Ajinomoto strengthens global food interests

Ajinomoto's acquisition of Amoy Food Group from Danone Asia will give the Japanese giant an important foothold in the global Chinese sauce business.

The HK$1,845 million (€196m) deal includes the acquisition of Amoy's Chinese soy sauce business and frozen dimsum food operations.

In addition, Ajinomoto has also acquired a 60 per cent stake in a Chinese soy sauce joint venture in China, Shanghai Amoy Foods Group, which is again owned by Amoy Food Group.

Ajinomoto believes that the acquisitions will significantly strengthen the firm's global position.

Amoy Foods has business interests not only in Hong Kong but in North America and Europe as well, where it sells its goods through HP Foods. It enjoys the biggest share of the Hong Kong soy sauce market and claims to be the number one soy sauce retailer in the UK.

The company's frozen dimsum food business has markets in Hong Kong, southern China, North America and Australia.

Company president Norio Yamaguchi said that the Amoy brand has achieved significant awareness within the Chinese ethnic sauce segment, and that the acquisition opens up the opportunity of possible synergies between Amoy Food Group and Ajinomoto's own operations.

The company also said in a press release that upon completion of the acquisition, it would assign some officers to Amoy Food Group to facilitate these synergies as soon as possible, though it will retain the current independent management team to preserve its entrepreneurial corporate culture.

Yamaguchi also said that the transaction includes the issued stock of Amoy Food Group, a shareholder loan from Danone Asia, a subsidiary of Danone, to Amoy Food Group as well as the intellectual property rights of Amoy Food Group business.

Ajinomoto expects the acquisition will have no significant impact on the earnings for the current fiscal year. The Japanese firm dominates the amino acid market, with more than 25 per cent of the market for lysine alone and 30 per cent of the monosodium glutamate market.