Nov. 11 (Bloomberg) -- Shiseido Co., Japan’s biggest cosmetics maker, aims to accelerate China sales as it expands distribution and introduces a new brand for sale in drugstores.

Sales may grow about 20 percent in the 12 months ending March 2011, from about 15 percent expected this fiscal year, Chief Financial Officer Yasuhiko Harada said in an interview yesterday in Tokyo, without providing an amount. China accounted for about 10 percent of the Tokyo-based company’s 690 billion yen ($7.7 billion) in revenue last year.

The cosmetics maker aims to boost overseas sales to 50 percent by 2017 as demand in Japan drops amid falling wages and an aging population. Shiseido plans to increase the number of Chinese cosmetics stores that stock its products to 5,000 next year from 4,300 in September, as it competes with L’Oreal SA and other international brands.

“Shiseido is expanding in the right place as there is huge potential in China,” said Yasuhiro Matsumoto, a senior analyst at Shinsei Securities Co. in Tokyo. “Shiseido has a strong brand” to lure customers.

China’s industrial production and retail sales both increased by 16 percent in October, bolstering forecasts for economic growth to exceed 10 percent this quarter for the first time in more than a year, the statistics bureau said at a briefing today.

Aupres, Urara

Shiseido sells Aupres cosmetics at department stores and Urara at cosmetics stores in China.

Shiseido rose 0.1 percent to close at 1,652 yen on the Tokyo Stock Exchange. The stock has fallen 9.5 percent this year, compared with an 11.4 percent gain for the benchmark Nikkei 225 Stock Average.

The company plans to sell as much as 50 billion yen in five-year bonds for refinancing, expansion and acquisitions.

“It’s a good environment to sell bonds,” Harada said. The company last sold bonds in February 2007, according to data compiled by Bloomberg.

Shiseido last month raised its net income forecast for the year ending March 31 by 3.3 percent to 31 billion yen as it expects lower one-time charges and taxes. Sales are expected to fall 5.8 percent to 650 billion yen.

The domestic cosmetics market is “mature” and may shrink as much as 2 percent in the six months ending March 31, he said. Shiseido’s Japan sales may be unchanged in the half, he said.

To contact the reporter on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net; Junko Hayashi in Tokyo at juhayashi@bloomberg.net

Last Updated: November 11, 2009 01:44 EST