Shiseido reorganises production and R&D bases in Japan

Cosmetics manufacturing group Shiseido has announced the reorganisation of its production and R&D bases as part of restructuring to meet changed economic conditions.

According to Japanese firm, the moves were taken on the basis of the global economic slowdown and the European financial crisis, besides the changes in China’s business environment, which are making new investments to unlikely to produce favorable returns.

The company said it has changed its policy to create profitable structure, with which it can steadily increase profits by achieving sales growth at the same rate as its market growth.

Shiseido said it will carry out the reorganisation of its production bases at a global level, placing a top priority on competitiveness.

Under the new plans, the firm is closing its 50 year old Kamakura plant in Japan in early 2015 leaving the Kuki, Kakegawa and Osaka units in position.

Production from the Kamakura unit will end in December 2014 and will be moved to the Kakegawa, Osaka and Vietnam plants.

The Vietnam plant will further take over production of medium and low priced skin care and other products and will become the core plant in this sector focused on the ASEAN and Japanese markets.

The firm is planing to shut down its R&D facility in Shin-Yokohama, and it will consolidate the structure with Kanazawahakkei.

Shiseido said the centre at Shin-Yokohama will carry an integrated research programme on nutraceuticals, dermatology and pharmaceuticals.

Shiseido claims that the reorganisation is expected to generate an extraordinary loss of about JPY6bn ($646m).