Kao releases its mid-term K20 plan

By Natasha Spencer

- Last updated on GMT

Kao releases its mid-term K20 plan

Related tags Cosmetics Social responsibility

On 18th May 2017, cosmetics and chemical name, Kao, revealed its 2017 Integrated Report detailing how it plans to expand globally over the next four years.

What can we expect?

Kao released its Integrated Report 2017, with the slogan "Transforming Ourselves to Drive Change”​.

As part of its Kao Group Mid-term Plan 2020 (K20), the Japanese leading cosmetics brand aims to boost its corporate value internationally through its four-year plan.

Over this period, the mid-term vision sets out Kao’s strategy to develop its global growth through building sustainable and profitable growth and combining these efforts with corporate social responsibility initiatives to support drives to overcome social issues.

Kao will base its growth on developed R&D initiatives and innovative technologies that focus on raw materials and product and service releases that form positive change. 

To achieve its global presence, Kao will build its 2020 initiative on four key strands that will revolve around contributing to the field of health, the field of hygiene, the global environment and the ageing population and society, which is particularly prevalent in Japan.

People, places and products

Michitaka Sawada, President and CEO of Kao, expresses how as part of the strategy, the cosmetics industry faces ongoing challenges, despite “gradually improving”​ profitability in the beauty care business.

“In the face of fierce competition as companies from other industries and global firms enter the market, branding and differentiation have become vital,”​ stated Sawada.

After Kao first initiated the implementation of its reforms in 2015, it now moves into a core strategic period where through its cosmetics business, Kao is “making efforts to return to [its] corporate origins [and] reforming [its] cosmetics business, by emphasising the differentiated features of Sofina and Kanebo”​,  Sawada added.

Sofina and Kanebo are two of Kao’s leading home brands that feature skin and body care items.

Global possibilities

The Japanese organisation continues to position and strengthen these brands to help it overcome its overseas expansion difficulties. Although China and Indonesia remain key markets for growth for Kao, it continues to develop its consumer products business in Asia, in addition to external markets in the US and Europe.

In its mid-term 2020 plans, Kao has pledged its commitment to foster a distinctive corporate image, attain profitable growth and create stakeholder returns.

By 2030, Kao aims to become a high-profit global consumer good company that goes beyond 2.5 tn yen (€20 bn) in net sales, including 1.0 tn yen (€8 bn) outside of Japan, 17% operating margin and 20% return on equity (ROE).

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