Consumer Products in Asia and Oceania
Attack Color, which helps
keep colored fabrics
bright, has contributed to
an increase in market
share for the Attack brand.
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Kao Corporation
CONSUMER PRODUCTS
Focal Points
➥ Further build brand equity and enhance market penetration.
➥ Improve profitability by maximizing the benefits of regionally based management and emphasizing
efficiency.
➥ Share know-how and best practices on business reforms among the affiliates to speed up innovations.
Operating Environment and
Performance
Price competition increased sharply due to
heightened competition among global peer
companies and the market entry of global
retailers. The slowdown in the U.S.
economy also impacted the region.
Despite the challenging environment in
Asia and Oceania, Kao generated modest
sales growth before negative currency
translation, while the strong yen resulted in
a slight decline in sales in yen terms.
Operating income increased as a result of
business reforms.
Fiscal 2000 Initiatives and Results
In fiscal 2000, Kao reorganized its
management structure into three regions:
China including Hong Kong; Taiwan; and
ASEAN.
In China, inventory adjustment at distributors initiated in fiscal 1999 was
completed. Improvements to Sifoné
shampoo, Attack compact laundry
detergent and Laurier sanitary napkins
contributed to recovery from sluggish fiscal
1999 sales, and the launch of Kao White
soap generated promising sales. Efforts to
strengthen sales in South China
(Guangzhou Province) expanded Kao’s
market share for shampoo, laundry
detergent and sanitary napkins. Moreover,
building an image for Lavenus that stresses
its Tokyo origins contributed to its good
performance in Hong Kong.
Sales in Taiwan were down primarily due
to the poor performance of disposable
baby diapers in the severe market environment, partially offset by good performance
in facial cleansers, body cleansers and
sanitary napkins. Initiatives to revitalize
diapers are under way.
In ASEAN countries, sales in Indonesia,
which are accounted for using the equity
method, continued to climb. Sales in
Thailand were flat in yen terms but
increased on a local currency basis, and
the success of profit management reforms
such as the consolidation of SKUs, review
of sales activities, and reduction of distribution costs contributed to an increase in
operating income.
Sales of Attack Color in Thailand have
remained strong since its 1999 launch, and
introductions in Malaysia, Singapore and
Indonesia have built on existing product
sales. Despite intense competition, the
Laurier sanitary napkin line held its marketleading position in Indonesia, Thailand and
Malaysia.
Kao Consumer Products (Southeast Asia)
Co., Ltd. was established in Thailand to
promote unified management in the ASEAN
region, strengthen marketing and product
development, and optimize in-market
production. Initiatives included preparations
for standardization of specifications for
certain products in fiscal 2001.
Solid Performers
Popular for its absorbency and soft
texture, Laurier remains the numberone sanitary napkin brand in Indonesia,
Thailand and Malaysia.
The logo of Bioré brand products has
been standardized to promote a unified
brand image.
Fiscal 2001 Issues and Objectives
Goals include building a foundation for sales
growth. Kao will clearly define priorities in
sales areas and brands in the Chinese
market, and future development will focus on
the four categories of detergents, shampoos/
conditioners, skin care and sanitary napkins.
Business reform in Thailand during fiscal
1999 helped improve the cost structure in
fiscal 2000, and the resulting know-how and
practices will be ported to other countries
during fiscal 2001. Throughout ASEAN, Kao
will counter pressure from global retailers by
strengthening category management and
key account management.
Annual Report 2001
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