Otawara

On wasteland once used for earthquake drills in the small town of Otawara north of Tokyo, Japanese giant Shiseido has built its first domestic factory in 36 years, hoping to capitalise on a boom for "Made in Japan" cosmetics.

The Japanese cosmetics industry faces huge competition not only from established players such as L'Oreal and Estee Lauder but increasingly also from the "K-beauty" craze coming from South Korea.

Nevertheless, Japan is more than holding its own, with exports nearly quadrupling since 2013 to 546 billion yen ($5 billion), according to finance ministry figures, nearly two-thirds of that going to China and Hong Kong.

The domestic industry is also benefitting from an explosion of inbound tourism in recent years ahead of the 2020 Tokyo Olympics -- in particular a relaxing of visa requirements for Chinese tourists who lap up the latest Japanese cosmetic fads.

Shiseido chief executive Masahiko Uotani told AFP that a focus on the high end of the market and time-honoured attention to detail set them apart from the foreign brands seeking to dominate globally.

"We are focusing on prestige, premium brands. Consumers in those categories see the value of Japanese culture," said Uotani.

"So strategically, we are telling consumers: those brands are from Japan, it's Japanese R&D. And that is becoming a very important competitive value."

In addition to the new plant in Otawara, Shiseido plans to open two more in Japan before 2022 -- a total investment of 120 billion yen -- the fastest pace of expansion in the firm's 150-year history.

The three new Shiseido factories in Japan will feature the latest in Japanese tech -- from advanced robotics to artificial intelligence -- but will also rely heavily on human intervention, especially for the highest-range products.

In Otawara for example, while machines fill the bottles, lines of employees in white, blue or pink overalls fix the tops -- there are too many different types of container to automate this process.

Despite the highest labour costs, Shiseido is not the only company to bring back production to its home base. In 2017, Kose Corporation sold its factory in China to boost its presence in Japan.

AFP