CONTENTS

2 Who is the Ajinomoto Group?

12 Message from the President & CEO

Our mission is to contribute 18 Growth Strategies of the Ajinomoto Group
Aiming to Become a “Genuine Global Specialty Company”

to the world’s food and wellness, 19

20
Steps toward Formulating “Integrated ASV Targets”
Basic Thinking behind “Integrated ASV Targets”

FY2014–2016 Medium-Term Management Plan

and to better lives for the future 22

23
Basic Policy
Progress Made in Fiscal 2015
24 Pursuit of Specialty / The Direction We Aim for with Our Business
25 The Idea behind “Open New Sky” (Business Domain Expansion)
26 Growth Driver Advancement “GROW”
32 Further Reinforcement of Business Structure “FIT”

Publication of “Ajinomoto Group Integrated Report 2016” 35 Evolution of Management Foundation (Management Innovation)

From 2016 onwards, the Ajinomoto Group will publish an integrated report, which combines its 47 Overview by Segment
financial report and sustainability report together. 48 Fiscal 2015 Consolidated Operating Highlights 1
49 Overview by Segment
Ajinomoto Group

Integrated Report 2016

In this integrated report, we have set out to discuss the initiatives of the Ajinomoto Group taking in
ASV (The Ajinomoto Group Creating Shared Value)—which is the creation of economic value
53 Financial Section
through the creation of social value—for realizing our goal of becoming a “Genuine Global
Specialty Company.” 54 Message from the Corporate Vice President
in Charge of Finance

We hope that this report describes the state of the Ajinomoto Group toward its sustainable growth 56 Ten-Year Summary of Selected Financial Data
enough for all of our stakeholders, including shareholders and other investors, to comprehend in
a good manner. 58 Special Feature
59 Answering the Needs of Diverse Lifestyles with Nabe Cube
60 Developing Flavor Seasonings Tailored to Each Country
Organizational Scope 61 Promoting the “Ghana Nutrition Improvement Project”
This report covers the activities of the Ajinomoto
Group, comprising, unless otherwise noted, Ajinomoto 62 Developing Cell Culture Medium for Regenerative Medicine
Co., Inc. (“the Company”) and its Group companies
(as of March 31, 2016), including consolidated with World-Class Performance
subsidiaries and other Group companies subject to
64 Making Amino Acid Manufacturing Sustainable with
reporting under the equity method. Where sufficient
information for the entire Ajinomoto Group (“the “Bio-cycle”
Group”) was unavailable, the limitation in scope is
explicitly defined. 65 Providing the Foundation for Shifting from Commodities
to Specialty Businesses with AjiPro®-L
Period Covered by this Report
Fiscal 2015 (April 1, 2015–March 31, 2016)
When appropriate, however, exceptions to this general 66 Major Subsidiaries and Affiliates
rule are made, as when citing past circumstances and
data or using recent examples for illustration purposes.
68 Corporate Data / Stock Information

Precautions Related to Forward-Looking

Front Cover Statements
Forward-looking statements, such as business
The history of life on earth began with the birth of amino acids, while the Ajinomoto performance forecasts, made in these materials are
based on management’s estimates, assumptions and
Group has been developing its business based on amino acids since its founding. projections at the time of publication and do not
The front cover of this report expresses the connection between the Ajinomoto Group represent a commitment from Ajinomoto Co., Inc. that
they will be achieved. A number of factors could cause
and life on earth through an image of 20 kinds of amino acids that are essential to the actual results to differ materially from expectations.
human body forming the shape of the earth.
 Who is the Ajinomoto Group?

Dr. Kikunae Ikeda Discovers Umami in 1908

The Aspiration of the Ajinomoto Group The discovery began with boiled bean curd with dashi (broth) made from kombu, a kind of
Professor Kikunae Ikeda and businessman Saburosuke Suzuki II were two men with a vision to help improve kelp. While dining on kombu dashi, Dr. Ikeda became convinced that there was another

the nutrition of Japanese people. The history of the Ajinomoto Group began when Mr. Suzuki started marketing basic taste altogether different from sweet, salty, sour, and bitter, and he began researching

umami, which was discovered by Professor Ikeda, as a product called AJI-NO-MOTO®. Inheriting the founding the composition of kombu dashi.
Around the same time, Hiizu Miyake, Japan’s first doctor of medicine, hypothesized that
spirit of “Eat Well, Live Well.”, which has been passed on for more than 100 years, the Group is continuing to
“good taste stimulates digestion.” Dr. Ikeda was encouraged by this idea, and ultimately
grow as an enterprise that contributes to the healthy lifestyles of communities around the world.
discovered that glutamic acid, a kind of amino acids, was what gave kombu the distinctive
taste he had been searching for. He named the taste “umami,” and proceeded to invent
a method for producing seasoning with glutamate as a key component.

The glutamic acid extracted from

“To create good, affordable seasonings and turn kombu by Dr. Kikunae Ikeda (1908)

Eat Well, Live Well. simple but nutritious fare into delicacies.”
Dr. Kikunae Ikeda, “My Motivation for Inventing
AJI-NO-MOTO” (Courtesy of Aozora Bunko)

This is the thinking that inspired the umami seasoning

AJI-NO-MOTO® more than 100 years ago.
In keeping with this original ideal,
2 Improve the Nutrition of the Japanese People 3
When Dr. Ikeda went to study in Germany in 1899, he was surprised by German people’s
we continue to create products of scientifically proven benefit
Ajinomoto Group

Integrated Report 2016

physiques and general healthiness, which fostered in him the strong desire to “improve
the nutrition of the Japanese people.” Another individual who shared in his dream was
in the interest of people’s health. Saburosuke Suzuki II, who launched a business venture to begin selling AJI-NO-MOTO®,
the world’s first umami seasoning in 1909. The origins of the Ajinomoto Group lie in this
ideal: “Eat Well, Live Well.”

The original AJI-NO-MOTO® (1909)

Eat Well, Live Well.

In 2000, researchers at the University of Miami reported the presence of umami receptors
on the tongue, and in 2006 Ajinomoto Co., Inc.’s Institute of Life Sciences discovered that
such receptors were also present in the stomach. The importance of glutamate—not only
to our sense of taste but also in the nutritional and physiological sense—is being demon-
strated more and more through our recent research. Our “Eat Well, Live Well.” is actually
an ideal that has been scientifically proven.
Today, the Ajinomoto Group continues to share this aspiration. We aim to contribute to
society in the fields of Food and AminoScience by further pursuing the potential of amino
acids that was found with the discovery of umami. Dr. Ikeda’s research notes
(Owned by the University of Tokyo’s
School of Science)

Dr. Kikunae Ikeda Saburosuke Suzuki II

Discoverer of the umami taste Founder of the Ajinomoto Group
 Who is the Ajinomoto Group?

Carrying on the “Aspiration of Our Founding”

through “The Ajinomoto Group Way” to Diversify
Our Business and Realize Globalization
The Ajinomoto Group is a food company group that got its start with the production of amino acids. Since its
founding, the Group has been scientifically exploring what deliciousness is and what makes things delicious
as it developed businesses that combined taste and science. The Ajinomoto Group is also a global amino acid
manufacturer that uses leading edge bioscience and fine chemical technologies to develop businesses in fields
other than food, guided by a customer-focused approach that provides customers and society as a whole with
the things they need and desire. With the pioneer spirit carried on since its founding, the Group has actively
expanded its business overseas and created new value through open & linked innovation. In addition, the
“Aspiration of Our Founding” is firmly rooted in “The Ajinomoto Group Way,” providing the starting point for
all of the Group’s business activities.

The Ajinomoto Group’s Business Expansion Sources of Growth for the Ajinomoto Group

Technology Customer Focus

Global
Realizing business diversification Pursuing thorough, customer-focused
4 5
and globalization through the innovations
Ajinomoto Group

Integrated Report 2016

development of core technologies
Seasonings
s &
processed
proce
ce
esse foods Starting with the discovery and commercialization of umami, The Ajinomoto Group is developing its business based on a
Amino
Am the Ajinomoto Group is using its leading edge bioscience and thorough, customer-focused approach that fully comprehends
acids
c fine chemical technologies cultivated through its research on the changes in customers’ life stages and lifestyles as well as the
umami and amino acids to realize business diversification and characteristics and needs of each region of operation. In recent
globalization. Through constant science-based approaches such years, the Group has been working to create new value that
Frozen foods
F o
as multi-dimensional analysis of deliciousness or the evidence better answers the growing needs of health and nutrition.
Coffee
e Specialty
S regarding the safety of its products, the Group is providing the
p
products
roducts
u c
chemicals Animal
Anima
malal value of amino acids in a variety of ways.
nutrition
n

Japan Food Products

d c
cts
s Life Support
International
Intern
national
onal Food Prod
Products Healthcare
Open & Linked Innovation Regional Expansion

Linked Innovation Creating new value Providing value around the world
en &
Umami
seasonings
sonings and Op Re
gio Other
O
Othe
sweeteners
e for cu
s na business
bu
u
through open & linked innovation through globalization
o lE
processed
c food
e rF xp Since its founding, the Ajinomoto Group has not only been In 1910, the following year after its founding, the Ajinomoto Group
manufacturers
n
om
an

engaging in sole efforts to develop its business but also has began exporting umami seasoning AJI-NO-MOTO® to Taiwan. In
Leading edge bioscience and
st

si
Cu

collaborated with external organizations through open & linked 1917, the Group opened a purchasing and sales office in New
on

fine chemical technologies

innovation. In doing so, the Group continues to diversify its York. Since then, the Group has been actively developing its
business and achieve results in a number of research fields. business overseas and is currently selling its products in over 130
The Ajinomoto Group Way
countries and regions.
Philosophy, the system of values shared among employees in the pursuit of business, the basic attitude, and approach to work

Create New Value Pioneer Spirit Social Contribution Value People

Aspiration of Our Founding

Eat Well, Live Well.
 Who is the Ajinomoto Group?

The Path for Growth: Overview of the Ajinomoto Group (As of March 31, 2016)

Expanding Our Business Business sites Areas where products are sold Number of production plants

While Offering Value to Society 27 countries and regions Over 130 countries and regions 119
While promoting the diversification of its business centered on technology, a customer-focused approach,
and open & linked innovation, the Ajinomoto Group has advanced globalization through regional expansion. Net sales Number of employees Number of R&D personnel
By contributing to the resolution of social issues around the world through food and wellness, the Group
continuously makes efforts to improve corporate value.
1,185.9 billion yen 33,295 Over 1,700
The Ajinomoto Group’s Path for Growth

1909 1958 1960 1980 1987 2014

Commercialization of Description of MSG Production of MSG Safety of MSG MSG finally categorized as Developing cell culture medium used
Technology monosodium glutamate (MSG) as a representative (Fermentation) re-verified by the the safest food ingredient in clinical research for regenerative
(Extraction) GRAS substance U.S. FDA by the JECFA medicine
in the U.S. CFR

1965 1970 1978 1982 2011

Production of lysine Continuous granulation Retort pouch, Manufacturing method for Examining risk of
(Fermentation method) technology bacteria control aspartame peptide disease

6 7
1909 1965 1970 1978 1984 2011 2012
Ajinomoto Group

Integrated Report 2016

Launched umami seasoning Launched feed-use lysine Launched Ajinomoto KK’s Launched menu-specific Launched Pal Sweet® 1/60 Commenced Launched
Customer
AJI-NO-MOTO® in Japan HON-DASHI seasonings Cook Do® (Sweetener) the AminoIndex® Nabe Cube
Focus
business

1963 1964 1972

Launched Kellogg’s® Launched Knorr® Soup Launched Ajinomoto KK’s
(Corn Flakes) Frozen Foods

1909 1962 1963 1970 1980 2013 2015

Open & Industry-academia Collaboration with Collaboration with CPC Collaboration with ITOCHU Collaboration with Cie Collaboration with Collaboration with
Linked collaboration between Kellogg Company International Inc. (Soup) Corporation (Frozen foods) Gervais Danone Toyo Suisan Kaisha, Ltd. T. Hasegawa Co., Ltd.
Innovation Professor Kikunae Ikeda (Corn Flakes) (Dairy products) (Instant noodles) (Fermented natural flavors)
and Saburosuke Suzuki II
2014
Collaborative development with
1973
Center for iPS Cell Research and
Collaboration with General
Application, Kyoto University
Foods Corporation (Coffee)
(Cell culture medium for regenerative medicine)

1910 1956 1960 1969 1974 1991 2015

Regional Adopted sales agent in Taiwan Established Ajinomoto do Established Established Established Eurolysine S.A. Established West African Seasoning Co., Ltd. Launched
Expansion 1917 Brasil Industria e Comercio Ajinomoto Co., PT Ajinomoto Indonesia (the present AJINOMOTO (Nigeria) Ajinomoto Windsor, Inc.
Opened New York purchasing (the present Ajinomoto do (Thailand) Ltd. EUROLYSINE S.A.S.) (the U.S.)
and sales office Brasil Ind. e Com. de (France) 1991
1918 Alimentos Ltda.) Established B&W Vietnam Co., Ltd.
Opened Shanghai sales office 1958 (the present Ajinomoto Vietnam Co., Ltd.)
1927 Established Union Chemicals Inc.
Opened Singapore sales office (the present AJINOMOTO PHILIPPINES CORPORATION)
*1 Displayed on the consolidated balance sheet as of FY1999
*2 For the coffee and edible oils business and some other businesses, the gross figures for sales and cost of goods sales
were recorded in the accounts but from FY2013 this method is changed by netting off sales and cost of goods sold and
recording the net figure in the accounts. Post-reclassification basis from FY2010.
*3 The following changes in accounting policies were conducted in FY2014. Sales promotion discounts paid to customers to
Sales Performance expand sales are deducted from net sales. Figures for FY2011 and subsequent fiscal years have been restated.

(Fiscal) 1909 1950 1960 1970 1980 1990 2000 2010 2015
 Who is the Ajinomoto Group?

Realizing Specialty through the Pursuit of

Amino Acid-Oriented R&D
Throughout its history, the Ajinomoto Group has continued to provide a wide variety of solutions related to food
and wellness on a global scale. At the same time, the Group has made efforts in amino acid-oriented R&D as
glutamic acid, which represents umami itself, is one of amino acids. Through these initiatives, the Group has
been pursuing unique, leading edge bioscience and fine chemical technologies. With these technologies as its
core, the Group has expanded its business domains and developed its original “AminoScience,” which has been
leveraged to provide high value-added materials and new business models.

Establishing Research Systems that Support Uniqueness Enhancing Technological Competitiveness with the Ajinomoto Group’s Leading Edge Bioscience
The Ajinomoto Group is processing R&D activities with the Group-wide spread view, from the fundamental technology development and Fine Chemical Technologies
for the next generation to product development for the best solution for the local needs, while three R&D bases: the Institute for Innovation, Technologies that leverage the various functions of amino acids to bring about innovation represent one of the Ajinomoto Group’s
the Institute of Food Sciences and Technologies, and the Research Institute for Bioscience Products & Fine Chemicals—all locate in Japan strengths. Supported by organizational functions such as quality assurance with world-leading analysis techniques, these technologies
and belong to Ajinomoto Co., Inc.—take initiatives in cooperation with the Research Laboratories of each Group company in Japan and give the Group a competitive edge as it expands its business.
overseas. In accordance with each business fluctuation, this R&D organization consistently make efforts on creating new value with the
Group’s customers through “Open & Linked Innovation.”

Business Departments
8 9
Group Companies
Ajinomoto Group

Integrated Report 2016

Evaluation of Formulation and
Production Departments health function emulsification
(exercise, intestinal
environment, metabolism)
R&D Planning Dept.
Evaluation of nutritional
Highly sensitive and function (people, animals,
speedy analysis and plants)
Institute of Food Research Institute for Statistical analysis
Research Labs of Granulation /
Sciences and Bioscience Products
Group Companies Processing Polymerization /
Technologies & Fine Chemicals Conditioning Delivering
the body and nutrition Film formation
delivering health (nutritional
Improvement of (physiological function)
Evaluation of
material properties function)
Intellectual Property Dept. functionality
Institute for Innovation
Design of Assembling Creating new
deliciousness deliciousness functions Hybrid
Evaluation of taste (taste function) (reactivity) manufacturing
and palatability
Amino acid function process

Platform Technologies
Microbe / Microbe breeding Fermentation
Quality Isolation / Chemical
Analysis Enzyme (molecule production
assurance Refining synthesis
research breeding) (scale-up)

Institute for Innovation Institute of Food Sciences and Technologies Research Institute for
Bioscience Products & Fine Chemicals
 Who is the Ajinomoto Group?

ASV (The Ajinomoto Group Creating Shared Value)

Aiming for Further Expansion Centered on
the Inherited ASV Initiatives Aspiration of Our Founding (1909) Help Resolve Global Issues Create Economic Value

Make a simple diet more delicious Contribute to a healthy society in Achieving social value is
The Ajinomoto Group has been engaging in initiatives to resolve social issues through its business. By improving and improve the nutrition of the every region worldwide with creating economic value (profit)
Japanese people with umami delicious nutrition
economic value through the creation of shared value with local communities and society as a whole, these
initiatives have contributed to the Group’s growth. These kinds of initiatives have been named ASV The Earth

(The Ajinomoto Group Creating Shared Value). By further advancing these ASV initiatives, the Group believes People

it can realize its goal of becoming a “Genuine Global Specialty Company.”

Global sustainability Food resources Healthy living

Living
“Eat Well, Live Well.” things
Dr. Kikunae Ikeda Saburosuke Suzuki II
Discoverer of the Founder of the Sustainability of people,
What the Ajinomoto Group Aims for umami taste Ajinomoto Group
living things and the Earth
Living with the Earth,
even a century from now
The Ajinomoto Group has clearly identified the relationship ASV with its mission and vision in terms of what the Group aims to be. As ASV
represents the essence of the Group’s business activities, the Group will develop businesses centered on ASV going forward. In doing so,
the Group will realize its mission and vision.
ASV Value Creation Model
Since its founding, the Ajinomoto Group has been working to resolve issues related to nutrition. Going forward, the Group will expand
Corporate Message the scope of these initiatives to tackle the increasing amount of social issues, and the Group will work to improve its economic value by
contributing to resolve social issues, which in turn will lead to the improvement of corporate value.
Eat Well, Live Well.

Improvement in
Corporate Value
10 11
Healthy body
Ajinomoto Group

Integrated Report 2016

Ajinomoto Group Mission Food tradition and
new adventure
(Mission)
ASV Initiatives
Our mission is to contribute to the world’s food Creating social value
and wellness, and to better lives for the future together with economic value

Economic Social Comfortable lifestyle

Value Value
Ajinomoto Group Vision (Vision)

(Japan, ASEAN, Latin America, etc.)

Regional expansion
Our vision is to become the genuine global food
company group with specialties guided by our leading
edge bioscience and fine chemical technologies
Food resources/global
sustainability Strong family and social bonds
(eating together)

Global activities resolving

Global expansion overnutrition and
undernutrition

ASV (Value)
Structural reinforcement Expansion of the social
ASV represents our unchanging commitment: and growth issues, the Group works on
With our stakeholders and businesses, we help solve society’s issues, Diversity of lifestyles
leading to the creation of economic value Aspiration of
Our Founding Expansion of
Profit expansion (1909) the nutritional issues,
the Group works on
Eat Well, Live Well.
The Ajinomoto Group Way
Living with the Earth
• Create New Value • Pioneer Spirit • Social Contribution • Value People

Ajinomoto Group Standards of Business Conduct (Principles)

 Message from the President & CEO

We will complete the FY2014–2016

Medium-Term Management Plan and
achieve profit growth to become a
“Genuine Global Specialty Company.”

Carrying on the “Aspiration of Our Founding” to

Contribute to the Healthy Future of the Humanity
and the Earth
It has been 107 years since businessman Saburosuke Suzuki II founded Ajinomoto Co., Inc., a year
after Professor Kikunae Ikeda discovered the fifth basic taste, umami. The aspiration of these two men to
promote the health of Japanese people by improving nutrition with umami has extended across the globe.
Furthermore, the Ajinomoto Group has engaged in research and development throughout the years centered
on glutamic acid, whose taste was identified by Professor Ikeda as umami, and pursued original leading
edge bioscience and fine chemical technologies as well as world-leading seasoning technologies. With
Takaaki Nishii
these technologies acting as our core, we have evolved into a unique food company group, diversifying our
Representative Director, business to span a wide range of fields, from food to healthcare and life support.
12 President & Chief 13
In the 21st century, various issues have emerged resulting from the cumulative activities of humankind.
Executive Officer
Ajinomoto Group

Integrated Report 2016

Among such issues there certainly are the issues the Ajinomoto Group can resolve by creating value
through its business activities. While engaging in business around the world, we have come to realize this
fact and have felt the gravity of the responsibilities and the expectations we must fulfill. In addition, we
have clarified the issues for which we should prioritize our initiatives by engaging in dialogue with a
number of stakeholders. These priority issues are global sustainability, food resources, and healthy living,
which represent the issues facing the 21st century human society.
These three issues intertwine and relate in a complex manner. As an enterprise centered on food, the
Ajinomoto Group has a responsibility to help provide sustainable food and nutrition. Keeping the aspiration
of our founding in our hearts, we will continue to contribute to a healthy future for the humanity and the
earth through products and services supported by science and technology through our overall business
activities. In doing so, we will realize sustainable growth for the Group going forward.

Promoting Business Strategies

Through the Pursuit of “Specialty”
As the Ajinomoto Group’s “Specialty” adopted under the FY2014–2016 Medium-Term Management Plan,
we are sharpening technologies unique to the Group and pursuing value creation that responds to a
diverse range of issues and customer needs. We will realize our goal of becoming a food company with
specialties through two elements: our leading edge bioscience and fine chemical technologies that other
companies cannot imitate and our ability to create customer value, which allows us to comprehensively
understand our customers and identify customer needs better than anyone else.
Specifically, in the food products business, our basic strategy is global rollout of our world-leading
seasoning technologies. The product development, which makes the most of local dishes in deliciousness,
leads well-being as well as nutritional improvement, so that we realize “Eat Well, Live Well.” and expand
our businesses in Japan and emerging countries. In developed countries, we are working to offer frozen
foods to present well-balanced nutrition of Japanese food and food culture. In North America, we are
going to accelerate the development of Japanese food products by leveraging the business foundation
 Message from the President & CEO

of Ajinomoto Windsor, Inc., which was launched in 2014 after the acquisition of Windsor Quality Holdings,
LP. Furthermore, in Europe, we are also working to create a foundation for the frozen food business.
On the other hand, in the industrial-use seasonings, guided by the concept of “delicious solutions” that
draw on our unique ingredients and technologies, we are focusing our efforts on businesses that enhance
the ability to resolve the food-related issues of each country and region collaborating with processed food
manufacturers, as well as our clients in the food service industry.
In the AminoScience business, for the field of healthcare, as the No. 1 amino acid manufacturer,
we aim to produce all of our amino acids through fermentation without using materials derived from
animals. By doing so, we are enhancing our ability to resolve issues and realizing business growth in
the healthcare market, starting with the area of biopharmaceuticals, where a safe and secure raw material
supply with a high level of traceability is required. In addition, iPS cell culture medium, which we have
successfully developed through industry-academia collaboration and are currently working to
commercialize, and the antibody drug contract development and manufacturing business of Ajinomoto
Althea, Inc. in the United States are proving the technologies and expertise we have long cultivated to
show new potential in the field of healthcare. As such, we anticipate that the healthcare field will act as
a core business for us in the future.
For the field of life support in the AminoScience business, we are working to improve the nutritional
status of livestock with amino acid materials. At the moment, the creation of specialty markets, including
AjiPro® -L, which was launched as a feed additive for dairy cows, is our most important business theme.
At the same time, by utilizing technology for fermentation using fewer resources, which allows for the
production of amino acids using only a small amount of raw materials, we are vigorously promoting both
reductions in our environmental burden and increases in production of animal husbandry, which in turn
Pursuing ASV, the Very Essence of the Ajinomoto
14 is helping to reduce costs. Furthermore, sales of our insulation film for personal computers, which we 15
developed based on the technologies cultivated in amino acid manufacturing, have grown to the extent Group’s Business Activities
Ajinomoto Group

Integrated Report 2016

that we now boast a global market share. Going forward, we anticipate its expansive application into
smartphones and tablets. The Ajinomoto Group has adopted the target of becoming a global top 10 class food company around
2020. As the key to achieving this target, we are making efforts to advance ASV (The Ajinomoto Group
Creating Shared Value). ASV is a highly strategic initiative to accelerate business growth while creating
Dealing with the Issues Facing Our Management both social and economic value. This value creation is achieved by contributing to the resolutions of
issues facing the 21st century human society through our “Specialty” products and services, which
Amid our global expansion, we are constantly facing fluctuation risks in exchange rates and prices of raw
are supported by the Group’s unique technologies and expertise related to food and amino acids. ASV
materials and fuel. To respond to these kinds of risks, we will work to strengthen our business structure
represents the chain of events that will allow us to realize our goal of becoming a “Genuine Global
through the promotion of “Specialty” and revise our business portfolio. In addition, by striving to maintain
Specialty Company” and continue to grow in a sustainable manner.
a healthy balance in the ratio of our businesses in Japan, the United States, and European countries, to
We have identified several materiality items based on the level of importance to the Group’s business
those in emerging countries, including the “Five Stars,” we aim to create a situation where we can benefit
and society as a whole. We have also established global sustainability, food resources, and healthy
from the effects of natural hedging. Furthermore, while prioritizing the safety of our employees above all
living as three issues facing the 21st century for which we should work to resolve through our business.
else, we will need to continue promoting our businesses in a steadfast manner in emerging countries that
We aim to create social value by specifically incorporating measures to resolve these three issues in
face potential geopolitical risks in order to have these businesses act as the engine for future growth.
our medium-term management plan. As there is high social need for resolving issues related to people’s
In addition to economic and geopolitical risks, the environment in which the Ajinomoto Group operates
health and nutrition, the most significant challenge for us as a company that centers its business on
faces global environmental issues that are becoming more and more severe as well as increasingly more
food and healthcare is meeting the expectations that society has of us. Also, in regard to environmental
intense demands from consumers for safe and trustworthy products. As such, the level of customer needs
issues such as global sustainability and food resources, we will proactively participate in the United
is becoming higher and more diverse from the perspective of co-existence and co-prosperity between
Nation’s Sustainable Development Goals and The Consumer Goods Forum.
society and the earth. In light of this situation, we will enhance our ability to respond to the individual
Going forward, we will advance our ASV initiatives in each country and region of operations. To further
issues in our six areas of operation, which are Japan, ASEAN, China, Europe & Africa, North America, and
enhance the value that exists in these countries and regions, sharing information on the evolution of ASV
South America, in accordance with our business strategy of pursuing “Specialty.” At the same time,
with our stakeholders is absolutely essential. As such, we will proactively inform our stakeholders on the
prompt management with effective governance by establishing consistent Group-wide standards for
kind of social value we aim to create as well as the initiatives we will take to create that value. At the same
business conduct and policies for business execution is necessary.
time, we will convey to stakeholders the efforts that each Group company is making toward our mission of
resolving such issues as global sustainability, food resources, and healthy living, as well as the progress
of those efforts, which in turn will further clarify the Group’s path toward growth. In these ways, we will
realize a situation where we can continue to advance our ASV initiatives in a transparent manner. In order
 Message from the President & CEO

As for governance, which is something a “Genuine Global Specialty Company” should have firmly in
to make our ASV initiatives even more effective, in April 2016, we established Global Communications
place, we are working to improve the quality of our management in accordance with the various regulations
Department with the purpose of enhancing our ability to communicate globally, and Global Human
of Japan’s Corporate Governance Code. At the same time, in regard to our system for business execution,
Resources Department with the purpose of promoting diversity and encouraging the utilization of
we have created the concept of “Governing HQ” and “Delegated Front” in order to accelerate the pace
global human resources.
of growth, especially overseas. While working to delegate authority to “Delegated Front,” we have
The Ajinomoto Group positions ASV as a valuable initiative to promote in each country and region. As
established the Global Governance Policy (GGP), which stipulates policies for proposing plans, completing
such, all Group companies in Japan and overseas, in addition to Ajinomoto Co., Inc., will make dedicated
transactions, and making reports. In these ways, we are making concerted efforts to strengthen our
efforts to evolve ASV going forward.
management foundation. Moreover, we are actively promoting interaction with global human resources
with the aim of assembling a group of high-quality right personnel to be assigned for the job.
Formulating Integrated Targets of Financial and Strengthening our management foundation in this manner is essential to realizing our goal of becoming

Non-Financial Targets to Evolve ASV, and a “Genuine Global Specialty Company.” We will continue these efforts going forward based on dialogue
with our stakeholders.
Becoming a “Genuine Global Specialty Company”
With the slogan of becoming a “Genuine Global Specialty Company,” this integrated report indicates the To Our Shareholders and Investors
direction and vision that the entire Group aims to achieve. Specifically, this report declares our strong
ambition to demonstrate our value to the global society and realize an indispensable existence to that The Group aims to realize ¥150.0 billion in operating income around 2020. In fiscal 2016, the last year of

society through unique initiatives that leverage our strength of “Specialty,” allowing us to continue to perform the FY2014–2016 Medium-Term Management Plan, we set a target for operating income of ¥91.0 billion.

the tasks that other companies cannot. At the same time, the report comprehensively introduces the In fiscal 2015, as a result of the efforts we have made in structural reforms during the first two years of the

initiatives we are undertaking in each country and region of operation to resolve the issues facing the plan, we were able to achieve that figure one year ahead of schedule. While we anticipate that fluctuating

21st century human society, as well as our approach to realizing sustainable growth. Now, we are working exchange rates and prices of raw materials and fuel will have a negative impact on our performance in

to set our FY2017–2019 Medium-Term Management Plan. As a part of the plan, we are working to further fiscal 2016, we will maintain our dedication to achieving all of our targets for the final year of the FY2014–

clarify our corporate vision that setting 2020 as our milestone year, we can gain the trust of all our 2016 Medium-Term Management Plan.
16 In fiscal 2015, we were able to display a sign of confidence in our sound management to our shareholders 17
stakeholders and raise their expectations of us as a “Genuine Global Specialty Company.” To this end,
Ajinomoto Group

Integrated Report 2016

we are currently formulating “Integrated ASV Targets,” which combine financial and non-financial targets. and investors by announcing dividend increases and share repurchase of ¥30.0 billion. In addition, we

In order to continue to coexist in harmony with society going forward, we plan to comprehensively convey adopted the policy of having total shareholder returns of minimum 50% over the three-year period of the

our path for the future, including how we will contribute to improving people’s nutrition, how we will respond FY2014–2016 Medium-Term Management Plan. Based on forecasts for our business performance as of

to environmental and social issues amid rising international demands and expectations for sustainable May 2016, we are now anticipating total shareholder returns of 68%. In order to further improve our corporate

development targets, and how we will connect these kinds of non-financial initiatives to financial growth. value going forward, we will accelerate the pace for growth through the evolution of ASV while working to
enhance shareholder returns. In these ways, we will fully prepare ourselves to live up to the expectations of
our stakeholders.

July 2016

Takaaki Nishii
Representative Director,
President & Chief Executive Officer
 Growth Strategies of the Ajinomoto Group

Aiming to Become a “Genuine Global Specialty Company”

The Ajinomoto Group is accelerating its efforts toward becoming a “Genuine Global Specialty Company”
even stronger through implementing reforms of its business structure and accelerating its growth momentum
with setting its target of becoming a global top 10 class food company around 2020. In order to realize the target,
the Group is promoting the formulation of “Integrated ASV Targets” to foster ASV—which is the creation of social
and economic value in harmony—as a core driving force behind the Group’s growth.

Steps toward Formulating “Integrated ASV Targets”

Becoming a global top 10 class food company means that the Ajinomoto Group will become an enterprise that demonstrates its presence
in the global society and will continuously receive high praise from the society. Specifically, the Group aims to be an enterprise that can
achieve the financial targets of a global company’s scale of business and profit together with global efficiency standards, in addition to
achieving the non-financial (ESG) targets of contributing to the future progress of humanity and the earth through industry-leading core
technologies and a globally diverse group of talent. Accordingly, the Group plans to indicate the specifics of its “Integrated ASV Targets”
in the FY2017–2019 Medium-Term Management Plan.

Resolving social issues and generating significant social value with the unique approach of the Ajinomoto Group
Generating the formulation of “Integrated ASV Targets” to foster ASV as the driving force behind the Group’s growth

Growth Strategies of the Ajinomoto Group Integrated ASV Targets

18 19
This section provides the growth strategies of the Ajinomoto Group that aim to realize the
Ajinomoto Group

Integrated Report 2016

To become one of the global top 10 class food company
Group’s goal of becoming a “Genuine Global Specialty Company.” Financial Non-Financial
• Achieve the business and profit scale • Contribute to the future progress of humanity
of a global company and the earth
• Meet global efficiency standards to Essential Elements • Possess our own industry-leading
generate profit core technologies and business domains
• Assemble a group of globally capable and
diversified talent
CONTENTS
Aiming to Become a “Genuine Global Specialty Company” Eat Well, Live Well.
19 Steps toward Formulating “Integrated ASV Targets” Improve Corporate Brand Value
20 Basic Thinking behind “Integrated ASV Targets”
Financial Targets Non-Financial Targets
• Scale • Efficiency/Profitability • Environmental (E) • Social (S) • Governance (G)
FY2014–2016 Medium-Term Management Plan
22 Basic Policy • Aim for presence and impact • Operating income margin Close link to
required to achieve ASV • EBITDA margin the UN’s
23 Progress Made in Fiscal 2015
• Adopt operating income • ROE/ROA and others Sustainable
24 Pursuit of Specialty / The Direction We Aim for with Our Business as a profit indicator Development
for main business Global sustainability Food resources Healthy living Goals
25 The Idea behind “Open New Sky” (Business Domain Expansion)
26 Growth Driver Advancement “GROW”
32 Further Reinforcement of Business Structure “FIT” Monitoring Indicators Ongoing dialogue with and feedback from investors and employees

35 Evolution of Management Foundation (Management Innovation)

 Growth Strategies of the Ajinomoto Group Improve Corporate Value

Basic Thinking behind “Integrated ASV Targets”

Improve Corporate Brand Value

Financial Targets Non-Financial Targets

To become a global top 10 class food company around 2020, the Ajinomoto Group is working to realize high-quality profit growth while Through dialogues with external experts, the Ajinomoto Group has identified several materiality items in non-financial areas by evaluating
pursuing its “Specialty.” Based on the following roadmap, the Group is steadily making efforts to realize its targets for fiscal 2016 and their level of importance to the Group’s business and society as a whole. The Group has also determined “global sustainability,”
beyond, to fiscal 2020 onward. “food resources,” and “healthy living” as three issues facing the 21st century human society, which should be solved through its business
activities and is now engaging in initiatives to do so. For making our contributions toward the solution of social issues more transparent,
Roadmap to Fiscal 2020 Achieve stable profit growth with a shift to “Specialty” we are now on our way to identifying what social values we generate and setting numerical targets of those values. We are planning to
EPS growth of around 10% per year
indicate non-financial targets more specifically in the FY2017–2019 Medium-Term Management Plan.

Materiality Matrix of the Ajinomoto Group

Transition to Major Food safety

Education
a global food company Food shortages
Climate change
Accelerate growth momentum Become a top 10 class Community development Undernutrition
Build foundation for Accelerate with the aim of food manufacturer* Water
Gender issues
a global company becoming one of the top 10 class Overnutrition
* Excludes beverage
manufacturers Biodiversity

Importance to society
Waste reduction
FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2020~
(Results) (Results) (Results) (Results) (Results) (Forecast) (Target) (Vision) Land grabbing Senior nutrition
Urbanization/depopulation
Operating income (¥ Bil.) 72.6 71.2 61.8 74.5 91.0 91.0 91.0 150.0
Child and forced labor
Operating income margin 7.5% 7.5% 6.5% 7.4% 7.7% 7.7% 8% 10%

ROE 6.9% 7.8% 7.1% 7.4% 9.8% 8.1% 9% 10%~ Preventing corruption Supply chain management

EPS (¥) 61.3 74.4 68.7 78.5 108.1 89.0 100.0 150
Food loss and waste
Operating income excl. goodwill*1 (¥ Bil.)/
20 75.3 (7.5) 98.1 (8.3) 97.8 (8.3) 21
Operating income margin (%) Animal welfare Responsible marketing
Ajinomoto Group

Integrated Report 2016

ROE excl. goodwill*1 7.4% 10.7% 9.0%
Employee health and safety
EPS excl. goodwill* (¥)
1
79.4 117.8 98.7

Bulk business profit ratio*2 23% 19% — 15% 16% 15% Around 10% 10% Human resources development

*1 Reference data excluding amortization of goodwill

*2 Bulk businesses: Umami seasonings for processed food manufacturers, animal nutrition, sweeteners Moderate Importance to the Group’s business Major

Reaching Financial Targets by Creating Social Value through Our Business

Approach to Resolving Social Issues Social Issues the Ajinomoto Group Should Work to
Examples of the Ajinomoto Group’s Social Value Creation Resolve through its Business Activities (Summary)
Our Cook Do® and Masako® seasonings help resolve issues related to nutrition by getting people to eat well-balanced portions Major
By utilizing our leading edge bioscience and fine Healthy body
of meat and vegetables.
chemical technologies and deliciousness technologies, Food tradition and
Our Nabe Cube hot pot seasoning makes it possible to enjoy healthy and delicious hot pot dishes, even for one person. and by delivering good and healthy food, we new adventure
contribute to the development of a healthy body Comfortable lifestyle
Please refer to page 59 for details.

Importance to society
• Contributing to a • Improving food Contributing to healthy
low-carbon resources and living through improved
Our Amino Aile® containing “a blend of essential amino acids with 40% leucine” contributes to support muscle building for people society food productivity nutrition
We contribute to the development of a society Strong family and social
in their 60s and over. • Protecting and • Maximizing the
that enables strong family/social bonds and bonds (eating together) • Undernutrition
preserving effective use of • Overnutrition
diverse lifestyles through eating well Diversity of lifestyles ecosystems and food resources
Our KOKO Plus nutritional supplement, which is added to the traditional Ghanaian baby food “koko,” helps improve the nutrition • Rapidly aging society
biodiversity and foodstuffs
• Recycling
Healthy living
of children in Ghana.
resources
Please refer to page 61 for details. We contribute to the sustainability of the Earth, Food resources
with our customers and society, across the Living with the Earth
Our resource-saving fermentation technology contributes to the efficient use of food resources and energy. value chain of production to consumption Global sustainability
Please refer to page 34 for details.

Our AjiPro®-L helps improve the nutrition of dairy cows and enhance milk production. We create value through the perspectives Moderate Importance to the Group’s business Major

Please refer to page 65 for details. of the customers, with our global, top-class
and diverse human resources
Human resources that support the resolution of social issues
Our efforts in promoting resource recycling through the creation of bio-cycles help lower environmental impact.
Please refer to page 64 for details.
 Growth Strategies of the Ajinomoto Group

FY2014–2016 Medium-Term Management Plan

Basic Policy Progress Made in Fiscal 2015
With the aim of becoming a “Genuine Global Specialty Company,” the Ajinomoto Group adopted the basic policy of “FIT & GROW Net sales in fiscal 2015 amounted to ¥1,185.9 billion, and operating income stood at ¥91.0 billion. Not only did the Company get
with Specialty” under its FY2014–2016 Medium-Term Management Plan, with “GROW” referring to growth driver advancement and a record-high level of operating income, but also it achieved its target for operating income in the last year of the Medium-Term
“FIT” referring to the further reinforcement of business structure. The Group has also been engaging in efforts toward the evolution Management Plan, one year ahead of schedule. In addition, ordinary income totaled ¥94.3 billion, and profit attributable to owners of
of its management foundation (management innovation), which supports as its basis. parent was ¥63.5 billion, both representing record-high levels.
In fiscal 2016, foreign exchange rate translations are likely to have a negative impact due to yen appreciation; furthermore, the prices of
fermentation raw materials and fuel are expected to rise, along with the prices of food product raw materials. However, we will promote

Pursuit of Specialty Specialty initiatives to further improve profitability as we aim to achieve our targets of FY2014–2016 Medium-Term Management Plan.

Progress of Strategic Targets for Becoming a “Genuine Global Specialty Company”

Become a food company group with specialties driven by leading edge bioscience and fine chemical technologies FY2014 FY2015 FY2016 FY2016 FY2020~
KPI
(Results) (Results) (Forecast) (Target) (Vision)

Operating income ¥74.5 billion ¥91.0 billion ¥91.0 billion ¥91.0 billion ¥150.0 billion

Further Reinforcement of Business KPI Operating income margin 7.4% 7.7% 7.7% 8% 10%
Growth Driver Advancement GROW Business Structure FIT EBITDA 12.3% 13.8% 11.7% 12.5% —

Company-wide overseas profit ratio 60% 57% — 60% —

Global growth Structural reform centered on a shift Five Stars sales ratio*1 (vs. FY2012)
Growth Driver 53% 59% — 70% —
Be each country’s No. 1 in deliciousness through from commodities to specialty Advancement
Ratio of R&D investment in Company-wide
assimilation with customers/countries (regions) – Shift from bulk to specialty businesses based on — — — 50% or more —
strategic themes for future growth
our strengths in materials and technologies and our ability
– Japan Food Products for ONE: Create value for increasingly Retail MSG ratio 70% 70% 71% 74% 85%
to identify customer needs and create customer value

Strategic KPI
personalized/diverse customers Further
22 – Strengthen cost competitiveness centered on fermentation Reinforcement Retail sweeteners ratio 49% 49% —*2 57% — 23
– International Food Products for ALL: Rapid growth centered of Business
Ajinomoto Group

Integrated Report 2016

using fewer resources
on the “Five Stars” Structure Specialty ratio of animal nutrition 32% 35% 50% 40% 60%
– Further structural reform of Pharmaceuticals, including
collaboration, alliances, etc.
R&D leadership Candidates for future management from
Evolution — — — 200 employees —
introduction of global HR system
– World No. 1 in seasonings: of the
Enhance capital efficiency to boost
• Deepen our ability to define and design deliciousness Management Ratio of locally hired overseas executives 40% 41% — 50% —
shareholder value and ROE Foundation
in three dimensions Ratio of female managers 15% 16% — 20% —
– Focus on a value-added value chain
• Expand into adjacent product categories
– Cash management (improve efficiency of working capital, etc.) Water use per unit of production 73% 75% 70% or more Reduce by at
– Original leading edge biotechnology platform: reduction reduction*3
—
reduction least 70%
– Optimize business portfolio and functional value chains (vs. FY2005)
• New business model in the specialty materials
(production/distribution/shared functions) 75% 79% 70% or more Reduce by at
and healthcare fields Discharged water per unit of production —
(vs. FY2005) reduction reduction*3 reduction least 70%
Environmental
KPI CO2 emissions per unit of production 28% 33% 35% or more
— —
(vs. FY2005) reduction reduction*3 reduction

Renewable energy use ratio 15% 18%*3 — 15% or more —

Resource recovery ratio (waste + by-products) 99.4% 99.6%*3 — 99% or more 99% or more
Evolution of the Management Foundation (Management Innovation)
ROE 7.4% 9.8% 8.1% 9% 10%~

Corporate governance: EPS growth rate

14% 37% (17%) Around 10%
—
(vs. FY2013) (vs. FY2014) (vs. FY2015) (3-year average)
“Governing HQ” and “Delegated Front” Shareholder
Increase flexibility by expanding delegation of authority to ASEAN and Latin America Return KPI
Cumulative
Total shareholders’ return 36.0% 73.0% 50% or more —
(3 years): 68%
Solid and large class of global human resources:
Diversify internally and externally with 200 next-stage global management personnel and local specialist resources Payout ratio 30.6% 25.9% 33.7% 30% —

Open New Sky: Financial (growth) Financial (scale) Financial (efficiency) Healthy living Food resources Global sustainability Human resources
*1 Listed as the total amount of net sales (external + consolidated)
Daily efforts to fl exibly use external capabilities and expand into adjacent domains with a wider approach
*2 As of fiscal 2016, accelerate international household business expansion with a portfolio shift in international processed foods (powdered beverages).
As revisions have been made to numerical assumptions in accordance with this change, the forecast for fiscal 2016 does not include numerical figures.
*3 Does not include the business performance of Ajinomoto Windsor, Inc.
 Growth Strategies of the Ajinomoto Group

Pursuit of Specialty The Idea behind “Open New Sky” (Business Domain Expansion)
The “Specialty” that the Ajinomoto Group pursues is the source of the Group’s strengths. The term refers to the high added value created Guided by the concept of “Open New Sky” (Business Domain Expansion), the Ajinomoto Group is promoting the flexible use of external
from combining tangible strengths, such as the Group’s material capabilities grounded in leading edge bioscience and fine chemical resources and a broader approach for expanding into adjacent domains, which leads its rapid growth going forward.
technologies, with intangible strengths, such as identifying customer needs and creating customer value. “Specialty” also refers to the way
the Group delivers added value by transforming technology and materials into retail products using its specialty materials, which leverage
the Group’s leading edge bioscience and fine chemical technologies, and its in-depth understanding of consumers.
Open New Sky
Sources of the Ajinomoto Group’s Specialty

Strengths in leading edge bioscience

Ability to identify customer needs
and fine chemical technologies on
M&
As va t i
/I nno
Ability to create customer value a ins
Strength in materials om
nt d
Ope ad jace
J Vs n& in to
/ Pa L ink and
r t ne
r sh ed E xp
ips
/ Te
ch n
olo
Specialty materials Shift to retail Solutions gy
Organic
Create competitive materials that Assimilate with diverse customers and Create a business model originating
use the Ajinomoto Group’s unique regions to provide value tailored to from our changing customers using
leading edge bioscience and fine users with leading edge technologies our original materials and technologies
chemical technologies (services/applications/information)
– Create value for increasingly personalized/ Existing Product Domain
– New taste substances diverse consumers (Nabe Cube, etc.) – “AminoIndex technology,”
24 – Highly functional lifestyle-related materials/ – Help resolve over/undernutrition 25
support service for advanced medicine, etc.
new biomaterials – Expand retail versions of bulk materials
Ajinomoto Group

Integrated Report 2016

– Highly functional feed-use amino acids, etc. Examples of using external resources (M&A) Approach to expanding into adjacent domains
• Ajinomoto General Foods, Inc. • Focus on the resources of existing products to uncover
Expanded coffee business and opportunities in domains adjacent to the existing domain
The Direction We Aim for with Our Business created synergies • Use external resources in the market to expand into
other markets
Based on its essential strength “Specialty,” and through flexible cooperation with external resources, the Ajinomoto Group aims to become • Windsor Quality Holdings, LP
a food company group with specialties that is driven by leading edge bioscience and fine chemical technologies with “Consumer Foods” Acquired distribution networks and
and “AminoScience” as the two pillars of its business. production bases in North America Expand markets Toss Sala®
Consomme
Expand products

Market A Brand
“The Ajinomoto Group Creating Shared Value” (ASV)
Examples of using external resources (Open & Linked)
Sales Products Technology
“Genuine Global Specialty Company” Market C
• Toyo Suisan Kaisha, Ltd.
Expanded sales in the overseas
Facilities Channels
Consumer Foods (Branded Foods) AminoScience frozen noodle business

Japan Food Products Life Support

• Genexine Co., Ltd. Market B

Leveraged development network

International Food Products Healthcare and promoted commercialization
Nabe Cube
of biopharmaceuticals
Open & Linked Innovation Examples of expanding into adjacent domains
• Nabe Cube/Cook Do® Kyo-no Ohzara
– Use technologies/brands of existing products to expand
Intangible strengths (Ability to identify customer needs/Ability to create customer values) into adjacent markets
• AjiPro®-L (Lysine for dairy cows)
– Add to technology of an existing product to create a
Strengths in leading edge bioscience and fine chemical technologies/Strengths in materials different target market
 Growth Strategies of the Ajinomoto Group

Growth Driver Advancement “GROW” 2. International Food Products for ALL: Rapid growth centered on the “Five Stars” and acceleration of
rolling out to adjacent countries
Global Growth We have given the name “Five Stars” to Thailand, Brazil, Indonesia, Vietnam, and the Philippines, which represent the core countries
1. Japan Food Products for ONE: Realizing stable growth by continuing to create value for our where we engage in business in the regions of ASEAN and Latin America. We are working to grow sales by becoming No. 1 in deliciousness
in each local market. In addition, we will promote the establishment of a business foundation that allows us to realize rapid growth in the
increasingly personalized and diverse customer base
“Rising Stars,” which represents major regions including Africa, Europe, and North America.
In the Japanese market, our home and largest business foundation, we will focus on creating new categories and realize stable growth
by continuing to promote specialties through our unique materials and technologies together with monitoring the consumption trends of
our customer base, which are becoming increasingly personalized and diverse. Core Strategies for Doubling/Tripling Growth in the “Five Stars”

Target Image* and Value Offered (Examples) Existing core fields

Special
Strengthen and newly expand core seasoning fields
Feature:
Vietnam
Vie
Viie
etna
tnam
Demographic attributes
“Developing
(Income, etc.) Next-generation core fields
Phi
P h
hillip
hi lip
ppin
pin
pi
Philippines ne
es
s Flavor Seasonings
Introduce local core products in each country,
×3
Customers who enjoy including horizontal product rollouts Tailored to Each Country”
their diet 3
×3 (Please refer to page 60.)
Technologies
Ind
Ind
In
ndone
on
nesia
neesi
sia
s
Indonesia ia
a
Respond with insight on each target Channel expansion
Customers who prioritize the Customers who consume
shortening of cooking time without being wasteful using scientific technologies for Expand business foundation from solid
deliciousness ×3
3 traditional channels to restaurant channels and
Customers who live Customers who modern channels
•Technology that softens materials in a short period of time
a frugal lifestyle eat alone
•Technology that reproduces rich flavors
•Technology that turns materials into cubes Expansion of middle/upper income segment Rollouts to adjacent countries
Customers who consume in •Technology that blends fine powders
Modernization of eating habits/sales channels Expand business out from the “Five Stars” into [Indonesia]
reasonably small volumes
26 adjacent countries 27
Established a frozen bread
company in July 2015,
Ajinomoto Group

Integrated Report 2016

B
Bra
ra
razil
zil
zi
zil
Brazil with sales to begin in
Lifestyle Inorganic growth August 2016
(Strength of food preferences) Strengthen functions to handle inorganic growth at
×3
Assumed from Ajinomoto Co., Inc. AMC Report and Dentsu Inc. d-camp, “Mama Labo” Report regional headquarters in ASEAN and Latin America
Scale of sales expansion by FY2020
and “Food Lyfestyle Labo” Report
(vs. FY2012, local currency basis)

[Pakistan]
Established a joint venture
with leading local conglom-
Cook Do®
erate the Lakson Group in
Nabe Cube Oniku-Yawaraka-No-Moto Toss Sala® Kyo-no Ohzara
July 2016 that will import
and sell halal-certified
seasonings from Indonesia
Our cube technology compresses Our original materials use Our fine-powder blending Our original materials from Core Strategies in the “Rising Stars”
deliciousness into tiny cubes, the power of enzymes to soften technology disperses our unique technology reduce
allowing for meals with smaller meat and enhance its juiciness. ingredients in a uniform boiling time significantly.
portions. By adjusting the These materials meet the needs manner, realizing rich tastes These materials allow
Africa and the Middle East Europe and North America
number of cubes used, this of families who eat at separate and flavors. This technology customers to make delicious Accelerate rollouts to adjacent Strengthen products and
technology makes it possible times, allowing them to enjoy allows customers to prepare boiled meat and vegetable Middle East countries centered on umami North establish a sales foundation
America
for customers to enjoy hot pot meals and boxed lunches with an attractive dinner table even dishes without taking up seasoning AJI-NO-MOTO® Europe in the frozen foods, instant
dishes alone or with a large delicious and tender meat when they have little spare time. their time. Africa noodles, and restaurant
group of people. even after a fair amount of time channels
has passed since preparation.

[Turkey]
Accelerate business expansion by combining the brand Case Study:
Special Feature:
power and distribution capabilities of Kükre A. ., in which “Reinforcing the Frozen Foods Business
“Answering the Needs of Diverse Lifestyles with Ajinomoto Co., Inc. acquired a 50% stake in 2013 with the in North America through M&A”
Ajinomoto Group’s product development and production
Nabe Cube” (Please refer to page 59.) (Please refer to page 30.)
technology capabilities
 Growth Strategies of the Ajinomoto Group

R&D Leadership Contribute to resolving issues 2. Creating new business models by leveraging the Ajinomoto Group’s comprehensive capabilities
Supported by its world No. 1 seasonings and leading edge facing the 21st century human society
using external resources
biotechnologies, the Ajinomoto Group is strengthening its —Global sustainability, food resources, healthy living—
In the healthcare field, the Ajinomoto Group is leveraging the comprehensive strengths of the Group, starting with the Group’s
capabilities in R&D, including the utilization of external proprietary, leading edge bioscience and fine chemical technologies as well as external resources to create new business models
R&D
resources in a flexible manner, in order to contribute to leadership in areas such as regenerative medicine and biopharmaceuticals. The Group will support the nutritional health of not only adults and
resolving the issues facing the 21st century human society. Invest more than 50% of R&D resources in Company-wide the elderly but also infants and athletes going forward.
strategic themes for future growth

Leading edge
World’s No. 1 in seasonings biotechnology platform Healthcare Field Special Feature:
Science of seasonings and Creation of specialty materials
outlet expansion and commercialization of “Developing Cell Culture
advanced medicines
Expanding and developing Medium for Regenerative
businesses in regenerative Medicine with World-
Strengthened R&D capabilities Class Performance”
medicine fields, including
Open & Linked Innovation
tissue therapy (Please refer to page 62.)

Regenerative medicine

1. Further deepening our technologies for deliciousness and promoting expansion of outlets Providing products backed by
research on the effectiveness,
for seasonings, including external applications Using small-molecular
nutritional value, and physiology
drugs as a foundation to
Through the analysis of mechanisms that create deliciousness and the establishment of substantive technologies to freely design and 2015 of amino acids
provide high value-added iPS cell culture medium
reproduce deliciousness, the Ajinomoto Group will maximize the potential of its existing products. In addition, the Group will expand into
services with leading edge StemFit® AK02N 2013 Wellness
new regions and work to meet the cooking and dining needs of communities in these regions. biotechnologies Amino Care®
2012 Ajinomoto Jelly Leucine 40
Genexine Co., Ltd.
Biopharmaceutical CDMO
2013
Deepen Our Ability to Define and Design Deliciousness in Three Dimensions Expand Outlets 2013 Ajinomoto Amino Aile®
28 29
Althea, Inc.
2013
Ajinomoto Group

Integrated Report 2016

Cell cultures for stem KOKO Plus
Components of “Deliciousness” cell proliferation and
Analyze the mechanisms Maximize strength 2012 Granules OmniChem
CORYNEX® differentiation 2005
External Environment of existing products Private Ltd. Glyna®
that create deliciousness Tailor-made solutions
Occasion Relationship with people Polymer biopharmaceuticals, for nutrition
• Investigate the interplay among protein antibody drugs
Neuroscience tastes, aroma, and texture using 1987
Experience/Information Health fundamentals,
ASF cell culture medium medical and nursing
receptor response technology
series care foods
AJIPHASE®
• Design a model for measuring (infant~the elderly)
Expand regions (Rising Stars) Amino acids
oral senses 1989 S.A. Ajinomoto Cell culture media for 2012
• Non-umami-using cultures, etc. OmniChem N.V. therapeutic antibodies Amino VITAL® GOLD
(South Asia, etc.) Nucleic acid 2015
Flavor (Aroma) • Next emerging nations medicine Amino acid cell
Additional application
culture medium 1995 Amino VITAL ®
for pancreatic cancer
(Africa, the Middle East, etc.) Amino acids for foods Small-molecular drugs
Create technologies to Sports nutrition 2011
2016 EA Pharma Co., Ltd. Amino acids for Custom drug AminoIndex® Cancer
Tastes freely control deliciousness Wellness materials
pharmaceuticals manufacturing risk screening (AICS)
Kokumi
• Acquire key ingredients in flavor Medicine
Amino acid Leading edge bioscience and Diagnostics (lifestyle
and texture 2010 Ajinomoto materials Amino acid analysis and treatment)
Umami
fine chemical technologies technology + Solutions
– In-house development plus Pharmaceuticals Co., Ltd.
Salty
5 basic Sour Address changing preparation/menu
tastes partnership/M&A
needs through technology Aiming for a specialty pharma in In addition to diagnosis,
Sweet Bitter • Create formulation/application
technologies
the area of gastrointestinal Healthcare Field expanding into lifestyle diseases
• Simplify cooking of traditional dishes diseases and nutrition administration
• Shift to in-house production of • Overnutrition/undernutrition
Texture main raw materials • Deal with single servings

A conference presentation on using “Amino

Index Technology” to identify high-risk groups for
lifestyle diseases in collaboration with Mitsui
Case Study: Formed a business alliance with T. Hasegawa Co., Ltd. in Memorial Hospital
“Commercialization of the Ajinomoto Group’s Proprietary August 2015 to engage in the research, development, and
Glutamyl-valyl-glycine” (Please refer to page 31.) commercialization of natural flavors using biotechnologies and
fermentation technologies
 Growth Strategies of the Ajinomoto Group
Case Studies of Growth Driver Advancement “GROW”

Reinforcing the Frozen Foods Business in North America through M&A Commercialization of the Ajinomoto Group’s Proprietary Glutamyl-valyl-glycine
In November 2014, the Ajinomoto Group acquired Windsor Quality Holdings, LP, the top Through years of research on taste and amino acids, the Ajinomoto Group has successfully commercialized kokumi substance
manufacturer of frozen Asian foods in the United States, for approximately ¥84.0 billion. glutamyl-valyl-glycine. Glutamyl-valyl-glycine enhances the five basic tastes that exist in the natural world, which are sweetness,
The Group subsequently launched Ajinomoto Windsor, Inc. in April 2015 in order to bitterness, sourness, saltiness, and umami. In addition, glutamyl-valyl-glycine increases the depth and breadth of flavor, thereby
integrate a North American consumer food business into the Group. With Ajinomoto improving palatability. By incorporating this kokumi substance into consumer products, the Group is working to further improve
Windsor, Inc.’s launch, we are accelerating growth in the region by offering a high-quality its product value.
and delicious lineup of healthy foods from Japan, which is underpinned by the Group’s strong technological capabilities together
with the acquisition of former Windsor Quality Holdings, LP’s marketing techniques (based on thorough knowledge of the U.S.
consumers), nationwide sales capabilities, and production bases covering all nations of the U.S.

Expanding sales and strengthening structure of earnings Search techniques using Adding more fatty texture and juiciness,
receptor responses balancing umami taste together with
improving deliciousness of products/realizing
Safety evaluations
cost reductions
Expanding sales through leveraging Strengthening structure of earnings with
an enhanced customer base the Ajinomoto Group’s production and
Significantly increasing sales of noodles, cooked rice, and development technologies
As kokumi substance is able to enhance tastes
gyoza through leveraging former Windsor Quality Holdings, LP’s Progressing structural reinforcements smoothly by conducting
customer base while reducing the amount of fat, it allows for
Group technological training (IE training,*1 TPM training*2) Food application Amino acids customers to enjoy delicious meals that are
and continuing improvement activities after the training technologies production technology
Solid sales of Yakisoba and Yakitori also low in fat. As such, this kokumi substance
Chicken Fried Rice *1 IE training: Industrial Engineering (improvement) helps provide healthy foods to customers.
*2 TPM training: Total Productive Maintenance (facility maintenance)

30 31
Selling the former Ajinomoto Frozen Foods
Ajinomoto Group

Integrated Report 2016

Co., Inc.’s gyoza through the channels of
former Windsor Quality Holdings, LP at What is glutamyl-valyl-glycine? Product development (examples)
206 outlets
Glutamic acid + Valine + Glycine

• Glutamyl-valyl-glycine is a tripeptide combining three amino acids

that exist naturally in scallops, authentically brewed soy sauce, fish
sauce, and other foods.
• Glutamyl-valyl-glycine enhances basic tastes.
• Glutamyl-valyl-glycine increases the depth and breadth of flavor, and
Reinforcing the development and
improves palatability.
production bases for frozen noodles
and frozen rice Reinforcing the production base
Established Ajinomoto Toyo Frozen Noodles for frozen rice Having confirmed the enhancement/improvement of flavor and
Inc. through a joint venture with Toyo Suisan taste of extracts, milk, fats and oils, spices, etc.
Kaisha, Ltd. New production line at Oakland Plant

• April 2015 Expanding production capacity and building an

efficient supply system
• September 2015: Start of construction
Built a frozen noodle plant • August 2016: Completion of construction Safety of Glutamyl-valyl-glycine
• June 2015: Start of construction (scheduled) Glutamyl-valyl-glycine received approval as a food additive from the Ministry of Health, Labour and Welfare of Japan in August
• March 2016: Completion of 2014. In addition, glutamyl-valyl-glycine obtained FEMA-GRAS*1 approval in the United States in February 2010 and received
construction
a “no safety concern” evaluation from JECFA*2 in June 2012. Furthermore, in Europe EFSA*3 concluded that it is safe to use
glutamyl-valyl-glycine as a flavoring, in April 2014.

*1 Generally Recognized As Safe by the Flavor and Extract Manufacturers Association of the U.S.
*2 JECFA: FAO/WHO Joint Expert Committee on Food Additives
(FAO: Food and Agriculture Organization of the United Nations; WHO: World Health Organization)
*3 The European Food Safety Authority is an institution that performs risk evaluations through specialists regarding the various factors that affect food safety within the European
Ajinomoto Toyo Frozen Noodles Inc. Oakland Plant Union. The institution also provides scientific information regarding food safety.

Reinforcing the development and production bases for frozen noodles and cooked rice
 Growth Strategies of the Ajinomoto Group

Further Reinforcement of Business Structure “FIT” Enhance Capital Efficiency to Boost Shareholder Value and ROE
To improve shareholder value and ROE, the Company enhances capital efficiency across all of its businesses through focusing its efforts
Structural Reform Centered on a Shift from Commodities to “Specialty” on a value-added value chain for each business. We are also working to rationalize and improve the efficiency of our business infrastructure,
Through the shift to “Specialty” in our bulk and pharmaceutical businesses, the Ajinomoto Group is working to enhance the added value of such as production and distribution.
its business while making internal improvements by bolstering cost competitiveness. We are also promoting cost reductions by improving
the performance of resource-saving fermentation.
Optimize business portfolio and
Focus on a value-added value chain/Cash management functional value chain

Focus on a value-added value chain Production

Bulk Businesses Pharmaceuticals
Internalize core value chain and flexibly outsource • Build an optimized global production system
Umami seasonings for processed production • Reorganize functions and redeploy personnel at
Animal nutrition food manufacturers/Sweeteners domestic factories
Example of value chain management by business
• Increase in weight for “specialty” • Create new specialty materials • Strengthen the pipeline with proactive
(Food products/MSG)
materials such as AjiPro®-L such as new taste substances, licensing-in, collaboration, etc.
• Strengthen retail product value chain
rumen-protected lysine for dairy cows ultra-sweeteners, etc. – Field of digestive disorders, etc. Strengthen
(ruminant animals, marine products, • Expand retail product applications, from development to production
etc.) mainly overseas in each region Distribution
- Prioritize investment of management • Offer custom-order plans tailored
Shift to resources such as R&D in “Specialty” to customers • Promote greater efficiency and environmental protection
(Animal nutrition)
specialty and growth businesses by looking for coordination of distribution in the industry
businesses • Deal flexibly with materials production,
• Capture customers by establishing Balance – Toward distribution system that is No. 1 in reliability
including outsourcing in line with strategy
new integrated service solution in the food products industry
32 33
models with further nutritional
Ajinomoto Group

Integrated Report 2016

improvement and physiology
functions (Sweeteners)
• Optimize scale of production of
Optimize aspartame
Business support functions

• Lower costs with fermentation using fewer resources by leading edge biotechnologies • Cut fi xed costs in line with business • Strengthen functions and increase efficiency of shared
– E.g., Fermentation processes, development of bacteria scale services and indirect operations to achieve a robust HQ
Strengthen • Curtail fi xed costs by increasing production with low investment – Build a new structure by – Strengthen functions of the Group management
cost • Optimize production value chain (outsource production, etc.) reorganizing the functions for Optimize SKUs
foundation by giving HQ functions a global reach
competitive- continuous growth and rightsizing
• Reduce inventory – Concentrate shared services in Japan and improve
ness the organization and personnel
• Cut back on low-profit SKUs efficiency, etc.

In order to secure more efficient and stable distribution capabilities

and pursue social and economic rationality throughout the distribution
Case Study: Launched the gastrointestinal specialty pharma EA
infrastructure of the entire food industry, six food manufacturers* in
“Cost Reductions through Resource- Pharma Co., Ltd., which possesses a full value chain, Japan have agreed on the establishment of “F-LINE,” a food
in April 2016, through integration with the gastrointes- company distribution platform. As of April 2016, collaborative shipping
Saving Fermentation Technology” has commenced in Hokkaido, helping to improve transportation
tinal disease treatment business of Eisai Co., Ltd.
(Please refer to page 34.) efficiency and reduce CO2 emissions.

* Ajinomoto Co., Inc., Kagome Co., Ltd., The Nisshin OilliO Group, Ltd., Nisshin
Foods Inc., House Foods Group Inc., Mizkan Co., Ltd.

Initiatives to improve capital efficiency using business-specific ROA

From fiscal 2015, the Ajinomoto Group has been setting ROA targets for each business. Through Group-wide management of
financial leverage, the Group is promoting initiatives to improve capital efficiency throughout the entire organization. In addition, the Group
has established a system that can track the ROA results of each business on a monthly basis. In these ways, the Group is working
to bolster its financial management.
 Growth Strategies of the Ajinomoto Group
Case Studies of Further Reinforcement of Business Structure “FIT”

Evolution of Management Foundation (Management Innovation)

Cost Reductions through Resource-Saving Fermentation Technology
By promoting improvements in the performance of resource-saving fermentation, the Ajinomoto Group realized ¥3.0 billion in cost Reinforcing a Corporate Governance System Befitting of a “Genuine Global Specialty Company”
reductions for fiscal 2015. The Group plans to further reduce costs by ¥1.0 billion in fiscal 2016. Amid its pursuit of becoming a “Genuine Global Specialty Company,” the Ajinomoto Group is making efforts to strengthen its corporate
governance system befitting of a global top class company. In April 2016, the Group introduced the Global Governance Policy (GGP).
Specific Measures FY2011–2013 FY2014 FY2015 FY2016 Guided by the concept of “Governing HQ” and “Delegated Front,” the GGP works to strengthen Group governance, enhance worksite
mobility and efficiency, and realize rapid growth overseas.
Introduced in Brazil High performance
(FY13/Q1) (Higher reduction rate)
MSG
Rollout to other regions
Global Governance Policy
High performance
(FY15/Q4~)
Technologies to reduce
main raw materials
Introduced in Thailand
Nucleotides
(FY14/Q1)
High performance Improve local decision-making speed to achieve rapid growth overseas
Introduced in Brazil
Feed-use amino acids High performance
(FY13/Q2)

Introduced in the U.S.

High performance
(FY12/Q2)
Shift to management that aims for flexibility and efficiency
Introduced in Thailand
MSG High performance
(FY13/Q4)
Management/Corporate (Governing HQ) • Expand delegation of authority
Rollout to other regions – Target: Regional HQs in ASEAN and Latin America, etc.
Technologies to reduce
sub-raw materials – Authority: New products, acquisition of fixed assets, etc.
and energy Introduced in Brazil Establishment/maturity of
(FY11/Q1) technology • Introduce a reporting system to let local operations
Regional HQs/Businesses/Companies (Delegated Front) run themselves
Feed-use Introduced in the U.S./Europe
34 High performance 35
amino acids (FY13/Q3) (FY13/Q4)
Ajinomoto Group

Integrated Report 2016

Introduced in Europe
High performance
(FY12/Q2)

Use of non-edible materials Feed-use amino acids

Introduced in Brazil
Increase use rate As a platform for the creation of “Governing HQ,” Ajinomoto Co., Inc. reorganized the global functions of its headquarters and established a “Global
(FY11/Q4) Corporate” in April 2016 with the aim of clarifying the role of headquarters from the perspective of Group global management (the second phase of
revisions is scheduled in April 2017).
Partial self-production of main Introduced in Brazil/Vietnam Expand self-production rate in Brazil Introduced in Thailand
MSG
raw materials and energy (FY12/Q1) (FY13/Q4) (FY15/Q1) (FY16/Q1)

Cost reduction effect

Plan: ¥5.5 billion
(Single-year forecast vs. FY2013) ¥5.0 billion Plan: ¥8.0 billion
Actual: ¥4.0 billion Actual: ¥7.0 billion
Exchange rate in FY2014–2016 Medium-Term (FY2011–2013 total) (YoY: ¥1.0 billion)
(YoY: ¥3.0 billion)
Management Plan: JPY 100/USD

Renewable Energy Generates a New “Bio-cycle”

Since 2012, Ajinomoto do Brasil Ind. e Com. de Alimentos Ltda. has been formulating a new bio-cycle at its Laranjal Paulista Plant,
which uses the dry pulpy sugarcane residue (bagasse) generated from the in-house production of fermentation ingredients as fuel
for biomass boilers and those fuel ashes are utilized as co-products. Since June 2015, the plant has doubled the capacity of its
production facilities and has increased its in-house production ratio. In addition, in April 2016, Ajinomoto Co., (Thailand) Ltd.
commenced operations of a new biomass cogeneration system* at the Ayutthaya Factory that uses rice husks as fuel.

At the “Global Management Meeting,” Group companies, both Japan and overseas, convened to discuss management strategy.

Ajinomoto do Brasil Ind. e Com. de Ajinomoto Co. (Thailand)

Alimentos Ltda., Laranjal Paulista Plant Ayutthaya Factory

* A system that generates and supplies both electricity and heat (steam) from a heat source
 Message from the Chairman of the Board

Review of the Ajinomoto Group’s Governance

Under the FY2014–2016 Medium-Term Management Plan, we have adopted the goal of becoming a
“Genuine Global Specialty Company.” To realize this goal, we are working to reinforce our corporate
governance from a global perspective. In April 2016, we introduced the Global Governance Policy (GGP),
which regulates our global business activities. By clearly positioning our headquarters as “Governing HQ”
and the worksite level as “Delegated Front,” the GGP works to realize more sophisticated decision making
and improve the speed and mobility of that decision making.
Through the introduction of the GGP, we are advancing the delegation of authority in each region of our
global operations. By establishing a structure where decisions can be made at the worksite level, not only
will the role of our headquarters as “Governing HQ” becomes clearer, the role of the Board of Directors,
a core function of our headquarters, will significantly change. In regard to the Board of Directors’ meetings,
we will revise the proceedings of the meeting, the content of the reports, and our time allocation methods,
which will enable us to place more emphasis on discussing management-related challenges, such as
important business strategies. In these ways, we will deepen the Board of Directors’ deliberations on
management going forward.
The Board of Directors currently comprises inside directors, who possess a wide range of expertise in
areas related to our business, from food products to amino acids, and outside directors, who possess
unique expertise in external fields. Our outside directors, in particular, offer us their unrestricted opinions
Masatoshi Ito
on a wide range of subjects, including medium- to long-term growth strategies and the utilization of global
Representative Director, human resources, drawing on their wealth of experience and know-how. I would like the outside directors
Chairman of the Board
to continue to work as representatives of our stakeholders, demonstrating their sound judgment from
36 37
an external position based on a variety of perspectives such as sociality and morality. This, in turn, will
Ajinomoto Group

Integrated Report 2016

lead to the reinforcement of our management oversight functions. As the Board’s chairman, I will focus my
attention on ensuring that these oversight functions are being exercised appropriately. At the same time,
I will work to realize an energetic Board of Directors that operates in a fair and transparent manner in such
ways as encouraging active discussion and interaction among directors, including the outside directors.
Furthermore, I will continue to examine the Board’s design, giving consideration to an appropriate Board
size for the Ajinomoto Group, the balance of inside and outside directors, and directors’ areas of expertise.

Aiming to be a Company that Further Earns the Trust of its Stakeholders

We make determined efforts to share business information with all of our stakeholders, including
shareholders and other investors, business partners, and employees. We will continue to provide careful
explanations of business strategies, from the strategy’s aim to the background of its formulation, in
an explicit and detailed way. We will also disclose information on personnel and labor-related initiatives,
such as the reform of working practices we are currently promoting. In these ways, we will actively share
company aims and information with our stakeholders to deepen their understanding of our business.
Furthermore, we will demonstrate our impact on the world by clearly conveying to society the fact that

By reinforcing and enhancing corporate governance, we are a food company driven by leading edge technologies and built on “Specialty,” unique value that
other companies cannot offer, as well as the fact that we proudly take the initiative to resolve social issues
the Ajinomoto Group aims to realize sustainable growth, through ASV (The Ajinomoto Group Creating Shared Value). In doing so, we aim to be a company that
further earns the trust of its stakeholders.
improve medium- to long-term corporate value, I would like to ask our shareholders and other investors for their continued support going forward.

and become a “Genuine Global Specialty Company.” July 2016

Masatoshi Ito
Representative Director,
Chairman of the Board
 Growth Strategies of the Ajinomoto Group

Basic Philosophy concerning Corporate Governance Corporate Governance Framework

The Ajinomoto Group has passed down the spirit of continually improving people’s nutrition through umami seasonings since its founding.
General Meeting of Shareholders
We are committed to help in the resolution of the issues that are faced by the 21st century human society, most notably global sustainability,
food resources, and healthy living. Our initiatives to create value for society and local communities and in turn transform this value into Appointment / Dismissal Appointment / Dismissal of auditors Appointment / Dismissal of directors

economic value are collectively referred to as ASV (The Ajinomoto Group Creating Shared Value).
Ajinomoto Co., Inc. recognizes that corporate governance represents one of the most important aspects of its management foundation [Auditing] [Management / Supervision]
Auditing
for accelerating its ASV efforts and achieving its vision of becoming a “Genuine Global Specialty Company.” To this end, the entire Board of Corporate Auditors Board of Directors
Ajinomoto Group works as one under the Ajinomoto Group Standards of Business Conduct to reinforce and enhance corporate governance
Standing Corporate Auditors (two) Outside Directors (three) Inside Directors (10)
through engagement and collaboration with stakeholders and through continual efforts in developing and properly implementing its
Determination of Outside Corporate Auditors (three)
internal control system. appointment / Recommendations

(For more details, please refer to the Corporate Governance Policies posted on the Company’s website.) dismissal proposals
Support
Nominating Advisory Committee
Cooperation
Reference Corporate Governance Policies Corporate Auditors’ Office
Compensation Advisory Committee
http://www.ajinomoto.com/en/ir/pdf/Governance_E.pdf

Accounting Auditor

Initiatives to Reinforce Governance Decisions on fundamental management policies

Supervision
Cooperation Delegation of authority

2003 Introduction of executive officer system [Business execution]

Decrease in the number of directors (from 30 to 12)
Appointment of an outside director (one director out of 12 directors) Management Committee
Reporting
Internal Auditing Dept. President & Chief Executive Officer
Reporting / Preliminary review
2004 Appointment of outside corporate auditors (three) Business Conduct Committee Member of the Board & Corporate Executive Deputy President
38 39
Risk Management Committee Member of the Board & Corporate Senior Vice President
Ajinomoto Group

Integrated Report 2016

2005 Establishment of Nominating Advisory Committee and Compensation Advisory Committee
Investment, Loan and Internal control Member of the Board & Corporate Vice President
Business Scrutiny Committee
2009 Increase in the number of outside directors (two out of 15 directors) Risk Delegation of authority / Control
M&A Committee management

2011 Appointment of female outside director (one out of 15 directors)

Corporate Sector Operational Sector
2015 Increase in the number of outside directors (three out of 14 directors) Corporate Executive Officer Corporate Executive Officer

Supervision Supervision
2016 Introduction of evaluation of the Board of Directors’ effectiveness
Introduction of the Global Governance Policy (GGP) Subsidiaries Subsidiaries Subsidiaries
and affiliates and affiliates and affiliates

Board of Corporate Auditors Board of Directors Management Committee

The Board of Corporate Auditors consists of five The Board of Directors consists of 13 directors, The Management Committee consists of nine
Analysis and Evaluation of Board of Directors’ Effectiveness corporate auditors, three of whom are outside three of whom are outside directors. The Board directors who serve concurrently as corporate
Ajinomoto Co., Inc. engages in a wide range of business operations around the world, including foods and amino acids, and one goal of corporate auditors. Ensuring independence from makes decisions on important business matters executive officers. The Committee deliberates on
the Company is to have a Board of Directors that can execute appropriate and agile decision making, as well as carry out its role of the executive officers, the corporate auditors work and supervises the execution of duties by directors basic company management policies and makes
supervising the execution of duties befitting of a “Genuine Global Specialty Company.” together with the accounting auditor and Internal and corporate executive officers. important decisions concerning business
As part of these efforts, directors and corporate auditors were asked to take self-evaluation surveys, while analysis by outside lawyers Auditing Department to conduct audits on the execution.
was also conducted, with the results being examined at the Board of Directors meeting held in May 2016. It was pointed out that execution of duties by directors.
improvements need to be made in communication between inside directors and outside directors, internal information collection of outside
directors, and the efficiency of deliberations by the Board of Directors. Based on these results, the Company continues to examine the best Nominating Advisory Committee Compensation Advisory Committee
possible approaches for the Board of Directors. The Nominating Advisory Committee consists of The Compensation Advisory Committee consists
four directors, including three outside directors. of five directors, including three outside directors.
The Committee receives recommendations from The Committee receives recommendations from
the Board of Directors and deliberates on such the Board of Directors and deliberates on proposals
matters as director nominees and proposals for for director and corporate executive officer
the election of corporate executive officers. The compensation. The results of these deliberations
results of these deliberations are reported to the are reported to the Board of Directors.
Board of Directors.
 Growth Strategies of the Ajinomoto Group

Outside Directors and Outside Corporate Auditors Risk Management

Ajinomoto Co., Inc.’s outside directors and outside corporate auditors have been registered as independent directors/auditors with The Ajinomoto Group established the Risk Management Committee in 2002. Guided by the Ajinomoto Group’s Risk Management Basic
the Tokyo Stock Exchange. For details on standards related to the independence of the Company’s outside directors/auditors, please refer Policy, “By promoting strategic risk management, we make the Ajinomoto Group resilient to risks, and increase the Group’s value,” the
to the Corporate Governance Policies posted on the Company’s website. Group is working to strengthen its capacity to deal with crises, such as accidents or incidents, in the rare event one should occur, while
maintaining the proactive prevention of risks as a basic policy. Furthermore, the Group has established the Subcommittee for Management
Attendance at Risks that functions under the jurisdiction of the Risk Management Committee. In these ways, the Group is engaging in initiatives to
Meetings of the Board
Independent
Name Reasons for Appointment of Directors respond to changes in the macro environment that affect its business as well as to tackle governance-related issues.
Officer
or Board of Corporate
Auditors

To capitalize on her in-depth knowledge and experience concerning international

corporate management and advanced understanding of human resources with a Ajinomoto Group companies

Ajinomoto Co., Inc.’s Management Committee

Sakie T. global mindset, and her experience as an outside director at other prominent listed 20 out of (Liaison: Risk Management Committee secretariat)

Fukushima companies. She will be able to provide various forms of guidance related to the 21 times
Risk Management Committee
management of Ajinomoto Co., Inc. based on her objective perspective, and there is
Reports / Ajinomoto Co., Inc.
no concern a conflict of interest will arise between her and general shareholders. Information sharing /
Instruction plants / branches
Support
Outside Directors

To capitalize on his in-depth knowledge and experience internationally as a diplomat (Liaison: General affairs and HR divisions)
Yasuo 21 out of
for the management of Ajinomoto Co., Inc. and there is no concern a conflict of interest
Saito 21 times
will arise between him and general shareholders. Cooperation / Reporting

To capitalize on his advanced understanding of international business management

developed from his wealth of real-world experience in consulting for non-Japanese
companies, etc., and in-depth knowledge as a professor with the Graduate School of
Takashi 12 out of
International Corporate Strategy at Hitotsubashi University. This will enable him to fulfill Subcommittee for Management Risks
Nawa 15 times
an appropriate role in the supervision of the execution of business operations of Recommendations
40 Ajinomoto Co., Inc. from an independent and fair position. Furthermore, there is no 41
concern a conflict of interest will arise between him and general shareholders.
Ajinomoto Group

Integrated Report 2016

To capitalize on his professional knowledge and wealth of experience as a certified
Masami public accountant both in Japan and internationally, and his expertise in finance and
—
Hashimoto accounting in the execution of his duties as an outside corporate auditor. There is also
no concern a conflict of interest will arise between him and general shareholders. Global Policy Matrix
Outside Corporate Auditors

In order to strengthen its global governance, the Group has created a global policy matrix and put into place important policies and
To capitalize on his professional knowledge and wealth of experience as an attorney,
procedures (P&P), which are managed under the GGP.
Atsushi and his particularly in-depth knowledge of the Companies Act, which can be utilized in
—
Toki the execution of his duties as an outside corporate auditor. There is also no concern a
Business Code of Conduct Legal Fiscal, Trade & Purchasing General & Administration Accounting & Treasury HR & Others
conflict of interest will arise between him and general shareholders.
Information Management
To capitalize on his extensive experience in corporate management both in Japan and
Hiroshi internationally, and his knowledge as the head of a legal department, both of which Environment
Accounting Policy
— Prevention of Insider Trading
Murakami can be utilized in the execution of his duties as an outside corporate auditor. There is Quality Assurance
Compliance with Antitrust Financing Policy
Trade Secret Management Global Tax Policy and
also no concern a conflict of interest will arise between him and general shareholders. and Other Laws Risk Management
Procedure Disaster Prevention,
Foreign Exchange Risk
Group Intellectual Property Occupational Health,
Prevention of Bribes and Business Continuity Management Policy
Exploitation Policy Basic Purchasing Policy and Safety
Other Improper Payments
Basic Policy on Fund
Corporate Brand Logotype Internal Audit
Internal Control Systems Procurement
Investment Profitability
The Ajinomoto Group views the establishment and enhancement of internal control systems as an important management issue. As a
Assessment Criteria
means to verify the operating conditions and effectiveness of its “Basic Policy on the setting up of systems ensuring appropriate business
operations,” the Group evaluates the operations and activities of the Business Conduct Committee, Ajinomoto Co., Inc.’s Internal Auditing
Department, policies and other regulations related to global governance, and the Risk Management Committee. The Group deals with
Global Tax Policy
issues or matters of concern in an appropriate manner and confirms whether or not steps are continuously being taken to make improve-
The Ajinomoto Group commits to comply with tax laws and conducts its business activities in
ments. The results of these evaluations are reported to the Board of Directors. accordance with tax guidelines published by international organizations such as the OECD. In 1. Compliance with Tax Law
order to maximize shareholder value, the Group works to minimize tax risk. Also, with the aim of 2. Minimization of Tax Risk
maximizing its consolidated free cash flow, the Group has established the Global Tax Policy. 3. Maximization of Consolidated Free Cash Flow
Furthermore, the Group does not use contrived or abnormal tax structures that are intended for 4. Part of Business Activities
tax avoidance. In accordance with the spirit of local and international laws, the Group does not 5. Accountability to Shareholders
make use of so-called “tax havens” or any other means to avoid being taxed.
 Growth Strategies of the Ajinomoto Group

Reinforcing Human Resources Befitting of a “Genuine Global Specialty Company”

The Ajinomoto Group has introduced the Global Human Resources Management System to grant opportunities for career development Message from an Outside Director
of over 30,000 employees working worldwide regardless of race, nationality, or gender. Enhancing its diversity, the Group accelerates
its efforts to build the “Solid Talent Pool” (solid base of global human resources), which includes developing “next-stage management
personnel,” appointing locally hired overseas executives, and women to management positions. Aiming for management that
strikes a balance between inside and
Building “Solid Talent Pool”
outside perspectives while constantly
The Ajinomoto Group has formed a group of 200 “next-stage management personnel” (FY2016) to pursue world-class talent diversity
and profit-generating efficiency. conducting oversight from an external
• Establish the diversity management systems through hiring and training global management and local specialist talents
– Ratio of locally hired overseas executives: 50%
viewpoint
– Ratio of female managers: 20%
Improve diversity and work-life balance Sakie T. Fukushima
Outside Director
President and Representative Director of G&S Global Advisors Inc.

Achievement of continuous self-development Contribution to society Increasing Opportunities for Communication and sense defies common sense when seen from outside the
Granting opportunities for growth Steady achievement of performance and Strengthening Supervisory Functions company. I have provided consulting services to a wide range
that are not dependent on seniority our organizational mission
Ajinomoto Co., Inc. has adopted the Auditor System, and I believe of companies for over 30 years and have worked as an
Clarification of jobs = Company growth = Realization of
Clarification of development objectives “Genuine Global Specialty Company”
that the system is functioning effectively. The corporate auditors outside director at nine different Japanese companies.
Simultaneous strictly evaluate the business execution of directors through audits Through my experiences, I have come to realize that, because
achievement of individual
and company growth
and share their observations with the outside directors. The outside there are very few CEOs of Japanese companies who have
42 directors then make strategic decisions taking the observations worked in other companies, it is important for outside directors 43
of the corporate auditors into consideration. In this way, the to introduce benchmarks from other companies. For my role
Ajinomoto Group

Integrated Report 2016

New Global Human Resources Management Company’s governance is able to cover both “defensive” and as an outside director, I recognize the importance of conducting
“offensive” roles. In addition, the Board meetings have an oversight from the perspective of shareholders, who are investors
Talent management atmosphere that allows outside directors to express our opinions in the company, in order to maximize corporate value.
Position management Identify and deploy the right talent; freely. I feel that the Company is receptive to incorporating our
Clarify job role and define requirements Promote key talent quickly; opinions, and a PDCA cycle of proper corporate governance is Valuing the Importance of Motivated Human Capital in
for each job to achieve the business strategy Assign the right talent to the right position in place. Governance
However, while this is an issue common among Japanese Ajinomoto Co., Inc. aspires to become a “Genuine Global
companies, inside directors have a tendency not to express Specialty Company” and is working to improve its corporate value
their views sufficiently. The opinions of those responsible for centered on ASV. To achieve such aspirations, it is important to
Promoting “The Ajinomoto Group Way” business execution are extremely valuable information for us in formulate a strategy and to have a system and organization in
making decisions. Therefore, I would like to better supervise place that can realize that strategy. In particular I emphasize the
the Company by further increasing opportunities to exchange importance of human capital. Ajinomoto Co., Inc. is a company
opinions with inside directors. that values its employees, and I have the impression that its
employees enjoy working for the Company. With further
The Ajinomoto Group carries out the “Ajinomoto Global & Group
Introducing Outside Benchmarks globalization, diversity management, which establishes a
Leader Seminar” (GGLS) targeting deputy general managers of
head office business divisions as well as executives and deputy In the past several years, the governance of Japanese structure where human capital of various nationalities and
general managers of affiliated companies worldwide. The seminar companies has changed significantly. While institutional design backgrounds can leverage their individual strengths and
aims to develop global human resources through action learning
and the appropriate implementation of that design are both produce results, is becoming increasingly valuable. A person’s
about global business issues.
critical for effective governance, as of May 2015, a company gender and nationality represent only a part of that person’s
can choose from three different institutional designs, one of individuality, not its entirety. Instead of making judgments based
To become a company where diverse talents leverage their capabilities and potentials, Ajinomoto Co., Inc. is striving toward establishing a global working
standards assuring seven-hour workday, as a part of zero-based “work style innovation.”
which is the Auditor System.* Furthermore, with the introduction on categories such as women, I believe that it is necessary for
of Japan’s Corporate Governance Code, Japanese companies the entire Ajinomoto Group to accurately assess the aptitude of
Roadmap (Ajinomoto Co., Inc.)
as a whole have been making serious efforts to strengthen the each of its employees and foster and deploy them in a way in
FY2014 FY2015 FY2017 FY2020
20-minute reduction 15-minute reduction implementation of governance as well. One of the purposes of which their abilities can be optimally utilized. At the same time,
(Actual) (Actual) (Target) (Vision)
these changes is to establish governance that overseas investors I feel there is a need for the Company to establish a global
Regular working hours (daily) 7 hrs. 35 min. 7 hrs. 35 min. 7 hrs. 15 min. 7 hours can clearly understand. The role of outside directors has also system for employee evaluation and remuneration.
Average working hours (yearly) 1,974 hrs. 1,947 hrs. 1,850 hrs. Under 1,800 hours changed significantly as a result of these institutional design * Japanese companies now have the option of choosing one of three corporate
governance systems: Committee System, Audit Committee System, and
changes. What I place particular importance on as an outside
Auditor System. The Auditor System has corporate auditors who audit the
director is to introduce outside benchmarks to avoid the situa- performance of the Board of Directors.
tion where what internal management considers common
 Directors, Corporate Auditors, and Corporate Executive Officers

Directors

Masatoshi Ito Takaaki Nishii Hiromichi Ono Takeshi Kimura

Representative Director, Representative Director, Member of the Board & Corporate Vice President Member of the Board & Corporate Vice President
Chairman of the Board President & Chief Executive Officer Finance & Accounting; Group Procurement Center Management of R&D; Intellectual Property; Institute
for Innovation; Quality Assurance & External
Scientific Affairs

44 45
Ajinomoto Group

Integrated Report 2016

Tamotsu Iwamoto Koji Igarashi Masaya Tochio Makoto Murabayashi
Representative Director, Member of the Board & Member of the Board & Corporate Senior Member of the Board & Corporate Vice President Member of the Board & Corporate Vice President
Corporate Executive Deputy President Vice President Corporate Planning; CSR Business Strategy and Development
Internal Auditing; Secretarial Office; General Affairs & Management of Technology & Production;
Risk Management; Legal; Public Communications; Information System Planning
Global Communications; Global Human Resources
Management; Human Resources

Etsuhiro Takato Hiroshi Fukushi Sakie T. Fukushima Yasuo Saito Takashi Nawa
Member of the Board & Corporate Senior Member of the Board & Corporate Senior Outside Director Outside Director Outside Director
Vice President Vice President
General Manager, Food Products Division; Logistics General Manager, AminoScience Division
Planning; Advertising
 Directors, Corporate Auditors, and Corporate Executive Officers

Standing Corporate Auditors

Yoichiro Togashi
Shizuo Tanaka

Outside Corporate Auditors

Masami Hashimoto (Certified Public Accountant)

Atsushi Toki (Attorney-at-law)
Hiroshi Murakami

Corporate Vice Presidents

Toshihisa Kato (General Manager, Institute for Innovation)

Kazuya Onomichi (General Manager, R&D Planning Dept.)
Shunichi Komatsu (General Manager, Europe & Africa Division)
Chiaki Nosaka (General Manager, Institute of Food Sciences and Technologies)
Overview by Segment
46 47

Haruo Kurata (General Manager, North America Division) The Ajinomoto Group develops its business in four segments: Japan Food Products,
Ajinomoto Group

Integrated Report 2016

Hiroyuki Kojima (General Manager, Research Institute for Bioscience Products & Fine Chemicals) International Food Products, Life Support, and Healthcare. This section provides the conditions
Hideki Takeuchi (Deputy General Manager, Food Products Division) of each segment in fiscal 2015.
Kaoru Kurashima (General Manager, ASEAN Division)

Corporate Executive Officers CONTENTS

48 Fiscal 2015 Consolidated Operating Highlights
Alain Vrillon George Gwinnett Bompas
(President, AJINOMOTO FOODS EUROPE S.A.S.) (General Manager, Pharmaceutical Custom Manufacturing 49 Overview by Segment
Dept.)
Masaya Sugimori
(General Manager, China Division) Masayoshi Kurosaki
(Deputy General Manager, Food Products Division)
Yoshimasa Yoshimiya
(General Manager, Human Resources Dept.) Jiro Sakamoto
(General Manager, Technology Development Center,
Eiji Majima
Institute of Food Sciences and Technologies)
(Deputy President, AJINOMOTO EUROPE S.A.S.)
Chika Morishima
Hiroshi Motoyama
(General Manager, Consumer Foods & Seasonings Dept.)
(General Manager, Food Ingredients Dept.)
Koji Tamura
Masahiro Tani
(General Manager, Production & Technology Administration
(General Manager, Food Production & Technology
Center)
Administration Center)
Takayuki Koda
Taro Fujie
(General Manager, Production Management Dept.)
(General Manager, Latin America Division)
Narutoshi Fukase
Daniel Bercovici
(General Manager, Tokyo Branch)
(President, AJINOMOTO EUROLYSINE S.A.S.)
 Fiscal 2015 Consolidated Operating Highlights Overview by Segment

Net Sales Operating Income

Japan Food Products

¥ 1,185.9 billion ¥ 91.0 billion Business

Strengths
• Brand power backed by over 100 years of history
• Product development and marketing capabilities

Net Sales and Operating Income / Operating Income Margin Trends

By Segment
(Based on business segments applied from FY2016)

Net Sales Operating Income / Operating Income Margin

Other Business Other Business Billions of yen Billions of yen %
¥54.4 billion ¥0.4 billion 500 50 10
411.8 8.2 8.5
397.0
Japan Food Healthcare Japan Food 400 40
7.7
8
Healthcare 35.2
5% Products ¥5.4 billion Products
¥130.8 billion 1% 291.9 30.6
300 30 6
¥394.4 billion 6% ¥31.3 billion 24.0
11%
200 20 4
Life Support 13%
33% ¥11.8 billion 100 10 2
34%
12% 0 0 0
Operating FY2014 FY2015 FY2016 FY2014 FY2015 FY2016
Net sales (Forecast) (Forecast)
income Operating Income Operating Income Margin

48 49
Seasonings and processed foods
Ajinomoto Group

Integrated Report 2016

46% Sales rose for household seasonings and processed foods, reflecting increased sales of Knorr® Cup
39%
Life Support Soup due mainly to a sales strategy that worked to stimulate demand throughout the fiscal year.
¥142.4 billion Sales increased for restaurant and institutional use, as a result of efforts to strengthen proposals

International Food Products International Food Products for solutions that leverage functional food products, which enhance the texture and quality of rice
¥463.9 billion ¥41.9 billion and meat while maintaining their deliciousness.

Frozen foods
By Geographical Area By pursuing the value that consumers desire in fried rice dishes, THE CHA-HAN, which draws on
the deliciousness of fat and the Ajinomoto Group’s proprietary kokumi substances, became a
major hit.
Europe Europe
¥108.8 billion ¥3.4 billion
Coffee products
Japan Japan Ajinomoto General Foods, Inc. was incorporated into the scope of consolidation. In addition,
Americas ¥556.6 billion Americas ¥38.4 billion
4% the Ajinomoto Group accelerated the pace for synergy generation, including the fusions of technologies
¥245.9 billion 9% ¥11.7 billion
in the Company’s R&D activities as well as marketing collaborations and joint purchasing in Japan.
13%

21% Sales Ratio by Business

Operating FY2014 FY2015
Net sales 47%
income 42%

Coffee
Frozen products
41% foods Seasonings Seasonings
25% and
23% 32% and
processed processed
foods Frozen foods
Asia 68% foods 51%
Incorporating Ajinomoto General Foods, Inc.
¥37.4 billion 24%
into the scope of consolidation
Asia
¥274.5 billion
 Overview by Segment

International Food Products Life Support

Business • Well-established global systems for development, production, Business • World-class fermentation technologies
Strengths and sales Strengths • World’s largest global network for animal nutrition
• Product development and marketing capabilities • Extremely safe material development capabilities and
• Overseas business infrastructure compound evaluation technologies

Net Sales and Operating Income / Operating Income Margin Trends Net Sales and Operating Income / Operating Income Margin Trends
(Based on business segments applied from FY2016) (Based on business segments applied from FY2016)

Net Sales Operating Income / Operating Income Margin Net Sales Operating Income / Operating Income Margin
Billions of yen Billions of yen % Billions of yen Billions of yen %
600 60 12 200 20 12
497.7 9.7
500 463.9 466.8 50 9.3 10 149.1
9.0 8.8 142.4 145.2 8.2
8.3 150 15 8.0 9
384.1 46.5 14.5
400 40 41.9 41.4 8
31.9 11.8
300 30 6 100 10 11.7 6

200 20 4
50 5 3
100 10 2

0 0 0 0 0 0
FY2014 FY2015 FY2016 FY2016 FY2014 FY2015 FY2016 FY2016 FY2014 FY2015 FY2016 FY2014 FY2015 FY2016
(Forecast) (Forecast) (Forecast) (Forecast) (Forecast) (Forecast)
Operating Income Operating Income Margin Operating Income Operating Income Margin
* Excluding exchange * Excluding exchange
rate effects rate effects

50 51
Seasonings and processed foods Animal nutrition
Ajinomoto Group

Integrated Report 2016

Supported by strong sales of umami seasoning AJI-NO-MOTO® as well as double-digit sales of Despite increased sales for specialty products, sales prices were significantly lower compared
flavor seasonings and menu-specific seasonings based in local currencies, sales of seasonings to the previous fiscal year, and overall sales declined due to poor market conditions for Lysine,
and processed foods increased, primarily in the “Five Stars.” Threonine, and Tryptophan.
With the establishment of Myanmar Ajinomoto Foods Co., Ltd. in February 2016, the Company
moved forward with preparations to restart its business in Myanmar, where business activities Specialty chemicals
have been suspended since April 2000. Despite a strong performance of electronic materials for servers and special-purpose ICs,
sales of build-up film for CPUs of computers were down due to a sluggish computer market.
Frozen foods As a result, overall sales declined.
In addition to incorporating Ajinomoto Windsor, Inc. into the scope of consolidation, the Company Sales of the personal care products, JINO® increased as the Company acquired new customers
worked to enhance its portfolio of Asian/Ethnic food products and reinforce its earnings structure through a renewal of the trial set and concentrated investments in advertising.
by leveraging the customer base of Ajinomoto Windsor, Inc. and improving productivity in Sales of cosmetic ingredients were in good shape, primarily in Japan, Europe, and East Asia.
collaboration with the Ajinomoto Group.

Sales Ratio by Geographical Area (International Seasonings / Processed Foods and International Frozen Foods) Trend of “Specialty” Ratio of Animal Nutrition (Operating Income Margin Base)
%
FY2014 FY2015 100

Europe Europe
6% South 4% 80 40
America 50
South America 68 65
9% 60
13%
North America North
10% Asia America Asia 40

Note: The former

71% 27% 60%
60
50
Windsor Quality 20
32 35
Holdings, LP was Incorporating Ajinomoto Windsor, Inc. Commodity (Lysine, Threonine, and Tryptophan)
within the scope of into the scope of consolidation Specialty
0
consolidation for FY2014 FY2015 FY2016 (Forecast) FY2020 (Vision)
only two months.
 Overview by Segment

Healthcare
Business • Stable supply capacity as the world’s largest manufacturer of amino acids
Strengths • World-class fermentation technologies
• Abundant amount of knowledge and research technology related to
amino acid function

Net Sales and Operating Income / Operating Income Margin Trends

(Based on business segments applied from FY2016)

Net Sales Operating Income / Operating Income Margin

Billions of yen Billions of yen %
120 7 7
6.2
5.9
98.0 6 6
100 89.5
5.6 5.8
78.3 5 5
80
4 4
60
3 3
40 1.9
2 2
20 1.4
1 1

0 0 0
FY2014 FY2015 FY2016 FY2014 FY2015 FY2016

Financial Section
(Forecast) (Forecast)
Operating Income Operating Income Margin

52 53
Amino acids This section provides financial information for the fiscal year ended March 31, 2016.
Ajinomoto Group

Integrated Report 2016

Sales of amino acids for pharmaceuticals and foods increased mainly due to the positive impact of
exchange rates for overseas sales although the domestic sales decreased. The Pharmaceutical
Custom Manufacturing business recorded a significant increase in sales, derived from solid sales in
Europe, North America, and Japan.

Pharmaceuticals
While there was fierce competition from generics and other competing products, sales of self-distributed
products were almost at the level of the previous fiscal year, and sales of products sold through
business tie-ups increased. However, overall sales declined due to such factors as decreased CONTENTS
royalty income. 54 Message from the Corporate Vice President
in Charge of Finance
Others
Ajinomoto Co., Ltd. launched Glyna®, the first “Foods with Functional Claims” product in the domain 56 Ten-Year Summary of Selected Financial Data
of sleep supplements, and Amino Aile®, the first “Foods with Functional Claims” product in the domain
of supplements to support muscle preservation, in August 2015 and April 2016, respectively. Through
aggressive marketing activities that leveraged a new food labeling system that indicates functional claims,
overall sales in other business rose significantly.

Changes in the “Specialty” Domain of the Healthcare Segment (Image of Sales Composition)
Now Vision for 2020
Bioscience
Food (Cell culture media)
Products
Food
Specialty
Products

Infusions
Pharmaceuticals
Bioscience
(Cell culture media)
Infusions
Pharmaceuticals
 Message from the Corporate Vice President in Charge of Finance

Response to Exchange Rate Risks thoroughly examining the content of the project, we also clearly
The Ajinomoto Group’s overseas business accounts for more than identified issues to be overcome after carrying out the investment,
50% of net sales and nearly 60% of operating income. While we thereby allowing us to promptly implement strategies after the
cannot ignore country risk due to the fact that a large percentage business integration.
of our business is in emerging countries, we have to continue to In order to realize these kinds of constructive M&A, the effective
be extremely cautious about the risk of fluctuations in exchange and stable procurement of the necessary investment funds for
rates and prices of raw materials and fuel. global growth is absolutely essential. As such, we place emphasis
To respond to these risks, the Company has adopted four on maintaining a sound financial structure and work to preserve a
Hiromichi Ono measures: implementing local production for local consumption, high credit rating. By controlling interest-bearing debt with a focus
Member of the Board & utilizing resource-saving fermentation technologies, conducting on the D/E ratio, we aim to raise funds in a flexible manner. In
Corporate Vice President Group-wide risk management, and maintaining a balanced addition, we are taking initiatives to downsize the balance sheet,
possession of different kinds of currency, in addition to various including inventories, as well as improve asset efficiency.
other measures. In our local production for local consumption Going forward, we will accelerate the pace for further growth
policy, we have established production bases in high-demand geared toward 2020 by prioritizing investments into growth fields,
countries and use local materials, thereby hedging the risk of including capital investments, to develop specialty products and
exchange rate fluctuations. For example, in Brazil, one of the improve productivity.
“Five Stars” countries, while we leverage the country’s cheap
currency, as well as procure raw materials there at a low cost to Transition to IFRS
supply seasonings and amino acids to regions such as North From the fiscal 2016 year-end, the Ajinomoto Group aims to
America and Japan, we are working to minimize the risk of exchange adopt the International Financial Reporting Standards (IFRS)
54 55
rate fluctuations by strategically cultivating a wealth of domestic in replacement of Japanese GAAP. As we aspire to become a
Ajinomoto Group

Integrated Report 2016

demand and increasing the percentage of local production for global top 10 class food company, the IFRS will help facilitate
The Ajinomoto Group is steadily working toward its targets for fiscal 2016, local consumption. As for resource-saving technologies, we are international comparison of financial information, which in turn
ending March 31, 2017, based on the roadmap for becoming a “Genuine Global reaping the benefits of lower costs offered by these technologies will encourage communication with our stakeholders.
through reduced fuel consumption and an improvement in Regarding changes that will accompany this transition, we
Specialty Company” laid out in its FY2014–2016 Medium-Term Management Plan. production efficiency. At the same time, these technologies help are anticipating an increase in operating income due to the
to reduce risk simply by lowering the volume of raw materials we discontinuing of amortization of goodwill and other factors. In
deal with. For Group-wide risk management, we have established addition, many items recorded as non-operating revenue and
the “Basic Policy on Risk Related to Foreign Exchange Rates” and non-operating expenses under Japanese GAAP will be included
Business Performance in Fiscal 2015 Japan and overseas, the inclusion of Ajinomoto General Foods, the “Basic Policy on Risk Management for Price Fluctuations in Raw in or subtracted from operating income, which represents an
and Forecast for Fiscal 2016 Inc. (hereafter, “AGF”) into the scope of consolidation, and the Material Procurement” and are ensuring the strict enforcement of important KPI under the IFRS. As such, we forecast significant
Looking back on the business environment in fiscal 2015, ended contributions from Windsor Quality Holdings, LP (hereafter, these policies in such ways as introducing them at subsidiaries. fluctuations in operating income.
March 31, 2016, there was a gradual recovery in the overall global “Windsor”) throughout the year supported our solid business The risk of exchange rate fluctuations cannot be completely At the moment, we are steadily moving forward with
economy, although signs of an economic slowdown appeared in performance as well. eliminated by calculating its impact only based on Japanese yen. preparations for the transition to the IFRS. At the same time,
China and other emerging countries. In the Japanese economy, In fiscal 2016, the last year of the Medium-Term Plan, we forecast Accordingly, we analyze and make reports on our businesses in we are examining our management approach toward operating
despite signs of weakness in exports and production, the net sales of ¥1,186.0 billion and operating income of ¥91.0 billion, each country and region based on the local currency. In this way, income from a wide range of perspectives and giving consideration
employment environment continued to improve and capital both at the same level as fiscal 2015, as we maintain a focus on we are making efforts to have our shareholders and other investors to the kind of communication we should be engaging in with
investment began to pick up. achieving the numerical targets of the Medium-Term Plan. We are understand the way in which we realize organic growth. shareholders and other investors.
Under this environment, net sales increased 17% year on year, also anticipating a stronger yen against foreign currencies
to ¥1,185.9 billion, and operating income rose 22%, to ¥91.0 billion. compared to the previous fiscal year as well as an increase in Approach to Growth Investments for 2020
Such results proved noteworthy, as we achieved record-high both fermentation raw materials and fuel and food product raw The Ajinomoto Group adopts a policy of enhancing its ability to
operating income, in addition to reaching our targets for operating materials. However, our Japan food products, including those of generate cash and preferentially setting aside cash for growth
income in the final year of the FY2014–2016 Medium-Term AGF, will provide a driving force for growth, and we will work to investments. For example, as a basic policy, we discover projects
Management Plan (hereafter, the “Medium-Term Plan”) a year negate the negative impact of a stronger yen and higher raw that could lead to future profit growth on our own and examine the
ahead of schedule. While stable raw material prices and favorable material prices in our overseas business. With “Specialty” as our various possibilities they offer. A prime example of this policy was
exchange rates helped to boost profits, the strong performance of weapon, we will endeavor to reach the numerical targets of the the inclusion of AGF and Windsor in the scope of consolidation.
the food business, including seasonings and processed foods, in Medium-Term Plan as scheduled. In addition to devoting a good deal of time to negotiations and
 Ten-Year Summary of Selected Financial Data
Ajinomoto Co., Inc. and Consolidated Subsidiaries for the Years Ended March 31

(Millions of yen)

FY2015 FY2014 FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006
For the year:
Net sales*1 ¥1,185,980 ¥1,006,630 ¥ 951,359 ¥ 948,705 ¥ 972,648 ¥1,015,215 ¥1,170,876 ¥1,190,371 ¥1,216,572 ¥1,158,510
Cost of sales 768,865 659,509 635,594 600,630 603,420 612,237 785,578 833,123 856,974 828,050
Gross profit 417,115 347,121 315,765 348,076 369,228 402,978 385,298 357,247 359,597 330,459
Selling, general and
326,069 272,601 253,957 276,844 296,644 333,604 321,264 316,420 299,074 266,658
administrative expenses
Operating income 91,045 74,519 61,807 71,232 72,584 69,374 64,034 40,827 60,523 63,800
Non-operating income (expenses),
9,272 4,529 10,754 29,595 (493) (20,929) (19,242) (37,570) (11,216) (15,804)
Extraordinary gains (losses)
Income before income taxes and
100,318 79,049 72,561 100,828 72,091 48,444 44,791 3,256 51,849 55,721
minority interests
Profit attributable to owners
63,592 46,495 42,159 48,373 41,754 30,400 16,646 (10,227) 28,229 30,229
of parent (loss)
Capital expenditures 58,466 50,927 50,602 61,590 56,778 45,772 44,117 58,293 62,780 76,386
Depreciation and amortization 50,920 43,376 45,746 42,463 43,717 49,825 55,382 55,192 55,189 45,138
At year-end:
Shareholders’ equity*2 ¥ 624,245 ¥ 669,576 ¥ 594,950 ¥ 635,287 ¥ 605,349 ¥ 608,191 ¥ 602,769 ¥ 585,234 ¥ 628,325 ¥ 563,446
Total assets 1,263,264 1,255,090 1,093,165 1,091,741 1,097,057 1,077,418 1,082,238 1,057,786 1,100,709 1,061,688
Interest-bearing debt (net) 43,462 43,299 10,538 (67,187) (19,873) (8,410) 50,035 79,832 63,513 69,265
Per share (yen):
56 Net income (loss) ¥ 108.1 ¥ 78.5 ¥ 68.7 ¥ 74.4 ¥ 61.3 ¥ 43.6 ¥ 23.9 ¥ (14.6) ¥ 41.9 ¥ 46.7 57
Net assets *2
1,074.4 1,131.4 1,002.3 1,004.4 894.6 871.6 863.7 838.5 899.4 870.0
Ajinomoto Group

Integrated Report 2016

Cash dividends 28.0 24.0 20.0 18.0 16.0 16.0 16.0 16.0 16.0 15.0
Value indicators:
Liquidity ratios:
Debt/equity ratio (%)*3 15.8 12.8 7.3 (3.2) 2.9 4.4 12.4 16.6 13.3 15.9
Interest coverage ratio (times) *4
57.1 50.4 31.0 45.0 42.7 44.8 28.6 10.5 11.2 19.4
Investment indicators:
Price/earnings ratio (times)*5 23.5 33.5 21.2 19.0 16.9 19.9 38.8 – 24.1 29.0
Price/book value (times)*6 2.4 2.3 1.5 1.4 1.2 1.0 1.1 0.8 1.1 1.6
Return indicators:
Return on assets (%)*7 5.1 4.0 3.9 4.4 3.8 2.8 1.6 (0.9) 2.6 2.9
Return on equity (%)*8 9.8 7.4 7.1 7.8 6.9 5.0 2.8 (1.7) 4.7 5.5
Number of employees 33,295 31,312 27,579 27,518 28,245 28,084 27,215 26,869 25,893 24,733
*1. For the coffee and edible oils business and some other businesses, the gross figures for sales and cost of goods sales were recorded in the accounts but from FY2013
this method changed to netting off sales and cost of goods sold and recording the net figure in the accounts. Post-reclassification basis from the year ended March 31, 2011.
The following changes in accounting policies are conducted in FY2014. Sales promotion discounts paid to customers to expand sales are deducted from net sales.
Figures for FY2011 and subsequent fiscal years have been restated.
*2. Net assets’ equity for the years ended March 31, 2008, 2009, 2010, 2011, 2012, 2013, 2014 and 2015 = Net assets - Minority interests
*3. Debt = Net debt/equity ratio = Interest-bearing debt/Shareholders’ equity (Net debt is interest-bearing debt - Cash on hand and in banks x 75%)
*4. Interest coverage ratio = Net cash provided by operating activities/Interest paid
*5. PER = Year-end share price/Net income per share
*6. PBR = Year-end share price/Shareholders’ equity per share
*7. ROA = Net income (or loss)/Average total assets
*8. ROE = Net income (or loss)/Average total shareholders’ equity
 01
Answering the Needs of Diverse
Lifestyles with Nabe Cube
The Ajinomoto Group is developing products to meet the needs of diverse lifestyles.
Conventional seasonings for hot pot dishes consist primarily of liquid soup seasonings and
bottled concentrates for three to four servings. These seasonings need to be used all at once
and are difficult to carry around due to their weight. For Nabe Cube, however, the same
amount of delicious taste in an approximately 180-gram single serving of the liquid soup
seasoning is condensed into one roughly 7.3-gram single-serving cube (e.g. chicken broth
and umami-salt flavoring).

Concentrating Technologies to Realize One Delicious

and Easy-to-Prepare Cube
A taste and flavor that expand in the mouth and With special ingredients With conventional ingredients only
provide lingering aftertaste Taste and Initial taste rise
flavor strength Lingering aftertaste with
With the use of a new soup stock that strongly enhances flavor
depth and body
even when added in small quantities, in combination with

Special Feature ingredients that provided a deep body and rich flavor complex,
we have realized a new body and depth in a sensation that began
Time
58 the instant the broth entered the mouth, grew rapidly due to the 59
Length of enjoyment
The Ajinomoto Group is working to improve its economic value through the creation of complex and exquisite taste of the selected extracts, then
Ajinomoto Group

Integrated Report 2016

developed and lingered until the broth was swallowed. Time and taste perception
social value. This section introduces the initiatives the Group is taking through its business. The left end of the horizontal axis represents the moment of food entering in
the mouth. The right end of the horizontal axis represents the time until taste
is no longer felt, including aftertaste.

Soft before cubing, strong after cubing

Ingredients that are easily shaped
To attain uniform dispersion of the various ingredients in the cube, into a cube (salt, umami
CONTENTS each ingredient had to exhibit a degree of fluidity as a powder.
seasonings, etc.)
Ingredients that are difficult to
59 Answering the Needs of Diverse Lifestyles Following solidification in the form of a cube, the cube had to shape into a cube (spices,
with Nabe Cube retain its shape and resist crumbling throughout the entire cycle extracts, etc.)
Original ingredients that realize
of handling and distribution. Therefore, the development team rich and complex flavors with only
60 Developing Flavor Seasonings Tailored
established a process control technology that resolved these small amount
to Each Country Substituted materials for spices
mutually conflicting requirements and achieved the necessary and extracts that can be easily
balance in every cube during production. shaped into a cube
61 Promoting the “Ghana Nutrition Improvement Project”

62 Developing Cell Culture Medium for Regenerative

Medicine with World-Class Performance
A cube that quickly melts when broken up
Nabe Cube
64 Making Amino Acid Manufacturing Sustainable
Strong, stable cube solidification leads directly to the problem
with “Bio-cycle”
of slow dissolution. To resolve this problem, the team developed

65 Providing the Foundation for Shifting from a new technology so that the cube would disintegrate from
Commodities to Specialty Businesses with AjiPro®-L the inside by a foaming reaction with water penetrating the cube Ingredient
when the cube is placed in hot water. This end result is the rapidly foaming Cube disintegration by internal
on reaction forces generated by heating
initiated, uniform dissolution of the Nabe Cube. with water
Oil layer
 02 Developing Flavor Seasonings Tailored
to Each Country
The Ajinomoto Group has developed its operations based on local dietary cultures by thoroughly tailoring its products to match the tastes
and preferences of each country for becoming No. 1 in deliciousness. For flavor seasonings in emerging countries, we have pursued
deliciousness by leveraging our abilities to develop technologies such as meat extracts and have set up a robust distribution structure that
centers on direct cash sales of products by local staff.
03
Promoting the “Ghana Nutrition
Improvement Project”
The Ajinomoto Group launched the “Ghana Nutrition Improvement Project” in 2009 as an initiative to
resolve nutrition-related issues, which are spreading across the globe. In Africa, infant malnutrition is a
serious problem that has yet to be resolved. In Ghana, specifically, delayed growth in children is becoming
a major issue due to the lack of nutrition among infants weaned between six months and two years old.
Under the “Ghana Nutrition Improvement Project,” we have developed the amino acid supplement
KOKO Plus, which is added to the traditional Ghanaian baby food “koko,” a corn porridge, to enhance
Deep understanding of local dietary culture
its nutritional balance. In addition to manufacturing KOKO Plus at local food companies in Ghana,
Research on local eating habits through surveys of families and consumers by local employees
we are working together with the Japan International Cooperation Agency, Ghana’s Ministry of
Health, the University of Ghana, and international NGOs to promote the further development, spread, and sale of the supplement.
For sales, we are collaborating with an international NGO that has implemented a program for the support of the self-independence of
Survey of household cooking methods Survey of the preferences of housewives Consumer surveys (interviews, etc.)
Ghanaian women, establishing a sales structure in which an all-female sales staff visits villages throughout the country to sell KOKO Plus.

60 61
Ajinomoto Group

Integrated Report 2016

Technological development capabilities “koko”
“koko”
Product development that caters to local tastes

Thailand Brazil Indonesia Vietnam The Philippines

Ros Dee® Sazón® Masako® Aji-ngon® Ginisa

With its blend of meat extracts Sazón® brand flavor seasoning is Masako® brand flavor seasoning Aji-ngon® brand flavor seasoning Ginisa brand flavor seasoning is
and spices, Ros Dee® brand a mixed powder that blends offers a well-balanced blend of extracts the essence of pork a well-balanced blend of garlic
all-purpose flavor seasoning natural spices and various kinds meat extracts and spices, adding thighbone and the meat itself. and onion used in the stir-fry Distribution model pilot test in Northern Ghana’s rural district. KOKO Plus is distributed to mothers and children by regional saleswomen in 13 communities.
strikes the perfect balance of seasonings in an ideal fashion. a delicious touch to a wide range dishes of Philippine cuisine.
between aroma and taste, of dishes, from soups to
which is an important aspect of stir-fries.
Thai cuisine.

Nutrition in the first 1,000 days determines a child’s growth

In-house production of materials Approximately one-third of infant

Pursuit of further food safety by in-house production of meat extracts as primary materials mortality cases globally are said to be
caused by malnutrition. Malnutrition
and stunted growth during the first
Adequate nutrition
1,000 days—from conception until the
child’s second birthday—increases
the risk of mortality before the age of
Malnutrition
five, and impairs intellectual (Days)

development.
In Ghana, 30%–40% of children aged two years display stunted height, mainly from malnutrition
during weaning from age six months and beyond.
Indonesia Vietnam
04 Developing Cell Culture Medium for Regenerative
Medicine with World-Class Performance
Collaborating with Kyoto University’s Center for iPS Cell Research and Application, Ajinomoto Co., Inc. has successfully developed
StemFit® AK03 in 2014, an iPS and ES cell culture medium with a higher level of safety, free of animal- and human-derived components, which
are typically used in regenerative medicine. Ajinomoto Co., Inc. offers StemFit® AK03 to laboratories and other facilities in Japan and the U.S.
to be used as a cell culture medium for clinical research on regenerative medicine.
In 2015, we successfully developed StemFit® AK02N, a cell culture medium used for basic research with the same composition and
Making Long-Term Cultivation Possible with the Extra-Safe StemFit® AK03N
Combining Ajinomoto Co., Inc.’s research and compounding technologies with the expertise and research
milestones of Kyoto University’s Center for iPS Cell Research and Application, the Company has developed
StemFit® AK03N (a new version of StemFit® AK03, a cell culture medium that allows for the stable, long-term
proliferation of iPS and ES cells). The superior proliferation performance is made possible by compounding
the optimal ratio of necessary growth-promoting substances within the cell culture medium.
As StemFit® AK03N is expected to be used in regenerative medicine, it uses recombinant proteins made
with biotechnology to consist solely of refined substances that are completely free of animal- and human-
derived components.

performance as StemFit® AK03. StemFit® AK02N offers world-class performance as a cell culture medium for iPS and ES cell proliferation and
realizes higher cost performance than the products of other companies in terms of replacement frequency, proliferation rate, and stability. Methods for Cultivating iPS Cells Suitable for Transplants

Conventional method New cultivation method

The Growing Regenerative Medicine Market
Ingredients derived Human growth-promoting
Trillions of yen from humans or animals substances (recombinant
16
15.0 Drug development market proteins, etc.)
Cell/tissue manufacturing market
11.9 Materials market (cell culture medium,
12
reagents, medical devices, etc.)
Equipment market
Conventional cell culture medium StemFit® AK03N cell culture
8
(containing ingredients derived from medium (not containing
5.2 humans or animals) ingredients derived from
62 The regenerative medicine market is humans or animals) 63
4
expected to grow to a size of ¥15
Ajinomoto Group

Integrated Report 2016

1.0 trillion by 2050. Cell culture medium,
0.2
0 reagents, and medical devices make
FY2012 FY2020 FY2030 FY2040 FY2050 iPS cells
up approximately half of this market.
The market size for cell culture medium and reagents
used in regenerative medicine is expected to grow to ¥1 trillion (Survey by Seed Planning, Inc.)

by 2030, ¥2.7 trillion by 2040, and ¥3.5 trillion by 2050.

Mouse cells Scaffold proteins

(feeder cells) (recombinant proteins)
Cell Culture Medium for Regenerative Research Requirements for Cell Culture Medium Used in
Cell culture medium is a nutritional liquid that contains Regenerative Medicine
a healthy balance of the amino acids, sugars, carbohydrates, Issues in the development of cell culture medium for regenerative
vitamins, and minerals necessary for cells to grow. Cell culture medicine that uses iPS cells Combining the Technologies of Ajinomoto Co., Inc. and Kyoto University’s
medium increases the amount of stem cells, such as iPS cells, Issue 1: Developing and providing high-performance cultures that Center for iPS Cell Research and Application
and is used to differentiate transplanted cells and tissue. can be used in regenerative medicine Development of the StemFit® series of AK iPS/ES cell culture medium
Issue 2: Developing and providing safe cell culture medium that
Ajinomoto Co., Inc. Kyoto University’s Center for iPS Cell Research
Human body can be used in clinical research and medical treatment
• Research on amino acid nutrition and and Application (CiRA)
metabolism • Leading edge research related to iPS cells
Areas in which the Company can leverage • Analysis technologies Technological development related to iPS cell creation,
its research on amino acid nutrition and its Amino acid analysis technology: AminoIndex®
proliferation, undifferentiated potency preservation,
experience in developing biotechnologies,
Absorbing nutrients from food Maintaining life • Compounding technologies, nutrient
cell culture medium, and enteral nutrients. storage, and differentiation; evaluation techniques and
that grows development, and manufacturing technologies
analytical research mechanisms
Cell culture Enteral nutrient ELENTAL®, a serum-free cell
Minerals
Swiftly
By pursuing the nutrient compositions and culture medium
Amino acids Vitamins
discovering
Growth-promoting

Cells and tissue

substances growth-promoting substances needed to • Biomass technologies an optimal
used for Fats Sugars breed iPS cells, as well as producing Growth-promoting substance (proteins) organization
transplants optimal cell compositions using safe and production technology CORYNEX®
inexpensive materials, Ajinomoto Co., Inc. is
Cells absorb Cells increase developing cell culture medium for iPS cell
nutrients from the Cell culture medium
cultures that are used in regenerative medicine.
cell culture differentiates cells
medium
05 Making Amino Acid Manufacturing Sustainable
with “Bio-cycle”
Amino acids used in the Ajinomoto Group’s products such as umami seasoning AJI-NO-MOTO® are manufactured at the Group’s 18 amino
acid manufacturing bases located in nine countries throughout Asia, Europe, and the Americas. These amino acids are manufactured
through fermentation using the agricultural materials that are readily available in each particular region, such as sugarcane, cassava, corn,
sugar beets, and wheat. During the manufacturing process, nutritionally rich by-products (co-products) are left behind after the amino
acids are extracted from the fermented raw materials. Nearly 100% of these co-products are used as fertilizers for crops and feed for
06
Providing the Foundation for Shifting
from Commodities to Specialty
Businesses with AjiPro®-L
Amid rising demand for meat products around the world, producing high-quality meat in a more efficient
manner is an issue facing the livestock industry. With over 50 years of experience in the amino acid business
for animal feed, the Ajinomoto Group has led the way in markets around the world through marketing activities
livestock and marine life in local communities. backed by scientific evidence and innovative amino acid production technologies. Currently, the Group is
Through these means, we are contributing to the productivity of local agriculture while realizing the sustainable procurement of expanding its business into the field of animal nutrition.
agricultural raw materials. At the Ajinomoto Group, we call this process a “bio-cycle,” and for over 30 years we have been making
efforts to introduce bio-cycles at all of our fermentation plants across the globe.
Since 2011, we have been selling AjiPro® -L rumen-protected
lysine for dairy cows in North America. Cows are ruminant mammals
Helps reduce CO2 emissions caused by chemical fertilizer production
that have four stomachs. With AjiPro® -L, we have turned our original
Sun
Covers 70% of the chemical fertilizer (nitrogen content) required Chemical fertilizer amino acid processing technology into a product. This technology
for 0.5 million hectares of sugarcane fields allows AjiPro® -L to reach the cow’s intestine without being digested
0.5 million
hectares Absorption of atmospheric
CO2 by photosynthesis in the rumen (cow’s first stomach). AjiPro® -L has received a high
Organic 28 million tonnes level of praise, making it the top brand of lysine for dairy cows in
fertilizer 1.6
million tonnes
Sugarcane fi elds North America. Currently, we are engaging in initiatives geared
Harvest
toward launching AjiPro® -L in Asia, the Middle East, and Oceania.
64 65
Recovering by-product
Cooperative mechanism with local regions In April 2015, we commenced sales of AjiPro® -L in Japan.
Ajinomoto Group

Integrated Report 2016

enabling sustainable production and agriculture
as useful resources
By-product
1.6 million
tonnes
“Bio-cycle” Sugarcane L-Lysine HCI
38 million tonnes AjiPro®-L
Umami seasoning
AJI-NO-MOTO® Small intestine Microorganisms

Rumen
Sugar factory
Products

Umami seasoning Raw sugar

Cane molasses
AJI-NO-MOTO® Nitrogen
(syrup derived from sugarcane) 4.2 million tonnes
content
0.5 million tonnes 1.5 million tonnes
Lysine is broken
Lysine is released from
down by rumen
AjiPro®-L and absorbed
bacteria and rumination
The chart assumes worldwide annual production of approximately 0.5 million tonnes of the umami seasoning AJI-NO-MOTO by the Ajinomoto Group using
®
in the small intestine.
before reaching
only sugarcane. the small intestine.
The values of sugarcane grown and sugar production are commonly used global figures, and the values of resources used for producing AJI-NO-MOTO® and
of by-products are based on actual statistics from the Ajinomoto Group.
AjiPro®-L pellets Dairy cow feed fortified with AjiPro®-L

Feed-Use Amino Acids By adding lysine, which

tends to be lacking in the
feed ingredients, all other
It is common for animal feed to lack Unbalanced Barrel Barrel with Added Lysine
amino acids can be used
efficiently.

be used efficiently
Amino acids that cannot
essential amino acids such as lysine,
Phenylalanine
threonine, and tryptophan. With the + Phenylalanine
+

Methionine + Cysteine
Tyrosine
addition of feed-use amino acids, the Tyrosine

Isoleucine
Valine

Valine

Methionine + Cysteine
Leucine
Tryptophan
other amino acids found in the feed

Threonine
can be used more effectively, which

Isoleucine
Lysine

Leucine
Tryptophan
Threonine
thereby promotes growth in livestock.

Lysine
When animals are given feeds that
are deficient in even one of
the amino acids needed, the body
cannot efficiently use the other
amino acids for its growth.
Important agricultural raw materials in amino acid manufacturing: sugarcane, corn, and cassava Using a co-product to cultivate rice
 Major Subsidiaries and Affiliates
(As of March 31, 2016)

Consolidated subsidiary Affiliated company accounted for by the equity method

Capital Stock Ratio of Voting Capital Stock Ratio of Voting

Company Name Country Major Business Company Name Country Major Business
(Thousands) Rights (%)*1 (Thousands) Rights (%)*1

Japan Ajinomoto (China) Co., Ltd.

China USD 104,108 100.0 Seasonings and Processed Foods
(Special subsidiary company)
Ajinomoto Frozen Foods Co., Inc.
Japan JPY 9,537,650 100.0 Frozen Foods
(Special subsidiary company) Shanghai Ajinomoto Seasoning Co., Ltd. China USD 27,827 100.0 (99.0) Seasonings and Processed Foods

Ajinomoto Pharmaceuticals Co., Ltd. Shanghai Ajinomoto Amino Acid Co., Ltd. China USD 12,000 61.0 (59.0) Amino Acids
Japan JPY 9,145,000 100.0 Pharmaceuticals
(Special subsidiary company)
Xiamen Ajinomoto Life Ideal Foods Co., Ltd. China USD 7,000 51.0 (51.0) Frozen Foods
Knorr Foods Co., Ltd. Japan JPY 4,000,000 100.0 Seasonings and Processed Foods
HENAN AJINOMOTO AMINO ACID CO., LTD. China USD 6,000 100.0 (100.0) Amino Acids
Ajinomoto General Foods, Inc.
Japan JPY 3,862,000 100.0 (5.0) Coffee Products Lianyungang Ajinomoto Frozen Foods
(Special subsidiary company) China USD 5,800 100.0 (100.0) Frozen Foods
Co., Ltd.
GABAN Co., Ltd. Japan JPY 2,827,200 55.4 Seasonings and Processed Foods
Lianyungang Ajinomoto Ruyi Foods Co., Ltd. China USD 5,500 90.0 (90.0) Frozen Foods
AJINOMOTO LOGISTICS CORPORATION Japan JPY 1,930,000 89.4 (0.9) Logistics
Amoy Food Ltd. Hong Kong HKD 148,000 100.0 (30.0) Seasonings and Processed Foods
Ajinomoto Animal Nutrition Group, Inc. Japan JPY 500,000 100.0 Animal Nutrition
Ajinomoto Genexine Co., Ltd. Korea WON 35,700,000 75.0 (75.0) Amino Acids
AJINOMOTO TREASURY MANAGEMENT,
Japan JPY 500,000 100.0 Service, etc.
INC.

J-OIL MILLS, INC. Japan JPY 10,000,000 27.3 Edible Oils The Americas

Ajinomoto Althea, Inc. United States USD 0 100.0 Amino Acids

Asia Ajinomoto Windsor, Inc. United States USD 15,030 100.0 (100.0) Frozen Foods
66 67
Ajinomoto (Malaysia) Berhad Malaysia MYR 60,798 50.1 Seasonings and Processed Foods Ajinomoto Heartland, Inc. United States USD 750 100.0 (100.0) Animal Nutrition
Ajinomoto Group

Integrated Report 2016

GABAN SPICE MANUFACTURING Ajinomoto del Perú S.A. Peru PEN 45,282 99.6 Seasonings and Processed Foods
Malaysia MYR 38,100 100.0 (100.0) Seasonings and Processed Foods
(Malaysia) SDN. BHD.
Seasonings and Processed Foods,
SI AYUTTHAYA REALESTATE CO., LTD. Thailand THB 924,000 100.0 (100.0) Service, etc. Ajinomoto do Brasil Ind. e Com. de Umami Seasonings for Processed
Brazil BRL 913,298 100.0
Alimentos Ltda. (Special subsidiary company) Food Mfrs. and Sweeteners,
Ajinomoto Co., (Thailand) Ltd. Thailand THB 796,362 78.7 (4.5) Seasonings and Processed Foods
Animal Nutrition, Amino Acids
Ajinomoto Betagro Frozen Foods (Thailand)
Thailand THB 764,000 50.0 (50.0) Frozen Foods
Co., Ltd.
Europe
Ajinomoto SEA Regional Headquarters
Thailand THB 715,000 100.0 Service, etc.
Co., Ltd. S.A. Ajinomoto OmniChem N.V. Belgium EUR 21,320 100.0 (0.0) Amino Acids

Fuji Ace Co., Ltd. Thailand THB 500,000 51.0 (51.0) Packaging ZAO AJINOMOTO-GENETIKA
Russia RBL 468,152 100.0 Service, etc.
Research Institute
Ajinomoto Betagro Specialty Foods
Thailand THB 390,000 51.0 (51.0) Frozen Foods
(Thailand) Co., Ltd. AJINOMOTO FOODS EUROPE S.A.S. Umami Seasonings for Processed
France EUR 82,609 100.0 (0.0)
(Special subsidiary company) Food Mfrs. and Sweeteners
Ace Pack (Thailand) Co., Ltd. Thailand THB 277,500 100.0 (94.6) Packaging
AJINOMOTO EUROLYSINE S.A.S.
Ajinomoto Frozen Foods (Thailand) Co., Ltd. Thailand THB 105,000 100.0 (100.0) Frozen Foods France EUR 26,865 100.0 (100.0) Animal Nutrition
(Special subsidiary company)*2
Umami Seasonings for Processed
PT Ajinex International Indonesia USD 44,000 95.0 Ajinomoto Poland Sp. z o.o. Poland PLN 39,510 100.0 (100.0) Seasonings and Processed Foods
Food Mfrs. and Sweeteners
West African Seasoning Co., Ltd. Nigeria NGN 2,623,714 100.0 Seasonings and Processed Foods
PT Ajinomoto Indonesia Indonesia USD 8,000 51.0 Seasonings and Processed Foods
*1 Numbers in parentheses indicate indirect equity ownership.
Ajinomoto Vietnam Co., Ltd. Vietnam USD 50,255 100.0 Seasonings and Processed Foods *2 AJINOMOTO EUROPE S.A.S. owns one share in the company.

AJINOMOTO PHILIPPINES CORPORATION Philippines PHP 665,444 95.0 Seasonings and Processed Foods
 Corporate Data / Stock Information
As of March 31, 2016

Company Name: Ajinomoto Co., Inc. Common Stock Authorized: 1,000,000,000 shares Monthly Stock Price Range and Monthly Trading Volume
Founding: May 20, 1909 Issued: 583,762,654 shares
Paid-in Capital: ¥79,863 million (as of March 31, 2016) Number of Shareholders: 49,925 Stock price / TOPIX (yen / pt)

Number of Employees: 33,295 (Consolidated), 3,477 (Unit) Listing: Tokyo Stock Exchange 3,500

Fiscal Year-end: March 31 (Ticker Code: 2802)

(General meeting of shareholders: June) Shareholder Registrar: Mitsubishi UFJ Trust and
Head Office: 15-1, Kyobashi 1-chome, Chuo-ku, Banking Corporation Stock price
3,000
Tokyo 104-8315, Japan Independent Auditor: Ernst & Young ShinNihon
Tel: +81-3-5250-8111
http://www.ajinomoto.com/en/

2,500

Distribution of Shareholders (By number of shares) Major Shareholders

2,000
Number of Equity
Shares Position
Name of Shareholders (Thousands) (%)
Financial Individuals
The Master Trust Bank of Japan, Ltd.
institutions and others 50,554 8.66
  (trust account) 1,500
48.8% 15.5%
Japan Trustee Services Bank, Ltd.
34,585 5.92
  (trust account)
The Dai-ichi Life Insurance Company, Limited 26,199 4.49 Volume
(Million shares)
NIPPON LIFE INSURANCE COMPANY 25,706 4.40 1,000
FY2015 TOPIX 120
68 The Bank of Tokyo-Mitsubishi UFJ, Ltd. 20,149 3.45 69
Sompo Japan Nipponkoa Insurance Inc. 13,239 2.27
Ajinomoto Group

Integrated Report 2016

Foreign investors
80
28.5% Meiji Yasuda Life Insurance Company 12,624 2.16
Mitsubishi UFJ Trust and Banking Corporation 11,548 1.98 500

Mizuho Bank, Ltd. 10,045 1.72 40

Financial Domestic companies STATE STREET BANK WEST CLIENT

9,133 1.56
instruments 5.2%   - TREATY 505234
0 0
businesses
2.0% FY2010 FY2011 FY2012 FY2013 FY2014 FY2015

Outside Evaluation Website Information

Detailed information (business activities, financial and non-financial data, governance, etc.) is available on the Company’s website.
Inclusion in the SRI Index Highly Regarded Activities

Fiscal 2015
• Dow Jones Sustainability World Index IR Grand Prix Award at the 20th IR Awards
Since 2014, the Company has been selected for
two consecutive years. Minister of the Environment Grand Prize for Sustainable Reporting
Sustainability Report 2015 Sustainability Investor Relations
at the 19th Environmental Communication Awards
Top Prize in the Nikkei Social Initiative Awards by http://www.ajinomoto.com/en/activity/ http://www.ajinomoto.com/en/ir
Ghana Nutrition Improvement Project
newspaper publisher Nihon Keizai Shimbun (Nikkei)
Medium-Term Management Plan
Fiscal 2014 http://www.ajinomoto.com/en/ir/ir_library/
• FTSE4Good Global Index Superior Corporate IR Award at the 19th IR Awards fin_quart.html
Since 2004, the Company has been selected for
Grand Prize for Sustainability Reports (Ministry of the Environment),
13 consecutive years. Sustainability Report 2014
18th Environmental Communication Awards
Corporate Governance Policies
Minister’s Prize (Ministry of the Environment),
HON-DASHI packaging http://www.ajinomoto.com/en/ir/pdf/
Eco-Products Category, 11th Eco-Products Awards
Governance_E.pdf
2014 Environment Minister’s Award for Global Warming
Kyushu Rikisaku Yasai and Kyushu
Prevention Activity
Rikisaku Kudamono project consortium
Implementation of Countermeasures