Nov 01, 2018 (Nikkei) - Japanese consumer goods companies are increasing investment in factories at home, with an eye to exporting to China and other Asian markets where "Made in Japan" products have cachet.
The trend marks a major shift in strategy for household goods producers, whose focus had always been Japanese customers. It also breaks with the textbook approach to overseas expansion, where establishing local production and securing distribution channels were usually the first steps.
Cosmetics maker Shiseido will spend 140 billion yen ($1.23 billion) by 2022 to expand domestic production capacity -- a 45 billion yen increase from previous plans for spending through 2020.
By 2021, the company intends to build an addition to its Kakegawa plant southwest of Tokyo that makes lipsticks and eye shadows, and will cancel the planned closure of an Osaka factory whose products include skin toner.
Shiseido is on course to log its highest-ever operating profit and sales in 2018, thanks in part to purchases by tourists visiting Japan.
The company plans to open new Japanese plants for the first time in over three decades -- one north of Tokyo in 2019 and the other in an Osaka suburb the following year. But production capacity is still expected to fall short of demand, so it is earmarking additional investments which will lift its global capacity by 80%.
Cosmetics rival Kose's skin care unit Albion plans a 10 billion yen upgrade to a Tokyo area plant by 2020. The brand is popular among Chinese tourists -- an estimated one-fifth of Albion's fiscal 2017 sales of 68 billion yen came from visitors to Japan.
The large-scale investments by Shiseido and Kose show how health and beauty items, a domestic-market-focused sector once thought to have little in common with export-driven industries like automobiles, are emerging as a new face of Made in Japan.
