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Asahi Breweries and Mitsui to Establish a Joint Venture for Manufacturing & Sales of Natural Yeast Extracts and Related Seasonings

Using a World-First Yeast as a Stepping Stone for Business Expansion

Mar. 9, 2009


Mitsui & Co., Ltd.
Asahi Breweries, Ltd.


Main Contents

Asahi Breweries, Ltd. (Headquarters: Sumida-ku, Tokyo, President: Hitoshi Ogita) and Mitsui & Co., Ltd. (Headquarters: Chiyoda-ku, Tokyo, President: Shoei Utsuda) established a joint venture called Advanced Yeast Technologies Japan, Ltd. (Headquarters: Sumida-ku, Tokyo, President: Kiyoshige Iwato; "Yeast Tech") in February 2009 to produce and sell natural yeast extract and related seasoning, aiming to launch the products in Japan and the rest of the world from late 2009 onward. Yeast Tech is a fifty-fifty joint venture of Asahi Breweries and Mitsui, with a paid-in capital of approximately 1 billion yen and anticipated annual sales of 20 billion yen by 2014.

The products Yeast Tech will sell are high-value natural yeast extracts and assorted seasonings containing the yeast extracts. To date, Asahi Breweries has developed four types of yeast strains which produce an extraordinarily high content of tasty compounds including glutamic acid that give abundant umami taste when added to a variety of food products. Yeast Tech will outsource the manufacture of the yeast extract to a Serbian subsidiary of Alltech, Inc. (Headquarters: Kentucky, U.S.A.), one of the world's largest manufacturers of yeast cell wall products for animal feed.
Upon the outsourcing to the manufacturer, Asahi Breweries will grant the use of Asahi Brewery's proprietary yeast strains as well as certain technology held by Asahi Brewery for cultivating the yeasts, and Asahi Food & Healthcare Co., Ltd. ("AFH"), one of the group companies of Asahi Breweries, will provide the technology for processing, blending and yeast extract manufacturing know-how to Alltech, Inc.

Mitsui will be in charge of the U.S. and European markets, taking advantage of the sales network of its overseas subsidiaries, while AFH and Mitsui will cooperate in Asian markets. As for the market in Japan, AFH will work with more reinforced activities than ever before.

From 1966 onward, AFH has been engaged in yeast extract business using brewer's yeast, which is a byproduct from the brewing. The yeast extract is used for components of seasonings, natural additives of food products, components of culture mediums for microorganisms and so on, and the customer bases are widely spread among food processing, seasoning, enzymes, flavor and pharmaceutical companies.
Keeping up with the expanding market, AFH has developed the business partly using imported yeast extract. Mitsui, which has been engaged in fermentation business, focusing on sugar and securing sugar resources, will also be able to expand the business once it starts sales of high-valued yeast extracts in European and US markets.
Taking advantage of the synergy effect from the three parties (Asahi, Mitsui and Alltech), we expect an enormous development of our yeast extract business.

The trend for the yeast extract market

With rising concern about health issues and the consequent tendency for additive-free food, the world market for yeast extracts has reached over 100 thousand tons and is expected to increase by 4-5% every year. Similarly, the size of the domestic market was approximately 15,000 tons in 2007, which was 30% bigger than it was five years before (2002) and approximately 5% more than the previous year, suggesting that further growth can be expected (Source: Food Chemical News).
Recently, more enhanced and richer flavor and more aftertaste are required in natural seasonings processed using yeast extracts, and substitutes for sodium glutamate, protein hydrolysate, etc. are being sought. An in-depth scientific study by Asahi Breweries, Ltd. recently led to the development of yeast strains that meet such needs, which promoted the establishment of the joint venture.

Profile of Alltech Inc.

Headquarters Lexington, Kentucky, U.S.A.
Capital 120 million dollars
Sales Revenue 350 million dollars (2007)
Representative Dr. Thomas Pearse Lyons
Established 1980
Business Description Manufacture and sale of functional seasoning and yeast products for animal consumption

Profile of New Company

Company Name Advanced Yeast Technologies Japan, Ltd.
Location 1-23-1, Azumabashi Sumida-ku, Tokyo
Representative Kiyoshige Iwato
Established 23rd February, 2009
Paid-in Capital Approx. 1 billion yen
Capital Contribution Asahi Breweries: Mitsui = 50:50
Business Summary Manufacture and sale of yeast extracts and seasonings

Notice:
This press release includes forward-looking statements about Mitsui. These forward-looking statements are based on the current assumptions and beliefs of Mitsui in light of the information currently available to it, and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause Mitsui's actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. The risks, uncertainties and other factors referred to above include, but are not limited to, those contained in Mitsui's latest annual report on Form 20-F, which has been filed with the U.S. Securities and Exchange Commission.
This press release is published in order to publicly announce specific facts stated above, and does not constitute a solicitation of investments or any similar act inside or outside of Japan, regarding the shares, bonds or other securities issued by us.

Information

For inquiries on this matter, please contact

Asahi Breweries, Ltd.
Communications Division
Telephone: +81-3-5608-5126
Mitsui & Co., Ltd.
Communications Division
Telephone: +81-3-3285-7566
Facsimile: +81-3-3285-9819