Kao Chemicals Group talks to Nikkei about its expansion and commitment to Catalonia

The text below reproduces part of an article from Nikkei, the world's largest financial newspaper based in Tokyo and renowned for its coverage of Japan's economy, industries, and markets. The article highlights the case of Kao Chemicals Europe, which came to Catalonia in 1970 and examines the reasons for continued investment over the years.

Nikkei interviewed President Daisuke Hamada of Kao Chemicals Europe, which oversees manufacturing, R&D, and sales for Spain, Germany, Mexico, and Brazil, about the charm of Catalonia, and here are his responses. 

“Barcelona’s quality of life is no match for other global cities. The ability to attract top-shelf talent from around the world, and not just locally, is a huge point of attraction”

President Daisuke Hamada of Kao Chemicals Europe

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Continuous Investment for More than Half a Century

What is the history of the Kao Group’s expansion into Catalonia in the field of chemicals?

It all started in 1970 with our investment in a Catalonian company called Sinorgan, after which we created SINORKAO. In 1977, we bought out Molins i Puigarnau and created Molins Kao. We combined these two companies and created Kao Corporation SAU (henceforth, “Kao Spain”) in 1987. In 1999, we set up the current holding company, Kao Chemicals Europe (KCE), which German Kao Chemicals is a part of. In 2005, we added QuimiKao in Mexico, we created Kao Brazil in 2012, and in 2017, we bought out the Catalonian company Chemigraph (now Kao Chemigraph). Today, we control a total of five companies - two in Catalonia and one each in Germany, Mexico, and Brazil.

Four Reasons to Keep Investing

Why has Kao continued to invest in Catalonia?

Broadly speaking, there are four reasons. First, there's the culture and history. Second is the strategic location. Third is the people, and fourth is the environment. 

When I say culture and history, I mean that the people here have a deeply-rooted understanding of professionalism and business. The culture and history allow them to really get to places like Japan, Germany, and Mexico. They might be Spanish, but Catalonians have a love of order and industriousness that’s closer to something you'd expect in Germany but without losing that unique Latin optimism and openness. 

As for location, we are on the Mediterranean coast near the French border, close to two major ports - Barcelona and Tarragona - and have incredibly easy access to the rest of the EU as well as North Africa, North and South America, and Asia. An added benefit for our company is the nearness of Tarragona's chemical industry cluster. The oil complex in Tarragona is the biggest in southern Europe, which means many raw materials are easily available, creating advantages in terms of shipping costs and eco-friendliness. 

The third reason is the people, and that’s because there are so many top-class universities and research institutes in Catalonia, starting with Universitat Politècnica de Catalunya, not to mention the academic clusters here. Not only do we thereby gain access to talent, but it’s also an ideal environment for collaborating with research institutes via those graduates. Barcelona’s quality of life is no match for other global cities. The ability to attract top-shelf talent from around the world, and not just locally, is a huge point of attraction.

The government's sustainability support measures also match our company's sustainability policy, so you could say that another appeal of Catalonia is how easy it is to be eco-friendly here. 

ENGIE Spain and Kao Spain have signed an agreement to build, test-run, and operate and maintain for 15 years a new thermal utilization plant run on biomass from certified waste lumber, guaranteeing sustainable forest management within Kao Spain's Olesa plant. Natural gas consumption in the plant will be cut by 95% thanks to this new facility, reducing our carbon footprint. 

The spirit of Catalonia's people

What do you think of the Catalonian character? 

The kind of hard work and attention to detail we take for granted in places like Japan and Germany are far from a global standard. For instance, Germans don’t take commitments lightly. When they say yes, they follow through, but the flip side of that is that they don’t often say yes. Catalonians, on the other hand, will say yes and then start moving forward, finding the most realistic way to get started. They have that Latin outgoing quality, but they're also hard workers. They've really found the right balance. Having that diversity in a company that works on a global scale with Japan, Germany, Mexico, and Brazil is a big advantage, and I think it was the right choice to choose Barcelona for our headquarters. 

Even during the pandemic, people didn’t let it get them down. As long as the weather is good, people can keep their spirits up. When they imposed the curfews, people would get out on their balconies at 8 pm and clap, wave to their neighbors, and sing songs, partly as a sign of thanks for healthcare workers, but they were also just finding ways to stay positive. That resilience in the face of adversity is a basic aspect of the Catalonian character. 

What advice do you have for Japanese companies thinking of making direct investments in foreign countries?

I think a lot of Japanese people have an image of Barcelona as a tourist destination, but there are a lot of different industrial and academic clusters here, so it's a promising place for direct investments. Do a little research on why so many famous companies have offices here, and you’ll see. Lately, I’ve been starting to get the feeling that there are more Chinese and Koreans in Barcelona than Japanese, and one thing Japan is lacking that those two countries have is direct flights. Direct flights would increase the flow of business visitors between Catalonia and Japan and lead to greater business activity, so I’d like to see that happen soon. There are too many great things to talk about when it comes to Barcelona aside from business, so I’ll just say that I hope people get to know its industry better and more Japanese companies start expanding to Catalonia. 
 

To read the full article in Japanese, please click on the link to access the original version published in Nikkei.