| April 2000 |
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| Acquisition of U.S. Frozen Foods Company |
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| Ajinomoto Co., Inc. and Ajinomoto U.S.A., Inc. on March 31 signed a stock purchase agreement with Showa Sangyo Co., Ltd. to purchase GranPac Foods, Inc., a wholly owned U.S. frozen food subsidiary of Showa Sangyo, for $7.5 million. |
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| Ajinomoto has two main objectives in acquiring a frozen food subsidiary in the United States. The first is expanding its frozen foods business in the U.S. market, where Ajinomoto already has a significant presence. Currently, Ajinomoto sells frozen foods such as frozen processed rice products, gyoza and shumai (Chinese dumplings) produced on consignment in the U.S. and imported from manufacturing affiliates in Japan. |
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| With this acquisition, Ajinomoto will have a production base in the United States, and local R&D functions will also be bolstered, enabling the company to provide high-quality products based on the technology it has cultivated over many years. While increasing customer satisfaction, Ajinomoto will aim for market expansion by aggressively developing its presence in the U.S. market, for which local sales staff of Ajinomoto U.S.A. will play a key role. In particular, the market for frozen processed rice products in the United States has experienced continuous double-digit growth, and is a high-potential market with a current size of $300 million a year. |
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The second objective is acquiring a U.S. production base that can procure agricultural products at low cost. This capability will enable Ajinomoto to develop and import products with great advantages in the Japanese frozen foods market, which will then help to strengthen the frozen foods business in Japan. At present, Ajinomoto has frozen food manufacturing plants in Thailand and China, and both plants develop products utilizing their geographical advantages and export them to Japan. Going forward, Ajinomoto will aggressively develop products suitable for production in the United States and work to build this business.
The sales target for fiscal 2000 is $20 million. |
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| Profile of the New Company (all items are planned) |
| 1. Name: |
Undecided |
| 2. Capital: |
US$7.5 million (20% by Ajinomoto Co., Inc., 80% by Ajinomoto U.S.A., Inc.) |
| 3. Company startup date: |
June 30, 2000 |
| 4. President: |
Undecided |
| 5. Head office: |
Portland, Oregon, U.S.A. |
| 6. Business description: |
Manufacturing of frozen foods |
| 7. Annual sales: |
US$20 million (fiscal 2000 estimate)
(consolidated with frozen food sales of Ajinomoto U.S.A., Inc.) |
| 8. Number of employees: |
Approx. 90 |
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