Ajinomoto eyes 50% sales growth in two years
Firm to launch new food-based products and beef up sales team
KUALA LUMPUR: Ajinomoto (M) Bhd is targeting to grow sales by more than 50% in two years by launching new food-based products and diversifying its markets.
New managing director and chief executive officer Naoko Yamamoto said the group is also looking to expand its industrial business segment), strengthen its sales team and improve productivity with halal, safety and quality management.
“Ajinomoto Thailand, Vietnam and Indonesia are already experienced in diversification, so Malaysia can leverage from their know-how when pursuing this,” Yamamoto said at a briefing on the group’s first half results yesterday.
For the first six months ended Sept 30, Ajinomoto’s revenue rose 7% to RM211mil, but net profit was little changed at RM24.4mil.
“We are confident of continuing to do well in our second half of FY18,” she said.
Yamamoto said the group’s current year’s revenue is likely to exceed the RM420mil sales achieved in financial year (FY17).
The group is targeting to achieve net sales of RM686mil by 2020 and RM1bil by 2025.
This year’s performance, Yamamoto said, will be driven by strong sales from its consumer to business segment, supported by product diversification efforts and pricing strategy.
But she cautioned that rising production cost could limit its near-term profit growth.
“We expect raw material prices to continue to trend upwards,” said Yamamoto.
As it is, three quarters of the group’s sales comes from Malaysia.
Saudi Arabia is a major export market for Ajinomoto, followed by the United-Arab Emirates and Oman, among other markets in the Middle-East.
Yamamoto said company is always on the lookout to expand geographically.
“But, any geographical expansion has to be at the right time and right place. We already have eight branches in peninsular Malaysia and two in Sabah and Sarawak,” said Yamamoto, who stepped on board in July.
On its performance review, Yamamoto noted that Ajinomoto’s net sales achieved a compounded annual growth rate (CAGR) of 11.1% from FY14 to FY16, with FY14’s sales at RM340mil, FY15 at RM400mil and RM420mil in FY16.
Ajinomoto attributed the increase in revenue to higher sales in the consumer and industrial business segments, while the stronger US dollar exchange rate in the current quarter boosted export sales.