Kao plans new factory in Indonesia

Bloomberg

Kao Corp. will add a factory in Indonesia to expand capacity and meet rising demand.

The company will initially invest more than ¥4 billion in the plant, which will make soap, toiletries and industrial chemicals, Kao said Tuesday in a statement.

Operations are set to begin next January at the factory, which will replace an existing plant by December 2014, the Tokyo-based company said.

Kao, owner of Biore facial wash, Magiclean household cleaners and Molton Brown cosmetics, has increased the share of revenue generated in markets outside Japan as domestic demand declines with an aging and shrinking population. The toiletries maker also built a plant for consumer products in China’s Anhui Province that is scheduled to start operations this year.

“Our current factory in Indonesia is unable to meet increasing demand worldwide, so we have to expand it,” said company spokesman Ryota Ogawa.

The factory to be built on a 120,000-sq.-meter site in the suburbs of Jakarta will have about 50 percent more capacity than the existing facility, Kao said. Construction is set to begin this month.

Demand for Kao’s industrial products “has been increasing both for domestic use in Indonesia and for export, in line with the growth of the Asian economy,” the company said in a statement.

Kao generated 73 percent of its revenue from Japan in the 12 months that ended March 31, falling from about 75 percent a year earlier.