Ajinomoto Co. to enter the bread market in Indonesia

Ajinomoto Co. and its consolidated subsidiaries will establish, in July 2015, PT Ajinomoto Bakery Indonesia (“ABI”), which will develop, manufacture and market frozen bread) in Indonesia, with domestic sales scheduled to start in August 2016. 

ABI will aim for net sales of IDR 193.5 billion (approximately JPY 1.8 billion2) in fiscal 2020. Through this initiative, Ajinomoto Co. will accelerate the expansion of its consumer foods business in Indonesia while aiming to make a greater contribution to the country’s well-being.

The population of Indonesia was approximately 250 million in 2013, and is projected to reach approximately 270 million in 2020. GDP per capita in Indonesia is USD 3,500, and the economic growth rate averaged approximately 6 per cent annually from 2010 to 2014, with continuing economic growth forecast (source: 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 per cent from 2008 to 2013 (source: Euromonitor International, 2013).
The new company ABI will develop and manufacture high-value-added frozen bread that is not yet widespread in the growing Indonesian bread market and has not been produced in the country to date. Products manufactured by ABI will be sold mainly in the Jakarta metropolitan area by PT Ajinomoto Sales Indonesia, which has powerful sales capabilities. The main purchasers are expected to be from the middle class, which is growing as a proportion of the population.
Ajinomoto Co. has a long business history in Indonesia, having established PT Ajinomoto Indonesia in 1969 to launch umami seasoning AJI-NO-MOTO. The company built a business foundation with the unique sales method of visiting individual vendors to sell small single-use packets of AJI-NO-MOTO that could be bought with just a coin. Since then, the company has acquired loyal customers and expanded its business with the rollout of Masako flavor seasoning, Sajiku menu-specific seasoning for various Indonesian dishes, SAORI liquid seasoning and Mayumi mayonnaise.
In its FY2014-2016 Medium-Term Management Plan, the Ajinomoto Group positions Indonesia as one of its “Five Stars” (core countries in ASEAN and Latin America) and a major growth driver. The Ajinomoto Group will achieve rapid growth with the aim of tripling net sales in the consumer foods business in Indonesia by fiscal 2020, compared with fiscal 2012.