Pilipinas Kao to Fortify Fatty Alcohol Production Capacity

Kao Corporation (President and CEO: Michitaka Sawada) will enhance production capacity for fatty alcohols*1 at Pilipinas Kao Incorporated (PKI) to approximately 1.4 times of current capacity to meet growing demand for fatty alcohols centering on the Asian region. This production increase will reinforce Kao's supply system of oleochemicals for its downstream chemical business. Construction for increasing production capacity will be completed in August 2013, and the related investment is estimated at approximately 3 billion yen.

In February 2012, Kao announced new plant construction at P.T. Kao Indonesia Chemicals, and, in June 2012, establishment of a new production company, Kao (Shanghai) Chemical Industries Co., Ltd., in the Jinshan district of Shanghai. In addition, with this planned increase of production capacity for fatty alcohols at PKI, Kao is proactively promoting its investment in production facilities for its chemical business.

Demand for fatty alcohols is growing in the Asian region because of a wide range of applications such as use in shampoo and detergent for consumer use, as key materials for surfactants formulated in cleaners for industrial use, and as materials for plastic-processing agents. The enhancement of production capacity at PKI is implemented to meet such rising demand for fatty alcohols.

Kao is proud of having one of the world's largest production capacities for fatty alcohols. By leveraging its proprietary catalysts that have lower environmental impact and alcohol production technology with its related process development, Kao is pursuing efficient and high-quality production of fatty alcohols that ensures establishment of further stable supply systems to meet growing demand.

With permission and authorization of the Philippine Economic Zone Authority*2, PKI is contributing to economic development in the Philippines by producing fatty alcohols there and exporting 90 percent of its production. During the over 30 years since PKI's establishment in 1977, the company has created employment opportunities, and has endeavored to enrich the lives of people in regional communities. As one example, since 2008, PKI has provided dental and medical checkups at no charge to neighborhood residents where PKI has operations. In addition, as part of its environmental conservation activities, PKI initiated a "mangrove rehabilitation" project in the coastal area near the plant, and is collaborating with the Philippines' Department of Environment and Natural Resources in the mangrove plantation program.

Fully aware of the influence of its production activities on local society including employment and environmental conservation, as part of its social responsibilities, PKI continues to strive for harmonious development together with regional communities.

*1 Fatty alcohols
It is a collective term for alcohols with a carbon number 6 or more. Fatty alcohols are widely used as materials for shampoo and detergent, and in various surfactants and polymer additives for industrial use.

*2 The Philippine Economic Zone Authority (PEZA)
PEZA provides preferential treatments including tax incentives, generally under the condition that more than 70 percent of manufactured products are exported.

Outline of PKI

Corporate name: Pilipinas Kao Incorporated (PKI)
Established: 1977
Representative: Tadashi Okubo
Investment ratio: Kao Corporation, 100%
Business: Production and sales of industrial products (fatty alcohols that are key materials for surfactants) derived from coconut oils

About Kao

Kao creates high-value-added products to help consumers around the world enrich their everyday lives. Over 20 leading brands such as Asience, Attack, Bioré, Goldwell, Jergens, John Frieda, Kanebo, Laurier, Merries and Molton Brown are part of the lives of people in Asia, Oceania, North America and Europe and help generate about 1,200 billion yen (about $US13 billion) in annual sales. Kao employs about 35,000 people worldwide and has more than 120 years of history in innovation. Please visit the Kao group web site for updated information.