Ajinomoto and Accenture launch joint venture to “accelerate operational transformation”

11 Nov 2019 --- Japanese food and biotech company Ajinomoto Co. and Ireland-headquartered tech consultancy Accenture are set to establish a joint venture in a bid to “help drive Ajinomoto’s operational transformation.” The new company, Ajinomoto Digital Business Partners Co., will run the operations of Ajinomoto’s corporate divisions, which include human resources, office management and procurement. To achieve this, the joint venture is seeking to leverage digital solutions, including artificial intelligence, to boost Aginomoto’s efficiencies. Starting operations in April 2020, the new firm will be 67 percent owned by Ajinomoto and 33 percent by Accenture.

“For organizations to drive transformation by improving productivity and creating new value, they need to incorporate digital technologies into every process through cooperation with external partners,” says Atsushi Egawa, Country Managing Director of Accenture, Japan.

The new joint venture will leverage robotic process automation, analytics and artificial intelligence.The new company will leverage the power of robotic process automation, analytics and artificial intelligence – as well as other solutions for business process transformation – to deliver services that aim to “enhance the functionality and efficiency of Ajinomoto’s corporate functions.” As part of its work, Accenture leans on its expertise in digital transformation in the consumer goods and services industry, as well as its business process services.

“Ajinomoto Co. remains focused on priority product domains and improving employee productivity to realize sustainable growth and become a genuine global specialty company,” says Masaya Tochio, Representative Director, Member of the Board & Corporate Senior Vice President, Ajinomoto Co. “The joint venture with Accenture will foster the next generation of talent that focuses on higher value-added work to provide competitive services and help Ajinomoto Co. perform a pivot to the operating model that consistently delivers greater customer value.” 

Ajinomoto recognizes that transforming its corporate and other business functions would require using digital and other innovative technologies beyond its existing capabilities, concludes the company. 

FoodIngredientsFirst reached out to both companies for comment on how the joint venture is expected to impact future product development and corporate benchmarking.

Ajinomoto business highlights
In the interim period of fiscal 2019, Ajinomoto reports a 1.4 percent decrease of JPY 7.7 billion (US$64 million) in its consolidated sales, compared to the same period of the previous fiscal year, due to factors including a substantial decline in animal nutrition sales. Consolidated sales were recorded at JPY 538.7 billion (US$4.9 billion).

Meanwhile, business profits saw a 7.8 percent increase of JPY 3.4 billion (US$31.2 million), bringing in an estimated JPY 48.0 billion (US$ 440.4 million) attributed to substantial increases in profit from umami seasonings for processed food manufacturers, frozen foods (International) and frozen foods (Japan), among other factors. The profit increase is recorded in spite of impairment loss on trademark rights of Promasidor Holdings Limited (“PH”) recorded in share of profit of associates and joint ventures, in addition to a significant decrease in profit from the decline in animal nutrition sales.

Operating profit saw a 51.5 percent decrease of JPY 22.5 billion (US$ 206.5 million), bringing its value down to JPY 21.1 billion (US$193.6 million). This was noted as due to factors including “impairment losses on manufacturing facilities for the animal nutrition business, investments in associates and joint ventures related to PH, and so on.”

Last August, Ajinomoto Group signed a share purchase agreement to acquire a 50.1 percent equity stake in US-based French sauces and stocks producer More Than Gourmet Holdings (MTG). The agreement is facilitated in a strategic partnership through Ajinomoto Co.’s consolidated subsidiary Ajinomoto Health & Nutrition North America (AHN). The move is a bid to expand Ajinomoto’s Integrated Food Solutions business in North America.

In the same month, Ajinomoto acquired the remaining interest in its joint venture pharmaceutical company Granules OmniChem in India, through its subsidiary Bio-Pharma Services. 

By Benjamin Ferrer