The supply of food resources isnot keeping pace with the growingworld population and rapidlyincreasing demand for food,resulting in a deterioratingbalance between supply anddemand.

The world's cultivated land is notincreasing, and crop yields aredeclining due to soil degradation.In response, the Ajinomoto Groupis employing high-value-addedfertilizers and livestock feedadditives to improve foodproductivity.

Vast amounts of edible foodresources are being discardedover the world, particularly inadvanced countries. Therefore,the Ajinomoto Group works tomake the most efficient use ofresources to help deal withshortages in food supplies.

Food Resources

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Issues Concerning Food Resources

Sources:Supply issues1 and 2. Calculated using the FAOSTAT Web site of the Food and Agriculture Organization of the United Nations (FAO)3. Ecosystems and Human Well-being: A Framework for Assessment, published by the Millennium Ecosystem Assessment

Demand issues4. World Population Prospects, the 2010 Revision, published by the United Nations5. OECD–FAO Agricultural Outlook 2009–2018, published by the Organisation for Economic Co-operation and Development (OECD) and FAO6. World agriculture: towards 2015/2030, published by FAO7. Status of Food Waste, published by the Ministry of Agriculture, Forestry and Fisheries of Japan (in Japanese only)8. OECD–FAO Agricultural Outlook 2008–2017, published by OECD and FAO

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kilograms of grain is required for poultry, sevenkilograms for swine, and 11 kilograms for cattle.

Meanwhile, biofuel is competing with food production, ascorn and other forms of sugar are used for rawmaterials. Greater amounts of food resources are alsobeing discarded as waste, further increasing overall fooddemand.

Shortages in the food supply

While food demand rises, the arable land available forproduction and crop yields per unit of land area are notincreasing. Land previously used as farmland isshrinking, and with unusual weather conditions caused byclimate change, crop cultivation is unlikely to continueproducing the same yields as in the past.

The balance between the supply and demand of food isgradually deteriorating, resulting in increasingly slimprospects for boosting food production to the levelneeded to meet growing demand.

9. Data taken from the World Population Prospects, the 2010Revision, published by the United Nations

Facts about food production

The total area of cultivated land is not significantlyincreasing worldwide.Crop yields per unit of land have been declining, andincreasing food production will be challenging.The environment for growing food is worsening assoil deteriorates on land used for cultivation andgrazing.

Improving Food Productivity

Facts about the use of food resources

In line with population growth, food production mustincrease more than 70% by 2050.Demand for livestock feed is growing as a result ofincreased consumption of meat in developing andemerging countries due to changing lifestyles.Large amounts of edible food resources are beingdisposed as food waste, especially in developedcountries.With the growing demand for biomass energy, aserious debate has arisen with regard to the use offood resources for either biofuel or food products.

Maximizing Usage of Food Resources

Food demand is growing rapidly with populationincrease

The world's population is expected to reachapproximately 7.0 billion in 2011 and grow to 9.3 billion9

in 2050. Vast amounts of food will be required to feedthe increasing population. Furthermore, rising economicwealth is encouraging higher consumption of meat,thereby creating the need for more grain to feedlivestock. To produce one kilogram of meat, four

Current Issues Affecting Food Resources

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Improving Food Productivity

Initiatives for Improving Food Productivity

The Ajinomoto Group leverages its products and expertise to improve food productivity. Among its main businesses,the amino acids business in particular has made significant contributions to the agriculture, livestock, and fisheriesindustries.

In these industries around the world, nutrient-rich by-products generated from the group's amino acid fermentationprocess are being used as fertilizers and feeds. With the addition of minerals, the by-products can also be used toproduce foliar fertilizers that greatly increase plant resistance to crop damage by replenishing their nutrients moreeffectively. The Ajinomoto Group is working to introduce and further promote the use of these high-value-addedproducts over the world.

Amino acids are the building blocks of proteins that are present in plants and animals, and are also one of the vitalnutrients necessary for growth.

The Ajinomoto Group makes the most of amino acids' nutritional aspects in its feed-use amino acids for livestock.Research is being conducted on amino acids suitable for fishery products, such as feed for farming fishery resources.By developing relevant processing technologies, the group intends to provide alternatives to fishmeal, of whichsupply is unstable.

Essential for life, amino acids have potential applications yet to be discovered. In the future, the Ajinomoto Group willcarry out further research and development in the field and draw on its expertise to improve food productivity.

Amino Acid Production Plants and Use of Co-Products over the World

The Ajinomoto Group produces nutrient-rich by-products in the fermentation process for amino acids and nucleic acidsat its globally based production plants. These by-products are regarded as co-products that can be made intovalue-added products, such as fertilizers and livestock feed for use in agriculture, livestock and fishery industries overthe world.

Amino acid and nucleic acid production plants, and use of co-products over the world

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Co-Products Contributing to Agriculture, Livestock, and Fisheries Industries

In Fiscal 2010, Ajinomoto Co., Inc. launched A-Link, an agricultural materialsproject aimed at expanding business, in addition to promoting thedevelopment of higher-value-added co-products and the use of amino acidsand nucleic acids globally.

As part of this initiative, the group developed AJITEIN high-grade livestockfeed by separating protein-rich fungus bodies from the co-products previouslyused for liquid fertilizers and livestock feed. AJITEIN production and salesbegan in Thailand, Indonesia and Vietnam in fiscal 2010.

Established primarily in South America, sales of AJIFOL® foliar fertilizer wasalso extended to Southeast Asian countries. Made with a special combinationof minerals and amino acids generated from co-products, AJIFOL® is used onsoybeans, vegetables and fruits to enable their leaves to effectively absorbnutrients contained in the product. Farmers have commended AJIFOL® forits role in the growth of healthy crops and increasing harvest yields.

In Japan, Ajinomoto Frozen Foods Co., Inc. and Knorr Foods Co., Ltd. have been jointly studying the cultivation ofrice and vegetables using co-products rich in nucleic acids produced at the Kyushu Plant of Ajinomoto Co., Inc., andconfirmed their effectiveness as agricultural materials. Ajinomoto Co., Inc. reported the results at the agriculturalmaterials exhibition, Agro-Innovation Japan 2010, and received inquiries from a large number of attendants. Thefertilizer was later developed and released as AMIHEART in April 2011.

The Ajinomoto Group intends to continue research and development aimed at further increasing the added value ofco-products, in an effort to release products that meet customer demand over the world and improve foodproductivity.

FD Green (Thailand) Co., Ltd.

A fish farmer shows a tilapia raised on feedmade from liquid fertilizer

Initiative 1: Activities of FD Green (Thailand)

FD Green (Thailand) Co., Ltd., a group company, was established in 2001. Itspecializes in co-products generated from the amino acid fermentationprocess of Ajinomoto Co., (Thailand) Ltd., which are used as agriculturalmaterials. Employing the slogan, "We will make the world green," FD Green(Thailand) develops technologies that effectively utilize co-products, andactively promotes products that enhance the productivity of regionalagriculture, livestock and fishery businesses.

Rather than selling co-products in their raw form, the company processesthem according to the requirements of particular regions to createhigh-value-added agricultural products. In fiscal 2010, an array of productstotaling about 220,000 tonnes by weight were sold, including AMI-AMI liquid fertilizer, AMIMATE solid chemicalfertilizer, AJIFOL® foliar fertilizer for promoting plant growth, and AJITEIN protein-rich feed. AMI-AMI has beenpopular among farmers in Thailand for over 30 years.

Farming Tilapia and other freshwater fish is widely practiced in Thailand. Useof dedicated fishmeal, however, has yet to be adopted; the common feedingmethod employs a food cycle where the fish eat water fleas that feed onphytoplankton, which is in-turn generated by adding chemical fertilizers tofishponds. As an alternative, AMI-AMI is highly beneficial for fish farmers, asits abundance of nitrogen, other minerals and organic compounds greatlyincreases phytoplankton growth when added to water. In the future, FDGreen (Thailand) Co., Ltd. will work with A-Link, the co-product project ofAjinomoto Co., Inc., to further develop, produce and market products withadded value.

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Cassava

A typical Indonesian farmhouse A family participating in theCassava Project

The Cassava High-Yield Cultivation Project in Indonesia

The Ajinomoto Group has been carrying out theCassava High-Yield Cultivation Project (the"Cassava Project") in the Indonesian province ofLampung since fiscal 2005, with the aim to helpimprove the livelihoods of cassava farmers andsupport the sustainable development of localcommunities.

Cassava is both a major food resource inSoutheast Asia as well as one of the fermentation raw materials used to make the umami seasoning AJI-NO-MOTO®. The group works with the Lampung Bureau of Agriculture and community development specialists toprovide working funds for the project and for improving cassava cultivation techniques and communitydevelopment know-how. Although a number of difficulties were initially faced when the project started, includinglanguage and cultural differences, irregular weather such as drought, and acidic soil, production per unit of landincreased 2.5 times over five years, thereby greatly improving the farmers' incomes.

Much of the land in the East Lampung region in

Indonesia is infertile due to acidic soil and lack

of irrigation facilities. Moreover, the average

household income for a cassava farmer with

one hectare of land is about 560 to 1,130 US

dollars per year. In comparison, the annual

household income of an Indonesian rice farmer

A meeting held at the farmers'cooperative

Farmers commended for theirgood work at the awardsceremony

with one hectare of land is about 1,690 to 2,250 dollars.1

1. US dollar figures are based on the average telegraphic transfer selling (TTS) rate of Japanese yen in fiscal 2010.

Cassava Project activities in fiscal 2010

Annual yield ofthe Cassava

Project

Beforeproject

Firstyear

Secondyear

Thirdyear

Fourthyear

Fifthyear

(FY2010)

Average crop yield(tonnes/hectare)

13 22 23 27 29 33

Aiming to provide a foundation for activities tocontinue independently, the Cassava Project setup a farmers' cooperative, locally known askoperasi, in 2008. The cooperative recorded asurplus balance of payments in fiscal 2009, itssecond year of operations, and demonstrated theability to produce stable profits after three yearsin fiscal 2010.

Cassava Project

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The commemorativephotograph of the ceremony

Members of the communitywatch the ceremony

Sudarman, the farmers'cooperative head, gives aspeech

The farmers' cooperative provides its memberswith the following services: (1) instructions forcassava cultivation, (2) bulk purchasing offertilizers and pesticides at reasonable prices, (3)assistance with harvesting and shipping thecassava, and (4) the establishment of lastingrelations with customers that purchase thecassava. Through these services, members havegained easy access to fertilizers, cultivationmanagement techniques, and sales information.As a result, farmers have increased their cropyields and secured a stable group of buyers.

In an effort to continuously develop, the cooperative started trial production of low priced compost to replacechemical fertilizer from fiscal 2009. It also began to set aside a portion of profits in a fund for replacing trucks andother equipment in the future, thereby establishing a foundation for enabling continuous operations going forward.

In March 2011, the farmers' cooperative held its harvest festival for fiscal 2010, along with a ceremony tocelebrate its founding. At the ceremony, local government officials praised the cooperative's activities, calling it a"model koperasi" in the region. The Ajinomoto Group intends to continue working together with the cooperative inthe future, monitoring onsite activities and providing guidance.

A message from Sudarman, the head of the farmers' cooperative

The Ajinomoto Group not only provided funds for the Cassava Project, but also

gave us ongoing support with its expertise in managing the cultivation of

cassava, and setting up and operating our farmers' cooperative. On behalf of

our members, I would like to express my deepest gratitude to the Ajinomoto

Group for helping us to independently carry out our activities. In the future,

we hope that our efforts at the cooperative will contribute to the development

of the local community.

Feed Additives Contributing to the Livestock Industry

For a number of years, demand for corn, wheat, and soybeans1 for use inlivestock feed has been increasing as meat demand grows worldwide, drivenby changing lifestyles in both developing and emerging countries.Furthermore, demand for corn as a source of biofuel has been growingrapidly, and more arable land in the United States is being used for thispurpose. Against this backdrop, it is becoming increasingly vital to curtail theuse of crops for livestock feed and more effectively utilize food resources inorder to ensure that overall food demand can be met with the limited landavailable. Recognizing this issue, the Ajinomoto Group is working to helpimprove food production by providing feed additives that boost feedefficiency and increase livestock productivity.

1. Soybean meal remaining after oil is extracted for use as a protein-rich ingredient in feed

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Advantages of adding lysine to feed

Initiative 2: Improving livestock feed efficiency through use of feed-use amino acids

Amino acids are indispensable nutrients for animals;essential amino acids in particular must be absorbedfrom food, as they cannot be synthesized in the body.Unfortunately, however, livestock are raised on feedsthat are generally deficient in certain amino acids, owingto commonly used mixtures of energy sources like cornand wheat, and protein sources such as soybean meal.

Achieving optimum livestock growth is challenging whensome amino acids are lacking. Regardless of intake, theamino acid most deficient in the feed sets a limit to theamount that can be utilized by the animal.Consequently, other amino acids above this level areexcreted.

Recognizing this problem, the Ajinomoto Group produces and sells feed-use amino acid products that can compensatefor specific amino acids commonly lacking in feeds, particularly lysine, threonine, and tryptophan. By supplementingfeeds with these feed-use amino acids, farmers can ensure that their livestock utilizes all amino acids moreeffectively, resulting in improved growth and higher feed efficiency.

The best balance of amino acids based on the barrel theory

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CALSPORIN®

Effective land use

Feed-use amino acids reduce the area of land required for feed-use crops and contribute to the effective use oflimited arable land. For example, if the portion of soybean meal used in feed were replaced with a combination ofcorn and feed-use lysine, the land area required to grow the corn would be reduced by approximately 70% as itsyield is about three times higher than that of soybean. In other words, if feed-use amino acids were not available,the expansion of arable land for feed-use crops would have to be accelerated to support the increasingconsumption of meat, possibly leading to deforestation or other environmental destruction. Thus, feed-use aminoacids enable the saved land to be used for producing food for the world's growing population.

Results of replacing 50 tons of soybean meal with corn and feed-use lysine

Initiative 3: Beneficial bacteria that reduce crops required for livestock feed

Calpis Co., Ltd. has accumulated technologies related tobacteria through many years of research on intestinalflora, the ecosystem of the numerous bacteria in theintestines. Leveraging these technologies, the companybegan producing and selling CALSPORIN®, a feedadditive for conditioning the intestinal environments oflivestock. At present, CALSPORIN® is being used as afeed additive mainly for chickens and pigs, and is sold in39 countries in North and South America, Europe, andAsia, including Japan.

CALSPORIN® increases beneficial bacteria such aslactobacillus and bifidobacterium in the intestines oflivestock, resulting in better intestinal flora. This enableslivestock to gain body weight with less feed, thereby increasing the feed efficiency1.Through the worldwide usage of CALSPORIN®, approximately 500,000 tonnes of crops used for formula feeds suchas soybeans, corn, and wheat are saved every year as a result.

CALSPORIN® has been highly evaluated in terms of safety. It has been designated as a feed additive in Japan, andwas the first Japanese feed additive to gain certification under the European Feed Addictives and Premixtures QualitySystem (FAMI-QS), a quality and safety management system that meets legal requirements in the European Union.It has the strictest requirements in the world for feed efficiency, quality, and safety at the genetic level.

1. Feed efficiency indicates livestock weight gain in proportion to feed intake. For example, if 3 kilograms of feed are needed to increase theweight of a pig by 1 kilogram, then the feed efficiency is 33%. Accordingly, the higher the efficiency, the less amount of feed is required forlivestock to gain weight.

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Fertilizer made at the ShikokuPlant is used for cabbage fields

Fertilizer made at the ShikokuPlant is used for onion fields

Maximizing Usage of Food Resources

Approach and Efforts to Maximize Usage of Food Resources

While Japan depends on imports for a significant proportion of its food products, a vast amount of food is wasted inthe country. Meanwhile, food shortages are becoming increasingly serious around the world as populations increase.

Using limited food resources more effectively can help reduce hunger, lower environmental impact and bring foodcosts down.

With this in mind, production plants of the Ajinomoto Group are taking stringent measures to maximize usage of thefood resources processed and minimize leftover waste. Furthermore, the plants are making every effort to re-usematerials remaining after production processes in fertilizer and livestock feed products, thereby establishing arecycling pattern.

To ensure that no food products are wasted even after they have been produced for consumption, the AjinomotoGroup is working to increase the accuracy of its demand-side management of product shipments. Stock on hand isreduced, and any products that remain undelivered are effectively utilized. In addition, efforts are being stepped upto promote cooking ideas and recipes that minimize food waste and maximize flavorful ingredients to encouragecustomers to refrain from wasting food in the kitchen and at the dining table.

Click here for more information on effective usage of byproducts and achievements in recycling resources underthe Ajinomoto Group Zero Emissions Plan.

Initiative 1: Recycling resources as organic fertilizer

The Shikoku Plant of Ajinomoto Frozen Foods Co., Inc. (FFA) produces about 130products for retail and food services, such as gyoza (dumplings) and AgezuniSakuttosan, a range of low-calorie frozen food products that are not fried in oil. Largeamounts of vegetable residue, such as the cores and outer leaves of cabbage not usedfor products, in addition to other organic residue are generated in the food productionprocess. To make full use of these remaining natural resources, the plant introducedequipment to compost the residue on-site, and began to sell it as organic fertilizer infiscal 2006.

From the second half of fiscal 2008, the Shikoku Plant began selling the fertilizer to thelocal-area farmers that it has contracted to produce cabbage and onions. In this way,the plant is using the farm produce as raw materials for frozen foods and returningunused materials back to the source in a recycling loop.

By fiscal 2010, 40% of the entire amount of fertilizer produced at the plant was beingused in the local area. In the future, FFA intends to continue collaborating with thelocal farmers it contracts to supply produce as a means to fully use natural resourcesand promote resource recycling.

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"Eco-Uma Recipes" are featuredon the Ajinomoto Group Website (Japanese only)

Initiative 2: Promoting delicious, environmentally conscious recipes to customers

To raise customer awareness on the importance of maximizing food resources andminimizing waste in everyday cooking, Ajinomoto Co., Inc. has been expanding an"Eco-Uma" initiative, which promotes recipes and tips for delicious and ecologicallyconscious meals.

In fiscal 2010, the company began a campaign inviting customers to submit "Eco-UmaRecipes." From a large number of entries, the company awarded prizes to 15 winningrecipes and ideas, and featured them on its Web site, in promotional leaflets, and atrelated events.

Looking ahead, Ajinomoto Co., Inc. will broaden the campaign to include customers'tips and cooking techniques, such as their choice of environmentally friendlyingredients and seasonings, as well as preparation, cooking and preservation methods.Through such campaigns, the company intends to take advantage of a variety ofopportunities to promote the message that ecological living begins at the dining table.

Initiative 3: NPO cooperation to donate to food banks as a way to effectively use food resources

As food products cannot be sold if their expiration dateapproaches while they are still in storage beforeshipment, they must be disposed of through incineration.

Although Ajinomoto Co., Inc. makes every effort tominimize the disposal of such products, several hundredtonnes are nevertheless incinerated annually. To addressthis situation, in previous years the company continuallyexamined the possibility of donating the products to foodbanks1 as a way of effectively using valuable foodresources.

In fiscal 2010, Ajinomoto Co., Inc. began its first trialfood bank donation, and provided 75 cases of food itemsin cooperation with Second Harvest Japan, an NPO thecompany selected on the basis of the results and scopeof the organization's activities. The final trial will conclude in fiscal 2011, and an in-house system to begin full-fledgeddonation activities is being planned.

Along with these activities, the company will continue optimizing production plans to minimize the number of productsthat cannot be shipped out.

1. Food banks often receive donations from corporations of food that, despite having no quality issues, cannot be sold in the market due todamaged packaging or other reasons, for distribution to people in need.

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