Ajinomoto Co. accelerates expansion in Turkish market
18 Aug 2017 --- Ajinomoto Co., Inc. has acquired an additional 50 percent of the stock of Kükre A.S., a food company in Turkey, for approximately TRY181 million (US$51.2 million) and made it a wholly owned subsidiary. With this acquisition, Ajinomoto Co. will accelerate business expansion in Turkey with the intention of further strengthening its operations in the Middle East.
The population of Turkey was about 80 million as of 2016, and the economic growth rate was firm at 5.2 percent in 2014 and 6.1 percent in 2015. In 2016, despite the impact of terrorist attacks, a slump in tourism and other factors, growth was 2.9 percent and is expected to continue. In 2011, Ajinomoto Co. established wholly owned subsidiary Ajinomoto Istanbul Food Sales Ltd. in Turkey and began sales of seasonings to restaurants.
In 2013, Ajinomoto Co. acquired a 50 percent stake in premium brand food company Kükre A.S., and has been strengthening its existing business in Turkey and expanding business in new areas of food. In 2017, Ajinomoto Co. acquired all shares of Örgen Gida Sanayi ve Ticaret A.S., a major food company in Turkey, and has been enhancing its business portfolio in Turkey and rolling out its operations into the Middle East.
As a result of steady growth in sales of vinegars and fruit sauces and enhanced initiatives for growing small-outlet retail chains since Ajinomoto Co.’s 2013 capital participation, net sales of Kükre A.S. in 2016 were approximately TRY70 million (US$19.8 million), nearly doubling from 2014. Making Kükre A.S. a wholly owned subsidiary will enable the Ajinomoto Group to act as a comprehensive food manufacturer in Turkey, adding Kükre A.S.’s KEMAL KÜKRER brand liquid seasoning business to Örgen’s Bizim Mutfak brand business for bouillon, powdered soups and other products. The Ajinomoto Group intends to further expand its business in Turkey by strengthening cooperation among Ajinomoto Istanbul Food Sales Ltd., Kükre A.S. and Örgen.
Ensuring food products business growth with a stronger regional portfolio is a key strategy of Ajinomoto Co.’s FY2017-2019 Medium-Term Management Plan. As such, Ajinomoto Co. is expanding and strengthening its business in Turkey and the Middle East, which it has positioned as “Rising Stars” under the plan. Ajinomoto Co. will continue to contribute to the health and well-being of local consumers through the development of product categories adapted to local eating habits and food culture.
Kükre A.S. will become a consolidated subsidiary of Ajinomoto Co. The effect of this change on Ajinomoto Co.’s consolidated results for fiscal 2017 will be immaterial.
