Ajinomoto to return to Myanmar

TOKYO — Ajinomoto plans to relaunch production and sales of its namesake seasoning in Myanmar in 2017, hoping to tap demand in the rapidly growing Southeast Asian market.

The Japanese seasoning company halted operations there in 2000, when the country was still ruled by a military junta.

The maker of the Aji-no-moto seasoning and other food products has recently established a Myanmar unit at a capitalization of roughly 1.2 billion yen ($10.6 million). A factory with a total floor space of about 5,000 sq. meters will be set up in the Thilawa special economic zone on the outskirts of Yangon. The plant will import monosodium glutamate, or MSG, from Thailand and package it for the Myanmar market.

The operation is expected to start with 100 or so personnel, including salespeople. The Aji-no-moto seasoning will be sold in just Yangon and Mandalay initially. After expanding sales nationwide, the company aims to generate 3 billion yen in annual sales by fiscal 2020.

According to Tokyo-based Ajinomoto, Myanmar, a nation of slightly more than 50 million people, consumes roughly 52,000 tons of MSG seasonings a year, making it the fourth-largest market in Southeast Asia after Indonesia, Vietnam and Thailand. Most of the MSG seasonings, which are widely used in home cooking of hot-pot and other types of dishes, come from Chinese producers, which control 70% of the Myanmar market.

Ajinomoto first set up its Myanmar unit in Yangon in 1996. It sold its namesake seasoning there by importing ingredients from Thailand. The company stopped the operation because the military junta banned Ajinomoto from importing the ingredients. No clear reasons were given for the ban, but it was interpreted as part of the regime’s efforts to restrict foreign investment.

Following the start of democratization in spring 2011, restrictions on material imports have been lifted inside special economic zones.

Ajinomoto products are currently sold locally via wholesalers that import from Thailand. Ajinomoto aims to bolster sales by taking direct control of sales in the country.

Ajinomoto will be joining a long line of foreign companies rushing back to Myanmar. Japan’s Kirin Holdings and Asahi Group Holdings are now competing against Coca-Cola and other U.S. and European rivals in Myanmar’s beverage market.

 

Source: Nikkei

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