Japanese beverage group Kirin has agreed to sell its domestic food flavouring unit, Kirin Kyowa Foods (KKF), to Mitsubishi Corporation for a reported ¥30.5bn (US$321m).
Mitsubishi, Japan’s biggest trading house with interests across a wide range of industries, has been steadily acquiring food industry assets. KKF is at least the third food investment attempt by Mitsubishi in as many months as the trader leads its domestic competitors in their joint shift of focus to healthcare, utilities and nutrition.
Moreover, in the last two years, it has invested in meat and livestock in China, entered the salmon farming business in Chile and developed a grain collection and coffee plantation offshoot in Brazil. In December, it agreed to invest ¥3bn (US$31.5) in a Thai seafood venture, and the following month it made an offer to buy domestic meat products retailer Yonekyu Corp.
Mitsubishi’s growing move towards food comes as it and its rivals, which include Mitsubishi’s arch-rival Matsui, seek to counter lower profits from selling bulk commodities such as coal and iron ore. And now Mitsubishi is turning its attention to the natural flavours market, which it has valued at US$10bn.
“The market for flavour-enhancing ingredients is expected to see continued growth in the coming years,” Mitsubishi said in a statement. “The market for products such as yeast extracts in particular is showing rapid expansion.”
KKF will come under Mitsubishi’s Life Sciences division, which came to life in November last year. With food sciences as its main line of business, the division brought together two existing subsidiaries, Shoji Foodtech, which specialises in sweeteners and seasonings, and Kohjin Life Sciences, which focuses on fermentation technology.
“Adding KKF to this group as a core entity will allow for the consolidation of [its] collective food innovation capabilities and technical know-how,” said Mitsubishi. “This strengthens the group's value proposition and enables an improved response to sophisticated customer needs.”
The company added that the acquisition would pave the way for further business opportunities to help the group achieve its ambition to become “one of the leading companies in the global industry.”
Its purchase of KKF from Kirin will give Mitsubishi a company that supplies large-scale food processors and retail food chains with flavour enhancers such as yeast extracts, nucleotides and hydrolysed proteins. KKF has operations in Japan, Indonesia and China, according to the statement.