BACHELOR OF BUSINESS ADMINISTRATION (HONS) FINANCE

(BA242)

FACULTY OF BUSINESS ADMINISTRATION

INTRODUCTION TO CORPORATE FINANCE

(FIN430)

GROUP ASSIGNMENT :

ANALYSIS OF FINANCIAL RATIO FOR TWO YEARS - AJINAMOTO

GROUP:
KBA2422A (GROUP 3)

PREPARED BY:
NAME MATRIC NUMBER
NUR MIRZATHUL BALQIS BINTI MOHD YUSAINI 2021461728
FILZAH NABILAH BINTI JAUHARI 2021839998
NUR AUNI BINTI MUHAMAD RIDZUAN 2021836444

PREPARED FOR:
SIR. MUSTAPA BIN ABDULLAH

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TABLE OF CONTENTS
1. AJINAMOTO BACKGROUND 3

1.1. Post-war Japan and Diversification 4-5

1.2. Expansion Globally 5-6

1.3. Expansion and Restructuring 6-7

2. FINANCIAL RATIO 8

2.1. Liquidity Ratio 8

2.2. Quick Ratio 8

2.3. Activity Ratio 9

2.4. Leverage Ratio 9-10
2.5. Profitability Ratio 11-12

3. FINANCIAL RATIO ANALYSIS 13

3.1. Liquidity Ratio 13

3.2. Activity Ratio 13

3.3. Leverage Ratio 14
3.4. Profitability Ratio 14

4. AJINAMOTO STRATEGIES 15

5. AJINAMOTO INNOVATIONS 16

6. AJINAMOTO INNITIATIVES 17

7. SWOT ANALYSIS FOR AJINAMOTO 18

7.1. Ajinamoto Strength 18

7.2. Ajinamoto Weakness 19

7.3. Ajinamoto Opportunities 20

7.4. Ajinamoto Threats 21

8. REFERENCES 22

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AJINOMOTO BACKGROUND

Ajinomoto Co., Inc. was created in 1908 as a subsidiary of Suzuki Pharmaceutical

Co., Ltd., which was founded in May 1907 by Saburosuke Suzuki II and Kikunae Ikeda.

Ajinomoto was created to let Ikeda, a professor at Tokyo Imperial University,

sell monosodium glutamate (MSG) seasoning made from wheat that he invented and

patented. He created the seasoning after discovering that MSG was the source of a flavour

that he called umami. In April 1909, Ajinomoto presented Ikeda's seasoning under the brand

name "AJI-NO-MOTO" at a new product exhibition event in Tokyo, and began selling the

product the next month. Ajinomoto primarily marketed the seasoning to housewives by using

their trademark, a housewife in an apron, in newspaper advertisements, on signboards, and

on-ground stamps.

Output gradually increased from 4.7 tons in 1910 to 23.3 tons in 1913, with sales

reaching 400,000 yen. In 1914 Ajinomoto built a new factory in Kawasaki to expand its

production of flavouring. Japan's improved economy after World War I resulted in output

hitting 84.6 tons and sales reaching 1,563,000 yen in 1918. Despite rising sales, Ajinomoto

experienced a deficit during its first ten years due to altering its methods of production and

lowering its prices to get its product into ordinary households, among other reasons.

Because of rising Japanese exports after World War I, Ajinomoto opened offices in New

York and Shanghai in 1917 and 1918, respectively. In 1918 Ajinomoto exported 20.5 tons of

its seasoning, accounting for a quarter of its total sales. The company opened new offices in

Singapore and Hong Kong in 1927 and in Taiwan in 1929 to distribute its product throughout

Southeast Asia. Between 1920 and 1929, revenue from the seasoning's sales rose from

2,799 thousand yen to 10,543 thousand yen, largely due to increased exports of the product

to foreign markets.

To lower the cost of mass production, the seasoning's wheat was replaced with

soybeans, as the price of the latter at the time was lower than the former's. In the United

States, the seasoning, labelled by the FDA as a "Vegetable Protein Derivative", sold poorly

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on the consumer market, but Ajinomoto expanded their operations in the United States in

1931 due to mass orders of the seasoning by H.J. Heinz, Co. and Campbell Soup

Co. Between 1931 and 1937, seasoning production increased from 1,077 tons to 3,750 tons,

with revenue rising from 13 million yen to 27 million yen. Due to Japan's increasing

isolationism in the late 1930s, the production of AJI-NO-MOTO decreased from 3,750 tons in

1937 to 2,339 tons in 1940. By 1942, production of the seasoning was reduced to 1,000 tons

before completely stopping by 1944 due to World War II.

1945–1979: Post-war Japan and Diversification

After World War II, Ajinomoto was slow to resume production of its seasoning as it

lacked sufficient funds to continue production and its factory had been destroyed. In April

1946, the company changed its name to Ajinomoto Co., Ltd. In 1947 production of the

seasoning resumed, in addition to the production of new food products such as nucleic acid-

based seasonings and processed foods. In May 1949 Ajinomoto was listed on the Japanese

stock exchange. By 1950, exports accounted for 95% of the company's revenue, with

exports to Southeast Asia, Europe, and the United States increasing in subsequent years. In

Europe, AJI-NO-MOTO was used as a seasoning by many processed food manufacturers,

including Maggie GmbH and C.H. Knorr AG. In 1950, sales in Japan resumed after the lifting

of post-war sales controls, surpassing pre-war sales by 1953.

In the 1960s, Ajinomoto began to diversify its production by securing alliances with

international food companies, including the Kellogg Company in 1962, CPC International

Inc. in 1963, and Best Foods Company Ltd. in 1964. Because of these partnerships,

Ajinomoto began selling Kellogg's corn flakes and Knorr soup in Japan and created its own

brand of mayonnaise. During this time period, Ajinomoto modified AJI-NO-MOTO's recipe by

using amino acids from sugar cane instead of soybeans, which allowed the seasoning to be

produced locally in the countries it was exported to, which reduced shipping costs for the

company. Domestic production first began in Thailand in 1962, followed by the Philippines,

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Malaysia, Peru, Indonesia, and Brazil in subsequent years. By 1979, nearly half of all AJI-

NO-MOTO was being produced outside of Japan.

In the 1970s, Ajinomoto diversified further by launching a flavoured seasoning called

HON-DASHI in 1970 and producing frozen foods in 1972. In 1973s, Ajinomoto and General

Foods Inc. launched Ajinomoto General Foods Inc., a joint venture between the two

companies that would sell instant coffee. In 1978, Ajinomoto launched a brand of Chinese

seasonings under the brand name Cook Do. In Asian and Latin American markets,

Ajinomoto created new products for consumers, while the company primarily delivered its

products to processed food manufacturers in Europe and the United States.

During this era, the company also expanded into other product markets. In 1956s,

the company began supplying crystalline amino acids for pharmaceutical use, contributing to

the world's first release of amino acids infusion. In the 1960s and 1970s, the company

developed feed-use amino acids, pharmaceuticals such as enteral nutrients, and specialty

chemicals.

1980–2009: Expansion Globally

As the Japanese economy worsened in the 1980s, Ajinomoto sought to outsource

more of its production overseas, which increased the number of employees the company

employed overseas from 4,000 in 1979 to more than 11,000 in 1996. Starting in 1980,

Ajinomoto began to refocus its diversification efforts from food products to its amino acid

business. Following the US FDA's re-approval of aspartame in 1981, Ajinomoto began

producing the sweetener at its Tokai factory in 1982. In 1987, Ajinomoto began researching

drug development in the fields of clinical nutrition, anti-cancer drugs, infectious diseases,

and cardiovascular drugs. Through this research, the company developed ELENTAL for use

in clinical nutrition, LIVACT to fight liver disease, and Lentinan in collaboration with the

Japanese Foundation for Cancer Research. Ajinomoto later released JINO as a cosmetic

and amino acid for athletes, followed by Amino Vital, a supplement to JINO released in

1995. In 2000, Ajinomoto acquired NutraSweet and Euro-Aspartame from Monsanto.

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 In April 2002 Ajinomoto reorganized itself into food, amino acid, and medicine

divisions, and owned subsidiaries for frozen foods, fats, and oils. In February 2003,

Ajinomoto and Unilever completed a joint venture agreement in six countries and regions of

Asia. Because of this, Ajinomoto launched the brand VONO to replace its use of the Knorr

brand, and in the process established its own brand identity. In July 2003, Ajinomoto bought

the French company Orsan from the UK-based Tate and Lyle Group, renaming Orsan to

AJI-NO-MOTO Foods, Europe. In November 2005, AJI-NO-MOTO Pharmaceuticals USA,

Inc. was liquidated, and its assets and functions were merged into AJI-NO-MOTO

Pharmaceuticals, Europe. In January 2006, Ajinomoto bought the cooking

sauce and condiments manufacturer Amoy Food from the French dairy product

company Group Danone. In 2009, the company released "Ajinomoto" to commemorate the

100th anniversary of its foundation.

2010: Expansion and Restructuring

In 2010, due to a rise in foreign competition, Ajinomoto began restructuring to focus

on several of its products while divesting others. The company divested its Calpis beverage

unit in Japan in 2012, the Ajinomoto Sweetener Company (France) in October 2015, and

Amoy Food (China) in November 2018. Ajinomoto decided to focus on its food and

biomedical divisions, and acquired the contract manufacturing organization Althea

Technologies (USA) in 2013, the frozen food company Windsor Quality Holdings, Inc. (USA)

in November 2014, and the frozen food company Lavelli ・ Terrell ・ Smile (France) in

November 2017. 

In April 2016, Ajinomoto merged its pharmaceutical division with Eisai, launching EA

Pharmacy in Japan. In October 2017, Ajinomoto introduced a "Global Brand Logo" for use

throughout the Ajinomoto group. In December 2017, Ajinomoto announced it had begun

construction to expand its Kawasaki Plant, along with the construction of a new R&D

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building. In October 2018, Ajinomoto Althea (USA) and OmniChem (Belgium) merged to

form Ajinomoto Bio-Pharmacy Services. In April 2020, the Ajinomoto Group Nutrient Profiling

System for Product, which has been developed as a method to scientifically estimate the

nutritive value of products such as powdered soup and frozen foods, was introduced globally

to about 500 kinds of group products in seven countries. In August, Ajinomoto announced its

participation in the international environment initiative RE100 for renewable energy.

In November 2020, "AJISWEET RA", produced in Japan cooperating with Morita

Kagaku Kogyo Co., Ltd., was newly launched to the USA as stevia sweetener reducing

bitterness and off-flavours. In December, Ajinomoto Group made a wholly owned

supplement company in Ireland by a share purchase agreement with Nualtra Limited in order

to enter Europe's oral nutritional supplements market. In December 2020, Ajinomoto was

included by CDP in its "Climate Change A List for 2020" for the first time, as one of the most

outstanding companies in terms of climate change-related initiatives and information

disclosure for its climate impact.

In February 2021, Ajinomoto Animal Nutrition Group, Inc. resolved to transfer all of

its 100% equity stake in Ajinomoto Animal Nutrition Europe S.A., a European feed-use

amino acid company, to METabolic EXplorer a French company with strengths in research

and development of fermentation technology]. On the Tokyo Nutrition Summit 2021, held on

December 7–8, 2021, Ajinomoto announced its Nutrition Commitment, a specific goal for

improving nutrition, and registered it on the commitment registration website (Global

Nutrition Report) on October 26

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FINANCIAL RATIO - AJINAMOTO

1. LIQUIDITY RATIO :

Current Asset
a) Current Ratio=
Current Liability

RM 391,393,229
Current RatioY 2020=
RM 71,254,089

¿ 5.49׿

RM 331,503,722
Current RatioY 2021=
RM 101,547,417

¿ 3.27׿

2. QUICK RATIO :
Current Asset−Inventories
b ¿ Q uick Ratio=
Current Liabilities

391,393,229−53,729,281
Quick RatioY 2020=
71,254,089

¿ 4.74׿

331,503,722−56,698,168
Quick RatioY 2021=
101,547,417

¿ 2.71׿

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3. ACTIVITY RATIO :

Account Receivables
a) Average Collection Period ( ACP)= × 360
Sales

102,705,699
ACP Y 2020= × 360
461,689,082

= 80.08 days

56,276,691
ACP Y 2021= ×360
443,119,251

= 45.72 days

cost of goods sales

b) Inventory Turnover ¿
inventory
45,288,839
Inventory Turnover Y2020 ¿
53,729,281

= 0.843 times

38,920,150
Inventory Turnover Y2021 ¿
56,698,168

= 0.686 times

Sales
c) Total Asset Turnover ¿
Total Asset

461,689,082
Total Asset Turnover Y2020 ¿
580,449,992

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 = 0.795 times

443,119,251
Total Asset Turnover Y2021¿
727,528,691

= 0.609 times

Sales
d) Fixed Asset Turnover ¿ Asset ¿
Total Net ¿

Net Fixed Asset = (Total Asset− Accumulated Depreciation)

Net Fixed Asset Y2020 = 580,449,992−4,757,705¿

¿ RM 575,692,287

Net Fixed Asset Y2021 ¿ 727,528,691−5,873,706

¿ RM 721,654,985

461,689,082
Fixed Asset Turnover Y2020¿
575,692,287

= 0.802 times

443,119,251
Fixed Asset Turnover Y2021 ¿
721,654,985

= 0.614 times

4. LEVERAGE RATIO :

Total Debt
a) Debt Ratio ¿ × 100
Total Asset

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 84,771,888
Debt Ratio Y2020 = ×100
580,449,992

= 14.61%
215,216,446
Debt Ratio Y2021 = ×100
727,528,691

= 29.58%

Operating Profit
b) Time Interest Earned =
Interest

89,250,714
Time Interest Earned Y2020 =
2,894,308

= 30.837 times

80,069,076
Time Interest Earned Y2021 =
1,661,892

=48.179

5. PROFITABLE RATIO :

Net Profit
a) Net Profit Margin ¿ ×100
Sales

59,853,667
Net Profit Margin Y2020 ¿ ×100
461,689,082

= 12.96%

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 46,502,317
Net Profit Margin Y2021¿ ×100
443,119,251

= 10.49%

Gross Profit
b) Gross Profit Margin ¿ ×100
Sales
( 461,689,082−45,288,839 )
Gross Profit Margin Y2020 = ×100
461,689,082

= 90.19%

( 443,119,251−38,920,150)
Gross Profit Margin Y2021 = ×100
443,119,251

= 91.22%

Operating Profit
c) Operating Profit Margin ¿ ×100
Sales

89,250,714
Operating Profit Margin Y2020 = ×100
461,689,082

= 19.33%

80,069,076
Operating Profit Margin Y2021 = ×100
443,119,251

= 18.07%

Net Profit
d) Return on Asset ¿ × 100
Total Asset

Return on Asset Y2020 = 10.31%

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 Return on Asset Y2021 = 6.39%

Net Profit
e) Return on Equity¿ × 100
Shareholders Equity

Return on Equity Y2020 = 12.08%

Return on Equity Y2021= 9.08%

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FINANCIAL RATIO ANALYSIS

1) LIQUIDITY RATIO

Ratio Year 2020 Year 2021 Comment

Current ratio 5.49 times 3.27 times Year 2020 is better
Quick ratio 4.74 times 2.71 times Year 2020 is better

 The year 2020 is better than the year 2021.

 It means that the year 2020 is more efficient in meeting its current obligations as
compared to the year 2021.

2) ACTIVITY RATIO

Ratio Year 2020 Year 2021 Comment

Average Collection Period ( ACP) 80.08 days 45.72 days Year 2020 is weaker

Inventory Turnover 0.843 times 0.686 times Year 2020 is better

Total Asset Turnover 0.795 times 0.609 times Year 2020 is better
Fixed Asset Turnover 0.802 times 0.614 times Year 2020 is better

 The year 2020 is better than the year 2021

 It means that the year 2020 is more efficient in managing its assets as compared to
the year 2021.

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 3) LEVERAGE RATIO

Ratio Year 2020 Year 2021 Comment

Debt ratio 14.61% 29.58% Year 2020 is better

Time Interest 30.837 times 48.179 times Year 2020 is weaker

Earned

 The year 2020 is on pair with the year 2021.

 It means that the year 2020 is equally efficient in managing its liabilities as compared
to the year 2021.

4) PROFITABILITY RATIO

Ratio Year 2020 Year 2021 Comment

Net Profit Margin 12.96% 10.49% Year 2020 is better

Gross Profit Margin 90.19% 91.22% Year 2020 is weaker

Operating Profit 19.33% 18.07% Year 2020 is better

Margin
Return on Asset 10.31% 6.39% Year 2020 is better
Return on equity 12.08% 9.08% Year 2020 is better

 The year 2020 is better with the year 2021.

 It means that the year 2020 is more efficient in generating income as compared to
the year 2021.

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AJINOMOTO STRATEGIES

The first strategies from Ajinomoto, is profit structure reform which over the six years,

they will focus all management resources on priority companies. The reorganization of non-

priority firms will be completed in Phase 1. They will also look for additional firms. In Phase

2, they will rearrange the selected enterprises in order to rebuild a solid company portfolio.

The second strategies is, They decide to boost health promotion and a unit price rise

strategy which over the next six years, they will pursue flavor that is suitable with lifestyles

and constantly develop their key brands and goods.

In addition, throughout Phase 1, they will invest in the development of a food and

health ecosystem. In Phase 2 of the challenge, create a new business model for personal

health based on their plan. The third strategy is when Human resource and organizational

management reform to enhance productivity over the next six years, they will invest in

digitally advanced operations while standardizing management approaches that optimize

company processes with the goal of boosting customer value.

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AJINOMOTO INNOVATIONS

Ajinomoto Foods North America’s goods are known for their innovation. They are

always evolving and enhancing our recipes, which is only possible because of their

personnel. Their R&D team employs trained foo scientists at all of their factories and office

locations, allowing for a seamless interchange of knowledge and encouraging new ideas

with little waste. The Innovation Center at their headquarters in Ontario, California, is where

all of their finest ideas come from. Their R&D team is assisted by several well-known chefs

from various ethnic cuisines, allowing us to make appropriate modifications toward

enhancing their products- an illustration of Kaizen philosophy. Their special tastes and

textures can only be produced by utilizing cutting-edge technology that has never been used

before.

Their equipment is developed to generate and enhance their original recipes,

ensuring that their clients receive the finest product each and every time. Their passion for

new concepts and flavours is presented through their unique utilization of discussions with

world-renowned gourmet experts. Many of their concepts are heavily impacted by each chef

who spends around one week at their facilities. Their responsibilities include thoroughly

educating the staff on certain platforms, flavor profiles, research history, recipes, ingredient

utilization, and much more. They’ve spent years creating a solid vendor portfolio that can

give them with the ideal elements for each design. Their staff will go through several rounds

of modifications till they are pleased with the ingredients, flavor, and presentation. They have

complete control over the completed product’s quality and inventiveness thanks to this

method.

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AJINOMOTO INNITIATIVES

Since its establishment, the Ajinomoto Group has sought to realize their founder’s

objective of helping people live better lives via healthy, tasty dishes that use umami, and

they have been spreading this message across the world. Food and nutrition challenges and

demands in modern life are growing increasingly diversified and complicated. Through their

company, the Group seeks to have the greatest possible influence on nutrition. To

accomplish this goal, they use individuals to consume a nutritionally balanced diet by sharing

their amino acid expertise. In this approach, they help individuals all across the world

improve their health and eating habits. The Ajinomoto Group’s most important initiatives is

by providing delectable food and amino acid products, as well as meals that promote health

and well- being. Furthermore, they also produce “Delectable salt reduction” (umami). They

also increasing the protein consumption for the consumers by promoting the motto “delicious

sugar and fat decrease”. The Group also improving workforce nutrition and product

development using nutritional profiling methods.

Other than that, they customized recommendations for items and service that can

help improve nutrition by personalized nutrition. Ajinomoto is making a difference in

preventative medicine using “AminoIndex technology” and regenerative medicine cell culture

medium. At last but not least, they also has biopharmaceutical development and

manufacture on a contract basis.

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SWOT ANALYSIS OF AJINOMOTO

SWOT analysis can assist Ajinomoto in focusing on its strengths and opportunities while

addressing its weaknesses and threats to improve its market position. Let's get started with

the Ajinomoto SWOT Analysis:

1. AJINOMOTO STRENGTHS

Strengths are the capabilities and resources that a company can use to create, develop, and

maintain a competitive advantage in the marketplace.

 Various revenue models: Ajinomoto Malaysia has expanded its operations beyond

the Basic Materials sector over the years. This has allowed the company to diversify

its revenue streams beyond the Basic Materials sector and the Chemical

Manufacturing segment.

 Large profit margins: In comparison to competitors in the Chemical Manufacturing

industry. Even though Ajinomoto Malaysia's profitability is under pressure, it still has

higher profit margins than its competitors.

 The success of the new product mix: Ajinomoto Malaysia offers its customers a

wide range of product mix options. It enables the company to cater to a wide range of

customer segments in the Chemical Manufacturing industry.

 Broad geographic reach: Ajinomoto Malaysia has an extensive dealer network and

associates network that not only helps in delivering efficient services to the

customers but also helps in managing competitive challenges in the Chemical

Manufacturing industry.

 Proven track record of innovation: Even though most players in the Basic

Materials industry strive to innovate, Ajinomoto Malaysia has a track record of

success in consumer-driven innovation.

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 2. AJINOMOTO WEAKNESSES

Ajinomoto Malaysia's weaknesses can be either a lack of strengths or a lack of resources for

capabilities that the organization currently lacks. Decision makers must be certain whether

the weakness exists due to a lack of strategic planning or as a result of strategic choice.

 High employee turnover: Ajinomoto Malaysia is also concerned about the lower

levels. It may result in higher salaries to retain talent within the company.

 Low investments in customer-oriented services at Ajinomoto Malaysia: This

may result in competitors gaining an advantage shortly. Ajinomoto Malaysia must

increase its investment in research and development, particularly in customer-

oriented applications.

 Operating margins and gross margins: which could be improved and may put

pressure on Ajinomoto Malaysia's financial statement in the future

 Ajinomoto Malaysia's per-unit revenue is declining: The Chemical Manufacturing

industry's competitiveness is putting downward pressure on profitability. The

following is a starting point for managing this situation for the company name:

objectively assessing the current value propositions of the various products.

 The additional cost of establishing a new supply chain and logistics network:

The Internet and Artificial Intelligence have significantly altered the business model in

the Basic Materials industry, and with the importance of the dealer network dwindling,

Ajinomoto Malaysia must establish a new robust supply chain network. This can be

extremely costly.

 Expensive replacement of existing experts: Within the confines of Ajinomoto

Malaysia Few employees are in charge of Ajinomoto Malaysia's knowledge base,

and replacing them will be extremely difficult under the current circumstances.

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 3. AJINOMOTO OPPORTUNITIES

Opportunities are areas where the company can identify potential for growth, profits, and

market share.

 Local Cooperation: Tie-up with local players can also provide opportunities for

growth for Ajinomoto Malaysia in international markets. The local players have local

expertise while Ajinomoto Malaysia can bring global processes and execution

expertise to the table.

 Government regulations are being tightened: making it difficult for unorganized

players in the Chemical Manufacturing industry to operate This may present an

opportunity for Ajinomoto Malaysia to expand its customer base.

 Customers' preference for higher-end products: It represents a significant

opportunity for Ajinomoto Malaysia, as the company has strong brand recognition in

the premium segment, and customers have had positive experiences with Ajinomoto

Malaysia brands in the lower segment. It can be a win-win situation for the company

and an opportunity to increase profitability.

 Growing the customer base in lower-income segments: Customers must

transition from unorganized Basic Materials operators to licensed players. It will allow

Ajinomoto Malaysia to enter the entry-level market with a no-frills offering.

 Rapid Economic Expansion: Because the US economy is improving faster than

any other developed economy, Ajinomoto Malaysia will be able to expand into the US

market. Ajinomoto Malaysia already has experience operating in the competitive US

market.

 Reducing the cost of new product introductions: Through a dedicated social

network and third-party retail partners, Ajinomoto Malaysia can capitalize on the

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 emerging trend of starting small before scaling up following the initial success of a

new product.

4. AJINOMOTO THREATS

Threats are factors that can pose potential risks to a company's business models as a result

of changes in macroeconomic factors and consumer perceptions. Threats can be managed,

but not eliminated.

 Competitors are catching up to product development.: Even though Ajinomoto

Malaysia is still the market leader in product innovation in the Chemical

Manufacturing segment. It faces stiff competition from both international and

domestic competitors.

 Commoditization of the product segment: The most significant challenge for

Ajinomoto Malaysia and other industry players in the increasing commoditization of

products in the Basic Materials industry.

 Competitive forces: The Basic Materials industry's new product launch cycles are

shortening. It has increased the competitive pressures on players like Ajinomoto

Malaysia. Ajinomoto Malaysia, due to its large customer base, is unable to respond

quickly to the needs of the niche markets that disruptors are focusing on.

 Increasing technological proficiency: One of the most significant risks of

partnering with local players in the export market for Ajinomoto Malaysia is the risk of

losing intellectual property rights. In emerging markets, particularly in China, the

intellectual property rights framework is weak.

 Scarcity of qualified human resources: Given the high employee turnover rate and

growing reliance on innovative solutions, the company name may face skilled human

resource challenges shortly.

 Market saturation in cities and stagnation in rural areas: This trend is an ongoing

challenge for Ajinomoto Malaysia in the Chemical Manufacturing segment. One of

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 the reasons is that product adoption is slow in the rural market. Second, due to the

vast distances and lack of infrastructure, it is more expensive for Ajinomoto Malaysia

to serve rural customers than urban customers.

REFERENCES

1. Ajinomoto Foods | Innovations to Improve Our Recipes. (2019, May 15). Ajinomoto

Foods. Retrieved July 3, 2022, from https://www.ajinomotofoods.com/about-us/core-

values/innovation/

2. Contribution to solve food and health issues | Sustainability. (n.d.). Ajinomoto Group

Global Website - Eat Well, Live Well. Retrieved July 6, 2022, from

https://www.ajinomoto.com/sustainability/materiality/food_and_health.php

3. History. (n.d.). Ajinomoto Health & Nutrition North America. Retrieved June 29, 2022,

from https://www.ajihealthandnutrition.com/about/history/

4. Medium-Term Management Plan | Management Strategy | IR | Ajinomoto Group.

(n.d.). Ajinamoto. Retrieved June 29, 2022, from

https://www.ajinomoto.co.jp/company/en/ir/strategy/managementplan.html

5. Wikipedia contributors. (2022, June 28). Ajinomoto. Wikipedia. Retrieved July 5,

2022, from https://en.wikipedia.org/wiki/Ajinomoto#:

%7E:text=1907%E2%80%931944%3A%20Origins%20and%20expansion,-The

%20original%20AJI&text=Ajinomoto%20was%20created%20to%20let,flavor%20that

%20he%20called%20umami.

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