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
1
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
Pr
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Kao Overview 2017
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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
ter
a cti
ve C o m m u n
ti
ica
on
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
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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
13
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
15
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
16
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
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
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
ss
(As of December 31, 2016)
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
external customers. Net sales for the Chemical
Kao selected for inclusion in the
World’s Most Ethical Companies
for the 10th consecutive year.
March
For the fifth year running, Kao joins
the State Environmental Protection
Administration (SEPA) of China in
promoting Nationwide Cleanliness and
Water-saving Initiatives.
June
August
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.
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.
December
December
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Kao Overview 2017
Shareholder Dividends
Business includes internal sales between segments.
2016 Highlights
March
Products Sold
Kao selected as a CDP 2016
Water A List company.
Kao announces K20, the Kao
Group Mid-term Plan 2020.
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.
Kao Overview 2017
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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.