Ajinomoto Co., Inc. Constructing a New Factory for Liquid Seasoning In Indonesia

02 Apr 2013 --- Ajinomoto Co., Inc. announced that wholly owned subsidiary P.T. Ajinomoto Indonesia will invest approximately JPY 900 million (IDR 94.75 billion) to construct a new factory dedicated to SAORI liquid seasoning in the food products factory at the Karawang Industrial Estate, West Java, Indonesia (Karawang Factory).

This will double current production capacity and respond to the ongoing rapid growth of the liquid seasoning market in Indonesia. The start of construction was in February 2013, with operations to start in June 2014.

Currently, SAORI production is handled at both contract manufacturers in Indonesia and the Mojokerto
Factory in East Java. P.T. Ajinomoto Indonesia will construct the new factory in the Karawang Factory to prepare for projected growth in demand. This will allow the consolidation of outsourced and Mojokerto Factory production at the Karawang Factory to build an efficient production system for stable supply.

The Karawang Factory is already home to a factory for Masako flavor seasoning that was constructed with an investment of approximately JPY 3.5 billion and began operating in December 2012, and it has supported ongoing increases in production. It is also positioned as a supply base for Western Indonesia, which accounts for 50 percent of sales, as well as for Islamic countries in the Middle East, North Africa and elsewhere.

Indonesia’s economy is expanding steadily because of its growing population (approximately 240 million in 2012 according to IMF estimates) and expanding domestic demand. Further growth is expected. P.T. Ajinomoto Indonesia has been doing business in Indonesia for more than 40 years since it began producing and selling seasonings and other products in 1969. Indonesian operations play a core role in Asia, which is a crucial region for the Ajinomoto Group.

The Indonesian liquid seasoning market continues to grow rapidly as a result of improved living standards due to economic development. It is estimated to be approximately 250 thousand to 300 thousand tons annually, with a growth rate of about 10 percent per year. In this market, Ajinomoto Co.’s SAORI serves the oyster sauce and teriyaki sauce categories, which have an estimated market share of approximately 10 thousand tons annually and a growth rate of about 20 percent per year (fiscal 2012, Ajinomoto Co. estimates).

SAORI is a liquid seasoning with the concept of enabling simple, delicious cuisine by giving everyday foods new Oriental flavor. It has received the support of local consumers since its launch in 2005. Sold in small pouches that are easy to purchase, SAORI has gained acceptance for use in menus that include Chinese water spinach, a popular food in Indonesia, and tofu, with growth in sales of about 30 percent per year. Both the oyster sauce and teriyaki sauce varieties are making the top share of the household liquid seasoning market.

Ajinomoto Co.’s overseas liquid seasonings business is still a small part of its overseas consumer foods sales of JPY 183.5 billion. However, the market itself is extremely large and is expected to expand further in the future as demand for convenience rises in tandem with economic growth. Strengthening and growing the overseas consumer foods business is one of the key principles of the 2011-2013 Medium-Term Management Plan aimed at making Ajinomoto Co. a genuine global company. This expansion of production facilities will support further growth of Ajinomoto Co.’s business in Indonesia.