation system lets truck drivers exchange trailers at a relay point. This enables them to make short-haul, same-day runs, reducing their working hours while improving operational efficiency, as well as significantly lowering costs and CO2 emissions.
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Kao Overview 2017
Kao Overview 2017
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Consumer Driven Principle
Yoki-Monozukuri at Kao
Consumer feedback generates products that truly resonate The Genba is where the action is, on the front line of everyday business life. Kao is committed to understanding every aspect of how people actually live: their lifestyle Genba. To offer people an even better, more satisfying lifestyle, we must listen to those who use our products, and identify exactly what they want, their fundamental needs. By using this information in the development
The Raku-raku Eco Pack Refill, so easy to use The Raku-raku Eco Pack Refill was developed in response to consumer calls for a refill product for viscous liquids like shampoos and conditioners. The pack is easy to open and helps to reduce waste. You simply set it upside-down on top of the bottle for a quick refill with no spills and no liquid wasted.
Indented notches on shampoo bottles for fingertip identification “I wish you could make it easier to tell the shampoo from the conditioner when I’m washing my hair with my eyes closed.” Taking that kind of comment into consideration, along with the needs of the visually impaired, in 1991 Kao begin to add tactile indicator notches to the side of all shampoo bottles.
process, we can deliver products that both delight and surprise.
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Kao Overview 2017
Kao Overview 2017
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Global Expansion
Providing high-value products and services in some 100 countries and areas A satisfying, enriching life for people everywhere. Kao’s business is expanding globally across two
Canada
Denmark
fields in particular: the Consumer Products Business, which is designed to enhance cleanliness, beauty,
Norway
Sweden
and health; and the Chemical Business, which contributes across the board to industrial development.
Germany
Finland
The Netherlands
Russia
Principal Locations and Business Development
Mexico
United Kingdom
Beauty Care Business Human Health Care Business
Spain
Fabric and Home Care Business
France
Chemical Business
Europe Brazil
Belgium Switzerland
Korea China
Japan
Italy Austria
Hong Kong
Taiwan Czech Republic
Vietnam
The Philippines
Thailand Malaysia
Americas
USA
South Africa
Asia
Singapore Indonesia Australia
Kao Corporation
Kao (China)Holding Co.,Ltd. Kao Industrial (Thailand) Co., Ltd.
Kao Corporation S.A.
Kao USA Inc.
New Zealand
PT Kao Indonesia
Kao Germany GmbH
Quimi-Kao, S.A. de C.V.
* Please visit our website for a list of Kao Group companies. http://www.kao.com/group/en/group/gateway.html 10
Kao Overview 2017
Kao Overview 2017
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Consumer Products Business
We believe in the beauty of everyday living
Beauty Care Business From cosmetics lines such as Sofina and
2016 Segment Net Sales
Kanebo, each offering its own distinct
601.6 billion yen
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Kao Overview 2017
Human Health Care Business
Fabric and Home Care Business The Human Health Care Business offers
2016 Segment Net Sales
a broad selection of products such as
brand impact, to skin care and hair care
Healthya, a functional health beverage
products, the Beauty Care Business
developed through many years of research.
responds to beauty aspirations the world
273.1 billion yen
Designed to contribute to a comfortable
The Fabric and Home Care Business
2016 Segment Net Sales
provides products that boost cleanliness and comfort in everyday
345.2 billion yen
life. Fabric care brands include Attack laundry detergent and Humming fabric
over with technologically advanced
and healthy life, products range from,
softener, while home care products
products.
Laurier sanitary napkins and Merries baby
include Cucute dishwashing detergent
diapers to oral care items such as Pure Oral.
and Magiclean household cleaner.
Kao Overview 2017
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Chemical Business
Innovative technology that contributes to industrial development New silica dispersion improver essential for fuel-efficient tires
Mighty,for high-strength, high-durability concrete
Toner and toner binder that boost environmental performance through lowtemperature fusing
Kao’s new silica dispersion improver contributes to CO2
Mighty is a high-performance water-reducing additive that makes possible high-quality concrete featuring superior usability. This
reduction by balancing both the fuel-efficient and wet-grip performance of tires to the highest possible standards, using Kao’s interface control technology. BRIDGESTONE REGNO GR-Leggera
Kao was the world’s first manufacturer to succeed in developing toner binder with polyester resin. This made possible a significant reduction in the temperature at which toner fuses to paper, thus reducing environmental impact.
product responds to requirements in the civil engineering and construction industries for high-strength, high-durability concrete.
Plastics and Rubbers
Agrochemicals
Pharmaceuticals
Information Materials
Detergents, Perfumes, Cosmetics
Lubricants
Civil Engineering and Construction
Precision Industries and Electronics
Polyurethane
Paper and Pulp
Colorants
Metal Casting
Fragrance
Food Products
Chemical Business The Chemical Business offers an array of products
2016 Segment Net Sales
including oleo chemicals and derivatives, surfactants, high-performance polymers, and fragrances. It
273.8 billion yen
continues to grow by developing and supplying industrial products to a wide range of businesses both globally and within the Kao Group. Paper and pulp, food, pharmaceuticals, civil engineering and construction, information materials, and electronics
*Includes internal sales between businesses.
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Kao Overview 2017
are among the many industries our products support.
Kao Overview 2017
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The Environment
Sustainability
Reducing environmental impact across the entire product lifecycle
To a brighter future, for you and the world
Kao works with diverse stakeholders to reduce environmental impact throughout the product lifecycle, from procurement of raw materials to production, distribution, use, and disposal.
Health and Aging
In 2013, Kao Group formulated the Kao Sustainability Statement, clarifying our commitment to contribute to the
Working side by side with local communities, Kao promotes education in beneficial lifestyle habits
resolution of global issues through our business activities. A number of key challenges were identified, including the environment, health, aging, and hygiene. The Kao Group as a whole continues to focus on these themes. Kao Sustainability Statement
Global Commitment
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Hygiene
The United Nations Global Compact
RSPO
Participation in the United Nations Global
The Roundtable on Sustainable Palm
Compact represents a commitment by
Oil (RSPO) is an international non-profit
corporations around the world to support
organization working to address issues
and act in accordance with ten key
Network Japan WE SUPPORT
Lessons for the young 4-0024-07-100-00
associated with palm oil production,
principles relating to human rights, labor,
including ecosystem destruction in tropical
the environment, and the prevention of
forests, and harsh labor conditions on palm
corruption. Kao has been engaged in the
oil plantations. Kao has been a member of the
Global Compact since 2005.
Roundtable since 2007.
Kao Overview 2017
Using health-related research findings, along with visceral fat measuring devices and other tools, Kao supports the promotion of health and fitness.
In 2009, Kao began visiting schools with the goal of helping children develop their “skills for living.” For children, guidance on correct hand-washing techniques is not just instructive but also enjoyable.
Kao Overview 2017
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Kao Group by the Numbers
History
130
ss ine s Bu al c i ss ine em us
3% 16.
1887
8 3.
years
2017
33,195
¥2
7
C
Ch
Net Sales by Segment
lB ica n m lio he bil
Consolidated Number of Employees
23.7
re Business e Ca m o % dH n on a billi
Consolidated Operating Income ¥185.6 billion
ric .2 45 ab 3 ¥
Fiscal year ended December 31, 2016
F
Hu
¥ 27 m an
3 . 1 b illi o n 1 8 . 7 H e alt h C a r e B u s
%
ine
41.3
billion
Co ns um er P rodu cts Business
6 bil 01.
¥1,457.6
es re Busin s y Ca aut Be % lion
¥6
Consolidated Net Sales
ss
March
Kao selected for inclusion in the World’s Most Ethical Companies for the 10th consecutive year.
external customers. Net sales for the Chemical Business includes internal sales between segments.
September
Beauty Research & Innovation Center established at the Odawara Complex.
September
Kao selected for the Dow Jones Sustainability World Index (DSJI World).
November
Kao Customer Marketing Co., Ltd. wins the Environment Minister’s Prize for Corporate Activities to Prevent Global Warming.
For the fifth year running, Kao joins March
June
August
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Kao Overview 2017
the State Environmental Protection Administration (SEPA) of China in promoting Nationwide Cleanliness and Water-saving Initiatives. Kao agrees to acquire a U.S. manufacturer of inkjet inks and a European ink company. Kao included in the FTSE4Good Global Index, one of the world’s leading SRI indices, for the ninth consecutive year.
R&D Expenses
Number of Patents Held
16,618 PATENTED
54.6 billion yen
Since the fiscal year ending December, 2016, Kao has subscribed to International Financial Reporting Standards (IFRS). The composition of net sales shown on the graph is calculated based on net sales to
2016 Highlights
(As of December 31, 2016)
December
Kao selected as a CDP 2016 Water A List company.
December
Kao announces K20, the Kao Group Mid-term Plan 2020.
Products Sold
Shareholder Dividends
in about
100 countries and regions
27
No.1 among Japan’s public companies
consecutive fiscal years of increase
Kao Overview 2017
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Kao Products that Changed Everyday Life
Kao’s Yoki-Monozukuri began in 1890, with the introduction of Kao Sekken, a quality facial soap made in Japan. In the 130 years since then, Kao has continued to generate dozens of innovative products that have transformed everyday life.
Kao Sekken
1890
By popularizing the word “shampoo,” Kao changed hair-washing habits in Japan.
Kao predecessor Nagase Shoten founded
1900s
Kao Kona Sentaku (Wonderful)
1951 Significantly reduced the time needed for doing laundry by hand, and the burden of housekeeping chores.
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Kao Overview 2017
1960s
1964 Kao Industrial (Thailand) Co., Ltd. established as Kao’s first company outside Japan.
Laurier
1978 Changed life for women by offering constant peace of mind and comfort.
Attack
1984
1932
With quality to rival imported soaps of the time, Kao Sekken, won fans nationwide.
1887
Merries
Kao Shampoo
(Kao Soap)
1980s
1987
Baby diapers that offered absorbency, leak prevention and a sensation of dryness not found in cloth diapers.
1985 Kao Soap Co., Ltd. renamed Kao Corporation.
Quickle Wiper
2000s
1994
Providing surprising whiteness with just one scoop of detergent. The compact size made shopping more convenient.
2004 Launch of the Kao Way, a statement of the Kao Group's corporate philosophy.
A new floor cleaner for modern lifestyles. Quiet, easy cleaning for all, whenever it was needed.
2006
2009
Kao Group acquires Kanebo Cosmetics, Inc.
Kao announces Kao Environmental Statement and unveils new corporate identity.
Sofina
Healthya Green Tea
Attack Neo
Raku-raku Eco Pack Refill
1982
2003
2009
2016
A flagship product among the governmentcertificated FOSHU (Foods for Specified Health Uses), Healthya was readily incorporated into everyday life.
Providing thorough cleaning with savings in time and water usage, Attack Neo offered an environmentally friendly way to do laundry.
Combining universal design and care for the environment, this heralded a new age in refills.
Born of a desire to provide more women with dermatologically tested, highquality cosmetics.
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14-10, Nihonbashi Kayabacho 1-chome, Chuo-ku, Tokyo 103-8210, Japan Corporate Communications
Published May 2017
*References to “Kao” in this report refer to the Kao Group. Any other Kao company is referred to specifically in full.
