Ajinomoto expands into Indonesian bread market

IN LINE with business expansion initiatives, Ajinomoto Co. Inc. has announced it will enter the bread market in Indonesia.

The company and its consolidated subsidiaries Ajinomoto SEA Regional Headquarters Co. Ltd and Ajinomoto Bakery Co. Ltd will establish PT Ajinomoto Bakery Indonesia (ABI) next month. The new company will develop, manufacture and market frozen bread in Indonesia beginning August 2016.

Based in Jakarta, ABI will offer high-value-added frozen bread such as frozen bread dough and bakery products, which have not been produced in Indonesia and have yet to be widespread in the country’s growing bread market. ABI’s products will mainly target the Jakarta metropolitan area, in particular the expanding middle class section of the population. PT Ajinomoto Sales Indonesia, which has strong sales capabilities, will handle sales.

In addition to accelerating the expansion of Ajinomoto’s consumer foods business in Indonesia, this initiative is hoped to contribute to the country’s well-being. ABI is setting its sights on a net sales of IDR 193.5 billion (approximately JPY 1.8 billion) by fiscal 2020. The new company will have approximately 50 employees and will be headed by Kaoru Kurashima, the current president director of PT Ajinomoto Indonesia. 

The population of Indonesia is projected to reach approximately 270 million in 2020. GDP per capita in Indonesia is US$ 3,500, and the economic growth rate averaged approximately 6% annually from 2010 to 2014, with continuing economic growth forecast, according to the Ministry of Foreign Affairs data (2014).

With economic growth, dietary culture is diversifying and the consumption of bread is spreading rapidly. The bread market in Indonesia was IDR 4.6 trillion (approximately JPY 43.2 billion2) in 2013, having compound annual growth rate of 13% from 2008 to 2013 based on Euromonitor International.

Ajinomoto Co. established PT Ajinomoto Indonesia in 1969 to launch umami seasoning Aji-No-Moto (R). It adopted a unique sales method of visiting individual vendors to sell small single-use packets for just a coin. With the establishment of a loyal customer base, the company has expanded with the rollout of the Masako (R) flavor seasoning, Sajiku (R) menu-specific seasoning for various Indonesian dishes, Saori (R) liquid seasoning, and Mayumi (R) mayonnaise.

The Ajinomoto Group is positioning Indonesia as one of its Five Stars or core countries in ASEAN and Latin America and a major growth driver in its FY2014-2016 Medium-Term Management Plan. The Group hopes to triple its net sales in the country’s food business in 2012 by the fiscal year 2020.