Ajinomoto Acquires Stake in African Food Processor as Sales Fall

08 Nov 2016 --- Ajinomoto has purchased a stake in African food processor Promasidor Holdings for $532m as its looks to bolster its seasonings business amid a decline in sales.

The Japanese food giant has purchased a 33.3 percent stake in Promasidor, which has a presence in 26 countries in Africa.

Ajinomoto is teaming up its existing presence in Africa with Promasidor's sales and distribution network in the continent.

Promasidor, which mainly operates in Nigeria, Algeria, Ghana, the Congo and Angolo, makes and sells powdered milk, powdered beverages, flavor seasonings and cereals brands which are well-known in Africa.

Promasidor was set up in 1979 and has around 4,000 employees. It boasts sales of around $673m a year.

Ajinomoto has identified Africa as a key growth market, as it looks to tap into its rising population which is projected to grow from 1.2bn in 2015 to 1.7bn in 2030.

Ajinomoto has already a considerable presence in Africa. It set up West African Seasoning in Nigeria in 1991, which was followed by operations in Egypt and the Ivory Coast.

Separately, Ajinomoto has reported that its sales have fallen 11.4 percent to 522.5m Japanese Yen ($4.99bn) in the six months to April 30.

The fall in sales was attributed to a decline in sales of seasonings and processed foods and the impact of currency exchange. Operating income fell 15 percent to 42.4m Japanese Yen ($405m).

Domestic food sales decreased across coffee, seasonings and processed food but rose across frozen foods. International food sales also slipped.

Across its Healthcare Unit, sales were down to a decline in sales of amino acids for foods and pharmaceuticals while a substantial decline in animal nutrition sales dented sales of its Life Support Segment.

Due to the fall in sales and operating income, Ajinomoto has revised downwards its expectation of its full year financial results.

It now expects operating income to be 81.5 Japanese Yen (($779m) compared to the 91 Japanese Yen (($870m) it previously indicated.