The largest fermentation company in the world in terms of volume, Ajinomoto said it will use the cash to boost production of food flavour enhancers - nucleotides and MSG - in Asia, Europe and Latin America.
"Ajinomoto is pursuing a two-fold business strategy of providing a stable supply to the markets while improving profitability through cost reductions," the Japanese firm said in a statement yesterday.
The company added it aims to achieve net sales of 410 billion yen and operating income of 63 billion yen in its amino acids business, which includes feed-use amino acids, amino acids for pharmaceuticals and foods, umami seasonings and amino acid-based sweeteners.
Ajinomoto dominates the amino acid market (produced via fermentation), claiming more than 25 per cent of the market for the popular amino acid feed lysine and 30 per cent of the market for the umami ingredient, monosodium glutamate. US firm ADM and Germany's BASF also figure in the handful of players that dominate the landscape.
Pitched at €10.97 billion in 2004, the global market for fermentation products, that includes enzymes, amino acids, and xanthan gum, is expected to rise by 4.8 per cent per year, to reach €13.6 billion in 2009.
But according to analysts BCC, amino acids is the second, and fastest growing category behind antibiotics in the €10.97 billion fermentation market, with strong growth of 7.2 per cent forecast for the next four years.
Lysine and monosodium glutamate (MSG) are the largest products in this category, and the total market value for amino acids, including threonine and tryptophan, is estimated to be in the range of $3.5 billion (€2.68bn) in 2004.
In the umami seasonings global market, MSG is expected to increase to 2,100,000MT and nucleotides to 22,000MT in 2010.
Highlighting umami seasonings, Ajinomoto intends to "continue to invest aggressively", investing about 9.5 billion yen to expand production of monosodium glutamate and nucleotides in Brazil, Vietnam and Thailand.
In Brazil and Vietnam the firm will invest 4.5 billion yen to increase total production by about 35,000MT. A slice of the funds will lift its two Brazilian subsidiaries from 130,000MT to 150,000MT.
"Ajinomoto's products in Brazil have the highest level of cost competitiveness of any of its products worldwide, and are supplied to the Americas, Europe, Africa and Asia and Pacific," the company commented.
Brazil is the world's top producing country of sugar cane, the main raw material of MSG. The MSG global market is approximately 1,700,000MT, with a projected annual growth rate of 4 per cent. Ajinomoto claims to have a 34 per cent share of the market.
In Vietnam Ajinomoto intends to lift annual MSG production capacity from 45,000MT to 60,000MT with construction slated for completion by mid-2006.
On nucleotides, the firm hopes to strengthen global supply capability and double the annual production capacity of its Thai factory to 6,600MT. The world nucleotides market is about 15,000MT, with a projected growth rate of over 6 per cent. Ajinomoto claims a market share of approximately 40 per cent.
Proteins are made up of 20 different amino acids; nine of these - known as 'essential amino acids' - must be taken into the body from food because they are not synthesised in the body. Combining individual amino acids has also expanded the range of taste and functions for amino acids.
For example, the popular low calorie sweetener aspartame: 200 times sweeter than sugar, aspartame is a conjugate of amino acids aspartic acid ( a sour taste and slight umami) and the bitter tasting phenylalanine and is metabolised as an amino acid in the body.