Ajinomoto Co. Inc. essay

Ajinomoto Ajinomoto Co. Inc. is a Japanese food and chemical corporation which produces seasonings, cooking oils, TV dinners, sweeteners, amino acids and pharmaceuticals. In particular it is the worlds largest producer of aspartame, with a 40% globose market sh be. When Professor Kikunae Ikeda from the University of Tokyo isolated glutamate from the seaweed and discovered its smacking enhancing properties in 1908. The next family, his disco truly was introduced to the market in the form of the flavour enhancer AJI-NO-MOTO.The literal translation of Aji no Moto is Essence of Taste, used as a trademark for the troupes original monosodium glutamate (MSG) product. Thanks to the companys eminent status, its shit has found its way even to notable Asian language dictionaries as a half-synonym for MSG. Ajinomoto (Malaysia) Berhad started its business operations in 1961 as AJI-NO-MOTO monosodium glutamate producer. It is also one of the very first Japanese joint-venture companies to be set up in this country.Ajinomoto (Malaysia) Berhad has since grown into a dynamic food seasoning manufacturer marketing diverse score name that is trusted by Malaysian for decades. Our AJI-NO-MOTO food seasoning is an indispensable item in almost every Malaysian home. Ajinomoto Group Philosophy We realize better lives globally by contributing to significant advances in Food and Health and by working for Life. Ajinomoto Group Way Create New grade Create value with new ideas and continuous innovation based on unique technologies and science. Product value creation bolstered by technology, new dietary proposals) lead up Spirit Continue to constantly take on the challenge of creating new businesses and markets. (Adapt to regional culture and market conditions in creating markets) Social Contribution Accommodate amicable requirements with humility and honesty, with the objective of maximizing value for society through business activities. (Resolve social issues) (Improve the global environment) (Security and safety) (Trustworthy production) (Fair, impartial, transparent and simple) Value PeopleRespect the humanity of all the people convoluted in the Ajinomoto Groups businesses, and be an organisation in which they can grow and display their abilities to the fullest extent. (Provide a workplace where people can flourish) (Career development, support and follow-up) (Fair performance evaluation) (Teamwork) Ajinomoto Group mess We aim to be a group of companies that contributes to human health globally by continually creating unique value to realise customers. 1. To become a global group of food companies centered on the worlds No. seasoning business. 2. To become a global group of amino science companies that contributes to humankind with the worlds No. 1 amino acid technology. 3. To become a group of health-promoting companies with a scientific approach to good taste and health. Ajinomoto(M) Berhad Segment Analysis Ajinomoto (M) Berhad (Ajinomoto) is a food a nd chemical corporation that engaged in manufacturing and selling monosodium and new(prenominal) related products. The company is divided into two major segments that publicly report financial reports.The Umami segment (Umami) comprises of products that are derived from the fermentation litigate such as Monosodium Glutamate (MSG) and related products. The Umami segment accounted for 70. 0% of 2011 gross revenue, making it the largest Ajinomotos operating(a) segments. The Food and Seasoning segment (FSS) consists of products derived from the extraction and mixing process such as Industrial Seasonings, Tumix and related seasonings. This segment accounted for 29. 82% of Ajinomotos sales in 2011. Others segment (Others) products sold by the company comprises of trading goods such as industrial sweetener, feed-use amino acid and frozen foods.The segment accounted for 0. 18% of Ajinomotos sales in 2011. Condensed controversy og Financial Performance 2007-2011 2011 2010 2009 2008 2007 Sales 316,165,220 284,616,880 243,838,799 215,462,459 190,628,976 Net Earning 25,870,244 23,939,091 19,072,212 31,984,464 18,670,013 Total Ajinomoto sales increases over the last past years however its profitability has varied. Sales peaked at over RM316 millions in 2011 and has the lowest sales in 2007 at over RM 190 millions. Ajinomoto has yet incurred profit loss over the last five years. Ajinomotos stock price has been steadily increases from RM1. 95 in 2007 to RM 4. 00 in 2011. in spite of the varied profit earning and steadily increases of sales, Ajinomoto has continued to increase gradually from RM0. 79 in 2007 to RM 0. 15 in 2011.This is a clear indication of the importance that Ajinomoto attaches to the open content associated with dividends with the increase of sales, dividends will continue to increase. Industrial Analysis Bloomberg and Reuters have classified Ajinomoto as food processing industry sector. This paper will demonstrate in details Ajinomotos financial st ability compared with some other companies in the food processing industry. The Malaysia Food Processing persistence The food industry in Malaysia is as wide as the multi-cultures of Malaysia, with wide range of processed foods with Asian taste.The industry is primarily Malaysian-owned, and estimated the present global retail sales in food products are worth around US$3. 5 trillion. It is expected to grow at annual rate of 4. 8 per cent to US$6. 4 trillion in 2020. The industry has more than 9000 processing factories of which 95% are classified as small-scale. Food processing companies are normally perceived as agro-based industries which have a strong backward linkage. However, in Malaysia, this is not the case as it is estimated that over 70% of raw materials used in the processed food are imported.Therefore, Malaysia is a net importer for food products. Value for imported food increase from RM17. 9 billion in 2005 to RM30. 2 billion in 2010, about RM82 million a day. The increa se in 2010 was credited to Malaysias climate, various economic factors, and higher standard of living. Financial Ratio Analysis Financial ratios for Ajinomoto for food industry are provided as below. The firm in food processing industry subset represent 16% of the quantity food industry sales of RM1. 972 billion in 2011. 2011 2010 2009 2008 2007 Ajinomoto Food Industry Ajinomoto Amount Percentages changes Other items of income 2,321,549 4,066,021 (1,744,472) -42. % Items of expenses Changes in inventories of finished goods, 409,346 788,248 (378,902) -48. % work in progress and goods-in-transit Raw materials and case consumed (188,077,870) (162,076,389) (26,001,481) 16. 0% Finished goods purchased (7,780,993) (10,951,068) 3,170,075 -28. 9% Employee benefits expense (33,496,637) (31,147,630) (2,349,007) 7. % wear and tear and amortization (12,753,094) (11,627,019) (1,126,075) 9. 7% Reversal/(impairment) of assets 3,204 (20,360) 23,564 -115. 7% Other o perating expenses (44,848,503) (42,772,605) (2,075,898) 4. % Profit earlier tax 31,942,222 30,876,078 1,066,144 3. 5% Income tax expense (6,071,978) (6,936,987) 865,009 -12. 5% Profit net of tax, represents total 25,870,244 23,939,091 1,931,153 8. % comprehensive income for the financial year Earnings per overlap credited(predicate) to equity holders of the order (sen) Basic 42. 39. 4 3. 2 8. 1% Net dividend per share (sen) 15. 75 15. 00 0. 75 5. 0% Income Statement 2010 Income Statement 2010 2009 adjoin or Decrease During 2010 Amount Percentages changes gross 284,616,880 243,838,799 40,778,081 16. % Other items of income 4,066,021 4,387,766 (321,745) -7. 3% Items of expenses Changes in inventories of finished goods, 788,248 9,219,317 (8,431,069) -91. % work in progress and goods-in-transit Raw materials and packaging consumed (162,076,389) (155,094,975) (6,981,414) 4. 5% Finished goods purchased (10,951,068) (8,061,329) (2,88 9,739) 35. 8% Staff costs (31,147,630) (29,049,802) (2,097,828) 7. % Depreciation and amortisation (11,627,019) (9,534,228) (2,092,791) 22. 0% Impairment of assets (20,360) 399,605 (419,965) -105. 1% Other operating expenses (42,772,605) (30,427,115) (12,345,490) 40. 6% Profit before tax 30,876,078 25,678,038 5,198,040 20. % Income tax expense (6,936,987) (6,605,826) (331,161) 5. 0% Profit for the year 23,939,091 19,072,212 4,866,879 25. 5% Earnings per share attributable to equity holders of the Company (sen) Basic 39. 31. 4 8. 0 25. 5% Net dividend per share (sen) 15. 00 12. 92 2. 08 16. 1% Income Statement 2009 Income Statement 2009 2008 ontogeny or Decrease During 2009 Amount Percentages changes Revenue 243,838,799 215,462,459 28,376,340 13. % Other items of income 4,387,766 17,205,836 (12,818,070) -74. 5% Items of expenses Changes in inventories of finished goods, 9,219,317 (321,473) 9,540,790 -2967. % work in progress and goods-in-trans it Raw materials and packaging consumed (155,094,975) (114,201,038) (40,893,937) 35. 8% Finished goods purchased (8,061,329) (5,025,774) (3,035,555) 60. 4% Staff costs (29,049,802) (27,117,151) (1,932,651) 7. % Depreciation and amortisation (9,534,228) (8,740,933) (793,295) 9. 1% Impairment of assets 399,605 164,220 235,385 143. 3% Other operating expenses (30,427,115) (37,045,175) 6,618,060 -17. 9% Profit before tax 25,678,038 40,380,971 (14,702,933) -36. % Income tax expense (6,605,826) (8,396,507) 1,790,681 -21. 3% Profit for the year 19,072,212 31,984,464 (12,912,252) -40. 4% Earnings per share attributable to equity holders of the Company (sen) Basic 31. 2 34. (3. 2) -9. 3% Net dividend per share (sen) 12. 92 8. 92 4. 00 44. 8% Income Statement 2008 Income Statement 2008 2007 Increase or Decrease During 2008 Amount Percentages changes Revenue 215,462,459 190,628,976 24,833,483 13. % Other items of income 17,205,836 8,044,056 9,161,780 113. 9% Items of expenses Changes in inventories of finished goods, (321,473) (448,494) 127,021 -28. % work in progress and goods-in-transit Raw materials and packaging consumed (114,201,038) (103,743,602) (10,457,436) 10. 1% Finished goods purchased (5,025,774) (4,871,823) (153,951) 3. 2% Staff costs (27,117,151) (25,633,738) (1,483,413) 5. % Depreciation and amortisation (8,740,933) (8,661,427) (79,506) 0. 9% Impairment of assets 164,220 (850,543) 1,014,763 -119. 3% Other operating expenses (37,045,175) (33,433,642) (3,611,533) 10. 8% Profit before tax 40,380,971 21,029,763 19,351,208 92. % Income tax expense (8,396,507) (2,359,750) (6,036,757) 255. 8% Profit for the year 31,984,464 18,670,013 13,314,451 71. 3% Earnings per share attributable to equity holders of the Company (sen) Basic 34. 4 24. 9. 7 39. 3% Net dividend per share (sen) 8. 92 7. 90 1. 02 12. 9% Income Statement 2007 Income Statement 2007 2006 Increase or Decrease During 2007 Amoun t Percentages changes Revenue 190,628,976 170,592,741 20,036,235 10. % Other items of income 8,044,056 1,852,434 6,191,622 77. 0% Items of expenses Changes in inventories of finished goods, (448,494) (2,525,867) 2,077,373 -463. % work in progress and goods-in-transit Raw materials and packaging consumed (103,743,602) (90,491,939) (13,251,663) 12. 8% Finished goods purchased (4,871,823) (5,084,454) 212,631 -4. 4% Staff costs (25,633,738) (24,107,966) (1,525,772) 6. % Depreciation and amortisation (8,661,427) (10,148,276) 1,486,849 -17. 2% Impairment of assets (850,543) (1,145,779) 295,236 -34. 7% Other operating expenses (33,433,642) (32,090,000) (1,343,642) 4. % Profit before tax 21,029,763 6,850,803 14,178,960 67. 4% Income tax expense (2,359,750) (841,246) (1,518,504) 64. 4% Profit for the year 18,670,013 6,009,557 12,660,456 67. % Earnings per share attributable to equity holders of the Company (sen) Basic 24. 7 10. 4 14. 3 57. 9% Net divid end per share (sen) 7. 90 7. 90 0 0% proportionateness Sheet 2011 Balance Sheet 2011 2010 Increase or Decrease During 2011 Amount Percentages changes Assets Non- flowing Assets Property, plant and equipment 104,358,059 102,765,733 1,592,326 1. % Prepaid land lease payments 0 0 0 0. 0% enthronisation in associate 0 0 0 0. 0% Other receivables 843,561 1,061,831 (218,270) -20. % Investment securities 672,685 798,813 (126,128) -15. 8% Other investments 281,000 281,000 0 0. 0% 106,155,305 104,907,377 1,247,928 1. % Current Assets Inventories 62,802,628 52,255,273 10,547,355 20. 2% Trade and other receivables 32,410,933 26,068,630 6,342,303 24. % Derivatives 36,263 0 36,263 exchange and cash equivalents 68,767,151 56,354,967 12,412,184 22. 0% 164,016,975 134,678,870 29,338,105 21. 8% Total assets 270,172,280 239,586,247 30,586,033 12. % Equity and liabilities Current liabilities Retirement benefit obligations 345,271 466,710 ( 121,439) -26. % Trade and other payables 38,238,679 24,617,997 13,620,682 55. 3% Derivatives 2,397 0 2,397 Current tax payable 1,589,523 151,171 1,438,352 951. % 40,175,870 25,235,878 14,939,992 59. 2% Non-current liabilities Retirement benefit obligations 5,756,631 5,295,024 461,607 8. % Deferred tax liabilities 4,051,039 4,939,037 (887,998) -18. 0% 9,807,670 10,234,061 (426,391) -4. 2% Total liabilities 49,983,540 35,469,939 14,513,601 40. 9% Net assets 220,188,740 204,116,308 16,072,432 7. % Equity attributable to equity holders of the company packet capital 60,798,534 60,798,534 0 0. % Share indemnity 4,303,700 4,303,700 0 0. 0% Retained earnings 148,553,371 132,359,068 16,194,303 12. 2% Other reserves 6,533,135 6,655,006 (121,871) -1. 8% Total equity 220,188,740 204,116,308 16,072,432 7. % Total equity and liabilities 270,172,280 239,586,247 30,586,033 12. 8% Balance Sheet 2010 Balance Sheet 2010 2009 Increase or Decrease During 2010 Amount Percentages changes Assets Non-Current Assets Property, plant and equipment 62,661,795 60,798,913 1,862,882 3. 1% Prepaid land lease payments 40,103,938 39,510,974 592,964 1. 5% Investment in associates 0 1,348,751 (1,348,751) -100. 0% Other investments 1,079,813 1,123,377 (43,564) -3. % 103,845,546 102,782,015 1,063,531 1. 0% Current Assets Inventories 52,255,273 46,356,553 5,898,720 12. % Trade and other receivables 27,130,461 30,099,502 (2,969,041) -9. 9% Cash and cash equivalents 56,354,967 43,221,990 13,132,977 30. 4% 135,740,701 119,678,045 16,062,656 13. 4% Total assets 239,586,247 222,460,060 17,126,187 7. % Equity and liabilities Current liabilities Retirement benefit obligations 466,710 320,578 146,132 45. % Trade and other payables 24,617,997 22,857,239 1,760,758 7. 7% Current tax payable 151,171 445,670 (294,499) -66. 1% 25,235,878 23,623,487 1,612,391 6. % Non-current liabilities Retireme nt benefit obligations 5,295,024 5,052,251 242,773 4. % Deferred tax liabilities 4,939,037 4,487,325 451,712 10. 1% 10,234,061 9,539,576 694,485 7. 3% Total liabilities 35,469,939 33,163,063 2,306,876 7. % Equity attributable to equity holders of the company Share capital 60,798,534 60,798,534 0 0. % Share amplitude 4,303,700 4,303,700 0 0. 0% Reserves 139,014,074 124,194,763 14,819,311 11. 9% Total equity 204,116,308 189,296,997 14,819,311 7. 8% Total equity and liabilities 239,586,247 222,460,060 17,126,187 7. 7% Balance Sheet 2009 Balance Sheet 2009 2008 Increase or Decrease During 2009 Amount Percentages changes Assets Non-Current Assets Property, plant and equipment 60,798,913 47,657,260 13,141,653 27. 6% Prepaid land lease payments 39,510,974 40,207,748 (696,774) -1. 7% Investment in associates 1,348,751 1,348,751 0 0. 0% Other investments 1,123,377 1,252,063 (128,686) -10. % 102,782,015 90,465,822 12,316,193 13. 6% Cu rrent Assets Inventories 46,356,553 32,383,255 13,973,298 43. % Trade and other receivables 30,099,502 27,863,680 2,235,822 8. 0% Cash and cash equivalents 43,221,990 66,193,647 (22,971,657) -34. 7% 119,678,045 126,440,582 (6,762,537) -5. 3% Total assets 222,460,060 216,906,404 5,553,656 2. % Equity and liabilities Current liabilities Retirement benefit obligations 320,578 296,972 23,606 7. % Trade and other payables 22,857,239 28,230,809 (5,373,570) -19. 0% Current tax payable 445,670 1,748,521 (1,302,851) -74. 5% 23,623,487 30,276,302 (6,652,815) -22. % Non-current liabilities Retirement benefit obligations 5,052,251 4,461,628 25,697 0. % Deferred tax liabilities 4,487,325 4,088,518 5,451,058 133. 3% 9,539,576 8,550,146 24,612,917 287. 9% Total liabilities 33,163,063 38,826,448 (5,663,385) -14. % Equity attributable to equity holders of the company Share capital 60,798,534 60,798,534 0 0. % Share premium 4,303, 700 4,303,700 0 0. 0% Reserves 124,194,763 112,977,722 11,217,041 9. 9% Total equity 189,296,997 178,079,956 11,217,041 6. 3% Total equity and liabilities 222,460,060 216,906,404 5,553,656 2. 6% Balance Sheet 2008 Balance Sheet 2008 2007 Increase or Decrease During 2008 Amount Percentages changes Assets Non-Current Assets Property, plant and equipment 47,657,260 46,324,751 1,332,509 2. 9% Prepaid land lease payments 40,207,748 23,081,794 17,125,954 74. 2% Investment in associate 1,348,751 1,348,751 0 0. 0% Other investments 1,252,063 1,134,441 117,622 10. 4% 90,465,822 71,889,737 18,576,085 25. % Current Assets Inventories 32,383,255 25,104,026 7,279,229 29. 0% Trade and other receivables 27,863,680 24,590,686 3,272,994 13. 3% Cash and cash equivalents 66,193,647 64,193,072 2,000,575 3. 1% 126,440,582 113,887,784 12,552,798 11. 0% Total assets 216,906,404 185,777,521 31,128,883 16. % Equity and liabilities Current liabilities Retirement benefit obligations 296,972 711,923 (414,951) -58. 3% Trade and other payables 28,230,809 25,619,622 2,611,187 10. 2% Current tax payable 1,748,521 226,829 1,521,692 670. 9% 30,276,302 26,558,374 3,717,928 14. % Non-current liabilities Retirement benefit obligations 4,461,628 3,822,256 266,262 7. 0% Deferred tax liabilities 4,088,518 3,878,168 4,671,978 120. 5% 8,550,146 7,700,424 31,126,024 404. 2% Total liabilities 38,826,448 34,258,798 4,567,650 13. % Equity attributable to equity holders of the company Share capital 60,798,534 60,798,534 0 0. 0% Share premium 4,303,700 4,303,700 0 0. 0% Reserves 112,977,722 86,416,489 26,561,233 30. 7% Total equity 178,079,956 151,518,723 26,561,233 17. 5% Total equity and liabilities 216,906,404 185,777,521 31,128,883 16. 8% Balance Sheet 2007 Balance Sheet 2007 2006 Increase or Decrease During 2007 Amount Percentages changes Assets Non-Current Assets Property, plant and eq uipment 69,406,545 73,405,024 (3,998,479) -5. 4% Investment in associate 1,348,751 1,678,751 (330,000) -19. 7% Other investments 1,134,441 1,234,984 (100,543) -8. 1% 71,889,737 76,318,759 (4,429,022) -5. % Current Assets Inventories 25,104,026 29,511,903 (4,407,877) -14. 9% Trade and other receivables 24,590,686 25,197,271 (606,585) -2. 4% Cash and cash equivalents 64,193,072 30,450,944 33,742,128 110. 8% 113,887,784 85,160,118 28,727,666 33. 7% Total assets 185,777,521 161,478,877 24,298,644 15. % Equity and liabilities Current liabilities Retirement benefit obligations 711,923 444,305 267,618 60. 2% Trade and other payables 25,619,622 15,548,449 10,071,173 64. 8% Current tax payable 226,829 133,929 92,900 69. 4% 26,558,374 16,126,683 10,431,691 64. % Non-current liabilities Retirement benefit obligations 3,822,256 3,663,700 214,468 5. 9% Deferred tax liabilities 3,878,168 4,048,857 3,651,567 90. 2% 7,700,424 7,712,557 26,546 ,241 344. 2% Total liabilities 34,258,798 23,839,240 10,419,558 43. % Equity attributable to equity holders of the company Share capital 60,798,534 60,798,534 0 0. 0% Share premium 4,303,700 4,303,700 0 0. 0% Reserves 86,416,489 72,537,403 13,879,086 19. 1% Total equity 151,518,723 137,639,637 13,879,086 10. 1% Total equity and liabilities 185,777,521 161,478,877 24,298,644 15. % adduce http//www. barubian. net/2012/02/rm92m-spent-on-imported-food-every-day. html http//www. scribd. com/doc/36423986/Food-Industry-Malaysia http//findarticles. com/p/articles/mi_m3723/is_6_15/ai_105043862/ http//thestar. com. my/archives/2006/8/17/IMP3/chapter19. pdf http//www. ifrj. upm. edu. my/19%20(01)%202011/(38)IFRJ-2011-122%20Yodfiatfinda. pdf http//www. mida. gov. my/env3/index. php? page=food-industries http//www. miti. gov. my/cms/content. jsp? id=com. tms. cms. section. Section_63c203a6-c0a8156f-5cff5cff-cbccc275 http//malaysia. ahk. de/fileadmin/ahk_malaysia/Bilder/O thers/Market_Watch_Food_Industry_2011_ENG_. pdf