Ajinomoto invests in South America

Related tags Amino acids Amino acid

Japanese sweetener and seasonings giant Ajinomoto will drive funds
into South and Central America to strengthen its presence in the
developing markets there, announcing a raft of different investment
programmes for 2005.

The firm said it would invest Y20 billion (€0.15bn) to build new plants, in addition to the existing three factories, to produce feed-grade amino acids and amino acids for pharmaceuticals and foods in Brazil, where abundant main raw materials are available.

In addition to supplying Latin America, Brazil will become Ajinomoto's largest export base for supplying amino acid raw materials around the world, the Japanese firm confirmed.

The feed-use amino acid business has been one of the key drivers for growth at Ajinomoto over the last year. In the year to 31 March 2004, Ajinomoto's entire amino acid division posted a 14 per cent increase in sales to Y154.9 billion, while operating profits from the unit rose by an impressive 9.7 per cent to Y26.6 billion.

Most of the improvement came from a sharp rise in sale of feed-use amino acids such as lysine, threonine, and tryptophan, but food-use amino acids also performed well, in particular in Japan where there was strong demand for infusion applications and sales to beverage manufacturers.

In addition to the new South American plants, the Tokyo-based firm will open a new branch in Chile to begin sales of soy sauce and other seasonings that might be familiar in the Andean countries.

A new branch is also slated for Mexico, to help Ajinomoto 'participate fully and expand its share in the Mexican market for feed-use amino acids, which is one of the world's five largest markets'.

The firm has already established sales companies and branch offices to sell processed foods and seasonings in Ecuador, Panama and Bolivia.

These latest investments follow rapidly on from news in December that Ajinomoto will ramp up production of its sweetener on the back of growing demand for low calorie food and beverages.

Beginning in early 2005 and slated for completion by March 2006 the firm said it would expand aspartame manufacturing plants in Yokkaichi, Japan and Gravelines, France to achieve 10,000 mt global capacity for its amino acid based sweetener.

"Recent market data shows that the increasing demand for products containing aspartame, such as low calorie soft drinks, is a worldwide phenomenon, extending beyond the US and Europe,"​ said Egashira, president and CEO at Ajinomoto.

The global market for alternative sweeteners, currently leading growth in the food additives market, holds considerable potential- growing 8.3 per cent year on year until 2008 according to market analysts Freedonia - as rising health concerns drive consumers towards sugar free products and food makers introduce zero-calorie or low-calorie sugar substitutes into their new product formulations.

By 2008 Freedonia predicts food makers in the US alone will call on $5.1 billion (€4.14bn) worth of food additives.

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