French beauty giant L’Oréal is set to increase production in Japan to ramp up its sales in Asia, where customers tend to associate a "Made in Japan" tag with a high quality product. The company currently manufactures ten brands, including Shu Uemura and Lancôme, at its Japanese Gotemba production plant, a key production hub for Asia.
L’Oréal will acquire 10,000sqm of land to build a new facility near Gotemba, and aims to begin production in 2016. A ¥2bn investment will bring production capacity at Gotemba to about 100m units a year, and the company is planning further investment to increase that capacity by 50%.
Half of Gotemba's output will be for export, as the company sees a greater role for Japan as an export base for other countries in Asia. L’Oréal's sales of luxury cosmetics rose by 8.3% last year, with Japan and the rest of Asia accounting for roughly 40% of the total. Sales of L’Oréal products in the region have grown by 13%.
Other companies are also noting that items made in Japan are gaining popularity as consumers in the fast-growing southeast Asian economies seek higher quality and functionality: Unilever plans to boost its production of upscale hair care products at a plant in Sagamihara, near Tokyo, and P&G intends to add capacity at a plant in Yasu, in Japan's Shiga prefecture.
