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Ajinomoto to enter Indonesian bread market

Ajinomoto is to enter the bread market in Indonesia. In July 2015, it will establish Pt Ajinomoto Bakery Indonesia (ABI), which will develop, manufacture and market frozen bread in Indonesia, with domestic sales scheduled to start in August 2016. ABI will aim for net sales of IDR 193.5 billion (approximately JPY 1.8 billion2) in fiscal […]

Ajinomoto is to enter the bread market in Indonesia. In July 2015, it will establish Pt Ajinomoto Bakery Indonesia (ABI), which will develop, manufacture and market frozen bread in Indonesia, with domestic sales scheduled to start in August 2016. ABI will aim for net sales of IDR 193.5 billion (approximately JPY 1.8 billion2) in fiscal 2020. Through this initiative, Ajinomoto says it will accelerate the expansion of its consumer foods business in Indonesia while aiming to make a greater contribution to the country’s well-being.

The population of Indonesia was approximately 250 million in 2013, and is projected to reach approximately 270 million in 2020. GDP per capita in Indonesia is USD 3,500, and the economic growth rate averaged approximately 6% annually from 2010 to 2014, with continuing economic growth forecast (source: Ministry of Foreign Affairs data, 2014).

With economic growth, dietary culture is diversifying Ajinomoto says, and the consumption of bread is spreading rapidly. The bread market in Indonesia was IDR 4.6 trillion (approximately JPY 43.2 billion2) in 2013, having compound annual growth rate of 13% from 2008 to 2013 (Euromonitor International, 2013).

Ajinomoto says that ABI will develop and manufacture high-value-added frozen bread that is not yet widespread in the growing Indonesian bread market and has not been produced in the country to date. Products manufactured by ABI will be sold mainly in the Jakarta metropolitan area by PT Ajinomoto Sales Indonesia. The main purchasers are expected to be from the middle class, which is growing as a proportion of the population.

Ajinomoto notes that it has a long business history in Indonesia, having established PT Ajinomoto Indonesia in 1969 to launch umami seasoning AJI-NO-MOTO. Since then, the company has expanded its business with the rollout of Masako flavour seasoning, Sajiku menu-specific seasoning for various Indonesian dishes, SAORI liquid seasoning and Mayumi mayonnaise.