"TOWARD A SUSTAINABLE JAPAN - CORPORATIONS AT WORK" ARTICLE SERIES Article No. 39
What Can a Global Food Company Do Toward Sustainability? - Ajinomoto's Story
http://www.ajinomoto.com/csr/index.html

AJI-NO-MOTO is the brand name of an "umami" seasoning produced by fermenting sugar from sugarcane and other crops. Umami is gaining acceptance in the world's scientific community as a fifth basic taste (after bitter, salty, sour and sweet) that can be distinguished by human taste buds. It's been nearly 100 years since Ajinomoto Co., well-known worldwide as the producer of this product, was established in 1909. The company has now developed into a global food group with annual sales of 1 trillion yen (U.S.$8.85 billion), selling foods, amino-acids, and pharmaceuticals in 23 countries and regions.

Over the last 100 years, the situation surrounding food has changed dramatically and concern about it is much higher than ever. Particular concerns include a looming food shortage due to population growth, water shortages and climate change, as well as health hazards of food treated with agrochemicals and growth hormones.

What kind of corporate vision does the Ajinomoto Group need today, to establish itself as a company that will be not only trusted and needed by society for the next 100 years, but also contribute to realization of a sustainable society?

"In order to secure safe and sustainable food resources, we support agriculture, livestock farming, and fisheries industries. We also contribute to the sustainability of the global environment by establishing a recycling-oriented business model that minimizes the consumption of nonrenewable resources and energies, as well as the generation of waste."

The above quote is from the Ajinomoto Group's 2005 report on "Image of CSR Achievement 2020." What kind of picture do you get about Ajinomoto after reading thus far? We describe below Ajinomoto's various activities inspired by the above vision.

"Multilocal"

Half of the Ajinomoto Group's production plants are located outside Japan. Its foreign sales amount to 26 percent of the total (about 10, 10, and 6 percent in Asia, Europe, and the United States, respectively).

The global marketing of food has aspects not found in that of other products, such as electronic equipment. For example, the major ingredients used to produce AJI-NO-MOTO seasoning vary depending on the market: sugarcane/cassava (Asia), corn (America) and beets (Europe). Because each area has its own climate, vegetation and food culture, the production processes established in one country cannot be applied everywhere.

"Ajinomoto Group started expanding overseas in 1917, almost 90 years ago, soon after it was founded. Whereas many Japanese manufacturers started expanding their production functions overseas during the 1980s, mainly for cost-cutting reasons, we have been engaged in local production using local materials for the last 50 years. We have been cooperating with local people, including farmers, in various activities, such as product development, raw material procurement, employment, production processes, environmental issues, and distribution. There are many regions where the past three or four managers have been local people. This shows our commitment to developing local businesses. In this sense our business can be characterized as multilocal," says Mr. Nobuyuki Sugimoto, Associate General Manager of the environmental department.

Ajinomoto Group's Recycling-Oriented Business Model

Being rooted in local communities has a big advantage in resource recycling. While some two million tons of waste and by-products are generated through all processes of the Ajinomoto Group's business, 97.8 percent of them are reused as resources. This has become possible thanks to close linkages between production plants and local communities.

Let's take a look at a typical Ajinomoto approach, its Brazilian production operations that involve linkages between three industries.

There, local farmers manage vast sugar cane fields that stretch toward the horizon (agriculture). In the center of the fields is a local sugar factory (sugar industry). To process 100 tons of sugar cane crop, the factory produces about 10 tons of raw sugar, generating four tons of cane molasses as by-products. Near this local factory, an AJI-NO-MOTO fermentation plant has been built to produce umami seasoning (fermentation industry).

Four tons of molasses delivered to the fermentation plant as valuable ingredients produce 1.3 tons of AJI-NO-MOTO umami seasoning through the work of microbes. Here again we see the careful use of resources, as about four tons of solid or liquid fermentation by-products are generated containing rich fertilizers and nutrients, which are in turn processed and returned to the sugar cane fields as organic fertilizer.

The Ajinomoto Group proudly calls this fertilizer a "co-product," rather than a "by-product." This fertilizer allows farmers to reduce by around 70 percent the use of chemical fertilizers (containing nitrogen) to grow sugar cane. Sugimoto explains, "Bagasse, or sugar cane fiber after extraction, is burned to supply part of the energy used in local plants. We hope to make our production plant operate more like a system where carbon, hydrogen, oxygen, and nitrogen circulate in a complete cycle, all powered by solar energy, except that we still have to add some nitrogen."

For over 30 years, the company has been creating operations around the world based on such a system, which it describes as a "bio-cycle." "Thirty years ago, industries did not hesitate to discharge wastewater as long as it met the local water quality standards. But we launched our efforts to make the best use of resources, driven by the spirit of 'mottainai' (a Japanese word that expresses a disdain for being wasteful). In those days there was no such thing as liquid fertilizers, so farmers and government officials saw it as no more than wastewater. We had to struggle for more than a decade to get them to understand the potential of liquid fertilizer."

As a result of its efforts, Ajinomoto Group has gained understanding and cooperation from local communities. It now produces various co-products that vary with the characteristic of local agricultural products or local needs. These co-products are used in animal feed in Europe and America, and in aquaculture in Thailand. In 2001, 94.7 percent of fermentation by-products were recovered as resources, and this rose to 99 percent in 2004. The company has started to apply the "bio-cycle" concept and technology to the production of processed foods by producing fertilizer from food residue, and putting it back to use on cooperating farms.

"We do have a substantial impact on the environment"

In fiscal 2003 the company established the Ajinomoto Group Zero Emissions policy with the goal to minimize environmental impacts resulting from all aspects of its business activities. The next fiscal year, the Group set specific group-wide targets to be achieved by fiscal 2010, dubbing this the 2005-2010 Ajinomoto Group Zero Emissions Plan.

These ambitious targets require the Group's innovative efforts. While the Group emitted 2.16 million tons of carbon dioxide (CO2) in fiscal 2005, it aims to cut 20 percent in production-related CO2 emissions per unit of sales compared to fiscal 2002. As for industrial waste reduction, the Group aims at a resource recovery ratio of 99 percent or greater in all businesses. It also seeks worldwide to achieve the level of nitrogen in wastewater at five ppm or lower, which is ten-times more stringent than required by law (e.g. 60 ppm in Japan).
Input and Output
http://www.ajinomoto.com/csr/pdf/csr2005/057-058e.pdf
2005-2010 Plan
http://www.ajinomoto.com/csr/pdf/csr2005/055-056e.pdf

Sugimoto admits that many people in the company claimed that they should set targets just by improving on their past achievements, for they had been voluntarily improving our environmental performance beyond what is required by law. Over about 30 months there was heated discussion within the company on how the targets should be determined. In the end, the Group reached the consensus that it could not make a giant leap forward without choosing ambitious targets, even if it might end up not achieving them. Sugimoto says, "We know without a doubt that, overall, our rapidly growing businesses have substantial environmental impacts. This is not good, of course. Regardless of the business sector or locations, we should seek to create businesses that have no environmental impacts.

Now that the targets have been established, management and employees at every workplace have started a trial-and-error process to draw a road map toward those goals, based on their collective wisdom.

Toward Sustainability

In November 2005 the Ajinomoto Group started the "People and the Earth Project" to help primary producers build self-sufficient communities, the first step toward the vision of supporting agriculture, fisheries and livestock farming to secure safe and stable food resources. As the first endeavor, under the theme "sustainable preservation of food resources and promotion of a society with sound material cycles," the company started to support cassava growing in Lampung Province, Indonesia using liquid fertilizers. Ajinomoto Group and people in the local community are learning how to achieve sustainable agriculture and create a self-sufficient community.

Stable food supplies, health and safety, sustainable agriculture, forestry and fisheries, and fair trade--various issues come to mind when we think about food and sustainability. In the past century, food technology, production and distribution systems have changed dramatically. In the next century the expected roles of a global food company might change beyond imagination. With its corporate vision based on the "multilocal" concept and a recycling-oriented business model, the Ajinomoto Group hopes to lead the way toward food sustainability.

(Staff writer Kazunori Kobayashi)

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