January 16, 2004

Ajinomoto - Betagro Joint Venture To Export Processed Pork To Japan

Thailand's Betagro Group yesterday signed a joint-venture agreement with Ajinomoto Frozen Foods Co Inc to set up Ajinomoto Betagro Specialty Foods Co.

The new company will invest 400 million baht in producing frozen specific-pathogen free (SFP) processed pork with an aim to export all output to Japan.

The factory, with full daily capacity of processing 400 pigs, is scheduled to be completed next year and is likely to be certified by Japanese Agriculture Ministry in October this year, qualifying it to export to Japan.

Masatoshi Ito, president of Ajinomoto Frozen Foods, said it would be the first time for Ajinomoto to import frozen SFP processed pork to serve both retail and wholesale markets in Japan. The joint venture plans to generate four billion yen or 1.4 billion baht of annual revenue within five years of starting operations.

Mr Ito said SFP pork represented only 10% of all pork sold in Japan and could command a price premium of 6-7% as Japanese consumers had increasing awareness about food safety.

"Japanese consumers do not yet know about pork from Thailand because there are no imports but the company also sells imported chicken from Thailand and it's the best-selling item," he said.

Vanas Taepaisitphongse, chief executive officer of Betagro, said the joint investment would lead to more co-operation in the future for research and development in adding more value to processed products.

Ajinomoto Frozen Foods, a unit of Japan's largest producer of seasonings, has forecast that its sales of frozen foods in the financial year to March 31 will reach 105 billion yen or 38.5 billion baht. Betagro's sales last year were 24.5 billion baht.

Suthep Tirapipattanakul, Betagro's executive vice-president, said the group would also invest 550 million baht to build an animal feed factory, scheduled to be completed in November, with 45,000 tonnes of monthly capacity. The feed would be supplied to Betagro's own chicken farms and sub-contracted farmers.

He said another 400 million baht would be invested in an animal medicine factory, scheduled to be completed next year, for local and export sales.

Mr Suthep said the group would create an R&D centre at the Thailand Science Park with 100 million baht in investment. The centre will conduct all research activities for the group on raw and processed products.

Betagro yesterday opened its second food complex in Lop Buri province, containing three new factories: a pig abattoir, soup base and sausage factories.

The pig abattoir is a joint investment worth 240 million baht with Sumitomo Corp while the 170-million-baht soup base factory is a joint investment with Dainippin Pharmaceutical Co Ltd.

The sausage factory was established with 235 million baht by Better Food Co, a joint venture between Betagro and Toshoku of Japan.

Betagro Group's plans to invest in animal feed, animal medicine, processed pork and a research and development unit this year will cost approximately 1.45 billion baht.