Ajinomoto Co. and Toyo Suisan Agree to Establish a Joint Venture
Company in the Instant Noodle Business in Nigeria and India
Rapid Expansion into Emerging Markets with Notable Growth
TOKYO, December 18, 2013 - Ajinomoto Co., Inc. (Ajinomoto Co.) and Toyo Suisan Kaisha, Ltd. (Toyo Suisan) exchanged a memorandum of understanding today to establish a joint venture company in the instant noodle business in Nigeria and India. By combining the sales infrastructure and marketing capability of Ajinomoto Co. with the strengths of Toyo Suisan in instant noodle development and production technology, the companies will achieve speedy business expansion into emerging markets with notable growth as equal partners.

The global market for instant noodles exceeded 100 billion servings in fiscal 2012, with solid growth at an average rate of 3%/year. In particular, backed by rising middle-class purchasing power and increasing population1, emerging markets have expanded substantially in countries such as India (4.4-billion-serving market; average growth rate 22%/year) and Nigeria (1.9-billion-serving market; average growth rate 7%/year), and are expected to continue growing in the future. (Source: World Instant Noodles Association)

1.United Nations population estimates:
(2012) India: approximately 1.24 billion (2nd in the world); Nigeria: approximately 170 million (7th in the world)
(2050) India: approximately 1.62 billion (1st in the world); Nigeria: approximately 440 million (3rd in the world)

With bases in 26 countries and regions worldwide and sales of food products, amino acids and other products in more than 130 countries and regions, Ajinomoto Co. aims to be a global food products business with the world’s number-one seasoning business at its core. The company has been building its operating infrastructure by developing its seasonings business, entering Nigeria in 1991 and India in 2003. To accelerate top-line (business scale) expansion in both countries, which have high business potential, Ajinomoto Co. has been studying strengthening the competitiveness of its instant noodle business and nurturing it as a growth driver.

Toyo Suisan entered the instant noodle business in 1961 and is a general manufacturer of food products centered on noodles, holding the world’s top share of fresh noodles and conducting a frozen noodle business. In its domestic instant noodle business, sales are steadily expanding with the hit product Maruchan Seimen. Its overseas instant noodle business started in the United States in 1972 and has steadily continued to expand. With a current share of about 60% of the U.S. market and a predominant share of more than 80% of the market in Mexico, its primary export destination, Toyo Suisan is now ready to establish a presence in a new market. The company has been considering a rapid entry into growth markets for further expansion of its overseas business in the future.

This launch in Nigeria and India will enable Ajinomoto Co. to enhance the competitiveness of its instant noodle business with the strengths of Toyo Suisan in instant noodle development and production technology, as well as the knowledge it has accumulated over many years in competitive markets. At the same time, Toyo Suisan will be able to rapidly enter growth markets using the sales infrastructure (bases: West African Seasoning Co., Ltd. in Nigeria and Ajinomoto India Pvt. Ltd. in India) and marketing capability of Ajinomoto Co.

By coordinating their respective strengths as equal partners, the companies will achieve speedy business expansion into emerging markets with notable growth.

Outline of Memorandum of Understanding
The two companies have formed a basic agreement to establish joint venture companies as follows.

1. Nigeria
(1) Equity ownership:Ajinomoto Group 51%, Toyo Suisan Group 49%
(2) Representative:Director to be designated by Ajinomoto Co.
(3) Head office location:Abuja, Federal Capital Territory, Federal Republic of Nigeria
(4) Business category:Instant noodles
(5) Role of companies:Ajinomoto Group: Support for marketing (product planning/sales)
Toyo Suisan Group: Support for development/production
(6) Brand:New brand shared by both companies (under consideration)

2. India
(1) Equity ownership:Toyo Suisan Group 51%, Ajinomoto Group 49%
(2) Representative:Director to be designated by Toyo Suisan
(3) Head office location:Chennai, Tamil Nadu, Republic of India
(4) Business category:Instant noodles
(5) Role of companies:Ajinomoto Group: Support for marketing (product planning/sales)
Toyo Suisan Group: Support for development/production
(6) Brand:New brand shared by both companies (under consideration)


Reference
1. Nigeria (population approximately 170 million)
(1) Investment:Approximately JPY 1 billion
(2) Sales target:Approximately 500 million servings (market share of about 15%) 10 years after the
start of sales
(3) Start of sales:Fiscal 2015 (scheduled)

2. India (population approximately 1.24 billion)
(1) Investment:Approximately JPY 1 billion
(2) Sales target:Approximately 500 million servings (market share of about 15% in the four states of
South India2) 10 years after the start of sales
2. Tamil Nadu, Karnataka, Kerala and Andhra Pradesh (total population of 4 states
approximately 250 million FY2011)
(3) Start of sales:Fiscal 2016 (scheduled)


Overview of the Two Companies

Ajinomoto Co., Inc.
(1) Representative:Masatoshi Ito, Representative Director, President & Chief Executive Officer
(2) Location:15-1, Kyobashi 1-chome, Chuo-ku, Tokyo, Japan
(3) Established:1925 (founded in 1909)
(4) Net sales:JPY 1,172.4 billion (consolidated, year ended March 31, 2013)
(5) Number of employees:27,518 (consolidated, as of March 31, 2013)
(6) Business description:Manufacture and sale of seasonings, processed foods, amino acids,
pharmaceuticals, specialty chemicals, etc.

Toyo Suisan Kaisha, Ltd.
(1) Representative:Kazuo Obata, President and Representative Director
(2) Location:13-40, Konan 2-chome, Minato-ku, Tokyo, Japan
(3) Established:1953
(4) Net sales:JPY 344.5 billion (consolidated, year ended March 31, 2013)
(5) Number of employees:4,275 (consolidated, as of March 31, 2013)
(6) Business description:Manufacture and sale of instant noodles, fresh noodles, frozen noodles,
processed foods, etc., seafood business, cold-storage business


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 1,172.4 billion (USD 14.1 billion) in fiscal 2012. For more about Ajinomoto Co. (TYO: 2802), visit www.ajinomoto.com.

For further information, please contact here.
 
CLOSE