Ajinomoto Axes Noodles JV Business in Nigeria
17 Oct 2016 --- Ajinomoto is axing its 2 billion yen ($19.2m) joint venture noodles business in Nigeria, due to the "drop in the price of crude oil".
The Japanese food giant announced details of its joint venture, called Maruchan Ajinomoto Nigeria Limited, with Toyo Suisan in Nigeria two years ago, as it looked to establish an instant noodle business in Nigeria.
The business saw Toyo Suisan, a producer of ramen noodles in Japan and owner of the brand Maruchan, handle product development and production while Ajinomoto oversaw marketing and sales.
Ajinomoto owned 50 percent of the business, Toyo Suisan 49 percent and West African Seasoning Company one percent. Investment in the business was $19.2m.
Commenting on the closure of the business, Ajinomoto said: "Based on the unclear outlook due to the substantial change in the business environment caused by the drop in the price of crude oil, the two companies have decided to cancel their joint venture agreement and to conduct dissolution and liquidation procedures."
Ajinomoto said the impact on its earnings from axing the business would be "immaterial".
Separately, Ajinomoto said it would begin the production and sales of instant noodles in India next month, after teaming up with Toyo Suisan in India.
The instant noodle market in India has grown at around 20 percent each year between 2008 and 2014, according to the World Instant Noodles Association, helped by the rising purchasing power of the middle class and population growth.
