Ajinomoto Co Inc has decided to transfer all issued and outstanding shares of its French wholly owned subsidiary Ajinomoto Sweeteners Europe SAS (ASE) to the Netherlands-based Hyet Holding BV (HH) for a token amount of Euro 1.
Ajinomoto Co has adopted ‘Fit & Grow with Specialty’ (growth driver advancement and further reinforcement of business structure with unique Ajinomoto Group specialty) as key principles of its FY2014-2016 medium-term management plan. In its sweeteners business, Ajinomoto Co is further promoting specialty by expanding its product domains for Japanese and overseas consumers under these key principles, with the aim of providing products that are both delicious and low in calories. On the other hand, the company has been studying the appropriate state of its production system for its commodity product aspartame, an amino acid-based sweetener.
The aspartame business of Ajinomoto Co began in 1982 and currently its Tokai plant (Yokkaichi City, Japan) and ASE in France handle production, with sales in approximately 80 countries and regions worldwide. The size of the global market for aspartame has been basically unchanged for the past three years, but the profitability of Ajinomoto Co’s aspartame business is on a downward trend, with a decline in selling prices due to a series of new market entrants since 2000. To strengthen the structure of this business, Ajinomoto Co decided in 2014 to consolidate its aspartame production bases at the Tokai plant and began considering candidate purchasers for ASE.
In May 2015, Ajinomoto Co received a formal offer from Hyet Sweet BV (HS), an import and sales company for sweeteners and other products based in the Netherlands, and has reached an agreement on conditions of the sale, including the employment continuation period for ASE employees, and made arrangements for the signing of the share transfer agreement. Hyet Holding, which is a fellow subsidiary of Hyet Sweet, is a holding company that has been newly established in connection with this share transfer.
Ajinomoto Co will further promote specialty by strengthening the structure of its sweeteners business through the consolidation of its aspartame production bases.
Ajinomoto Co expects to record an extraordinary loss of around Yen 7 billion from this sale, and has incorporated the loss in its consolidated performance forecast for the fiscal year ending March 31, 2016, which it announced on May 8, 2015.