TOKYO, October 6, 2015 – Ajinomoto Co., Inc. (“Ajinomoto Co.”) will transfer its gift product business to Ajinomoto General Foods, Inc. (“AGF”) to integrate the gift product businesses of both companies in order to enhance the gift product business of the Ajinomoto Group. The integration is scheduled for April 1, 2016. Through this measure, Ajinomoto Co. will make full use of both companies’ assets with the aim of creating “food product, beverage and health” gift products with specialty.
In aiming to become a “genuine global specialty company,” Ajinomoto Co. is reinforcing its business structure and working to expand into adjacent business domains (products adjacent to existing product domains and adjacent markets) for rapid growth. As part of this effort, Ajinomoto Co. made AGF a consolidated subsidiary in April 2015. Since then, Ajinomoto Co. and AGF have been promoting cooperation in each division and studying synergies in the areas of business structure reinforcement, new product development and production. The gift product market in Japan is approximately JPY 7 trillion, and although the market for traditional mid-year and year-end gifts continues to contract, the personal gift market,* which accounts for around 60% of the gift product market as a whole, is growing at an annual rate of approximately 2% and is expected to continue to expand (fiscal 2014, Ajinomoto Co. estimate). Ajinomoto Co. will integrate its own gift product business with AGF’s to secure a presence in this growing personal gift market. The integration will be the first in a series of concrete measures to generate synergy with AGF by making it a consolidated subsidiary.
* The market for gift products other than mid-year, year-end and corporate gifts.
Specifically, Ajinomoto Co. will work for business structure reinforcement by improving profitability through product portfolio review and the promotion of higher efficiency in business operations, the sales structure and other areas, as well as by restructuring production and distribution bases. In addition, Ajinomoto Co. will generate synergy from the integration by using its original technologies to develop gift products in new domains with the value of “health” in addition to existing products (food products and beverages).
This matter will have no impact on consolidated business results for fiscal 2015.
Ajinomoto Co. will also promote cooperation with AGF in areas other than the gift product business, reinforce its business structure and generate synergy in new product development and production by leveraging both companies’ common core of powdered and processed products.
Overview of Ajinomoto General Foods, Inc.
About Ajinomoto Co.
Ajinomoto Co. is a global manufacturer of high-quality seasonings, processed foods, beverages, amino acids, pharmaceuticals and specialty chemicals. For many decades Ajinomoto Co. has contributed to food culture and human health through wide-ranging application of amino acid technologies. Today, the company is becoming increasingly involved with solutions for improved food resources, human health and global sustainability. Founded in 1909 and now operating in 26 countries and regions, Ajinomoto Co. had net sales of JPY 1,006.6 billion (USD 9.17 billion) in fiscal 2014. For more about Ajinomoto Co. (TYO: 2802), visit www.ajinomoto.com.
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