Kao and Kanebo aim to fully integrate logistics by 2010

By Simon Pitman

- Last updated on GMT

Related tags Carbon dioxide

Having acquired Kanebo Cosmetics in 2005, the logistics operations
for the two businesses are now in the throes of a massive
integration operation as part of aims to fully synthesize the

As part of this plan the two main logistics operations in Kansai and Hokkaido have now undergone the systematic integration of the logistics oeprations, which was completed in November 2007.

Meanwhile the Ishikari Logistics Centre started operations in March 2008, with the aim of being an integrated consumer and cosmetics products distribution centre for both Kao and Kanebo product lines.

Third logistics centre planned Kao CEO Motoi Ozaki and Kanebo Cosmetics COO Kenji Chishiki said that on top of the integration of the existing logistics centres, they also plan to build a third centre in the Tohoku, which will commence in October.

According to the plans, a network of integrated logistics solutions will be established throughout Japan by 2010 to serve the companies' mutual customer base.

By this time the two companies say they are aiming to achieve collective cost savings of approximately ¥5bn (€31.5m) created by the synergies from the collective logistics operations.

Greater efficiency The aim of the integration project is to "more efficientily utlise the companies' logistics infrastructure, including logistics bases, systems, and relevant subsidiaries".

In turn this will lead to reduced rentals, for storage and cargo handling fees, as well as reducing delivery fees for the the more efficient use of exisisting delivery routes already established for Kao consumer products.

Further integration is expected through standardisation of process, including picking and delivering, which the companies say will help to create further synergies and cost savings.

Positive environmental impact Likewise, the companies say that the impact on the environment will also be positive, due mainly to the fact that the company will be reducing its carbon footprint thanks to a more efficient business with reduced CO2 emissions.

Kao bought a majority stake in Kanebo Cosmetics at the end of 2005, making it a top ten ranking personal care company globally.

However, when it bought Kanebo Cosmetics it also acquired significant debts as a result of mismanagement by its previous owners.

Kanebo is still planning to increase its sales turnover significantly by 2010, eyeing revenue growth of approximately 25 per cent to reach ¥270bn.

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