The company's amino acids operations will move to Louvain-la-Neuve in Belgium and will be integrated with OmniChem, which already produces amino acid blends for a number of customers. The new company will be named Ajinomoto OmniChem.
While the reorganisation will affect only the European food-use amino acid business, it has been the feed-use amino acid business which has been one of the key drivers of growth at the Japanese company over the last year.
In the year to 31 March 2004, Ajinomoto's entire amino acid division posted a 14 per cent increase in sales to Y154.9 billion, while operating profits from the unit rose by an impressive 9.7 per cent to Y26.6 billion.
Most of the improvement came from a sharp rise in sale of feed-use amino acids such as Lysine, Threonine, and Tryptophan, but food-use amino acids also performed well, in particular in Japan where there was strong demand for infusion applications and sales to beverage manufacturers.
However, the European business struggled during the year as a number of customers made inventory adjustments.
Within the amino acid division, there was a particularly strong performance from the sweeteners unit - which includes the Aspartame business in Europe - although the good volume gains were not translated into revenue increases because of a sharp fall in prices and the impact of currency exchange rates.
Ajinomoto said that the decision to merge its two European units was part of its ongoing efforts to reduce production costs in amino acids. The price for feed-use amino acids tends to be affected by changes in the grain market, and keeping production overheads as low as possible is one way of offsetting these fluctuations.