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Business

Ajinomoto to ramp up Southeast Asian output capacity

Ajinomoto's RosDee seasoning dominates the Thai market.

TOKYO -- Ajinomoto plans to invest more than 10 billion yen ($99.7 million) to bolster production of food seasonings in Southeast Asia as economic growth encourages more people to seek ways to make cooking easier or eat out.

In Thailand, about 2.4 billion yen will go toward expanding the Nong Khae plant with the aim of lifting its output capacity 40% by August 2017. The facility produces RosDee, popularly used in stir-frying and soups. An expanding middle class is lifting Thai demand for seasonings, and the market has expanded about 30% in the last five years.

RosDee hit the shelves in 1979 and now holds a more than 70% share of the Thai seasonings market. The Japanese company hopes to reach 80% by bolstering output and winning over food stalls, most of which use local products, in addition to other eating establishments and households.

Ajinomoto has a long history in Southeast Asia. It began selling its namesake seasoning in Thailand back in 1961 and rang up some 111.5 billion yen in food-related sales there in fiscal 2015, making the Southeast Asian nation the largest market for the company's overseas consumer foods business.

The company will also bolster production elsewhere in the region to tap growing demand. It will invest about 2.3 billion yen to expand capacity for its namesake seasoning in Vietnam by 20% starting in August 2017.

It will also increase capacity in Indonesia for its Masako seasoning by 30% in July 2017, and for Sajiku menu-specific flavor packets by 80% that December. The projects combined are expected to cost about 5.7 billion yen.

All of these products are market leaders in their respective countries. Ajinomoto's Southeast Asian dominance owes to a unique sales network where local staffers deliver items directly to small retailers, such as stalls at outdoor markets, and collect payments on the spot.

The system creates a strong relationship between Ajinomoto staffers and business owners that lock competitors out. The company will continue focusing on on-the-ground sales toward the goal of 500 billion yen in food-related sales in Southeast Asia and South America by fiscal 2020.

(Nikkei)

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