French beauty giant L’Oréal is set to increase production in Japan to ramp up its exports to Asia, where the "Made in Japan" tag signifies high quality. In line with this, LOrèal’s Gotemba plant will become a key production hub for Asia.
The company currently manufactures ten brands, including Shu Uemura and Lancôme, at Gotemba. It will acquire 10,000sqm of land to build a new facility, aiming to begin production in 2016.
The ¥2bn investment will bring capacity at Gotemba to about 100m units a year, and half of the output will be shipped abroad. The company is planning further investment later to add 50% more capacity.
LOrèals sales of luxury cosmetics rose 8.3% last year. Japan and the rest of Asia accounted for roughly 40% of the total, with growth of 13%. The company sees a greater role for Japan as an export base for Asia.
In the fast-growing southeast Asian economies, items made in Japan are gaining popularity as consumers seek higher quality and functionality. For similar reasons, Unilever plans to boost production of upscale hair care products at a plant in Sagamihara and P&G intends to add capacity at a plant in Yasu.