Ajinomoto Co., Inc. (2802) Earnings Call Transcript & Summary

[Audio Gap] Inc. Business Briefing. I am Kaji from IR Group serving as the moderator. Today, we're having hybrid format. And there might be some time lag between the venue and the web, but I hope you have a kind understanding. Now, let me introduce today's participants: Director, Representative Executive Officer, President, Taro Fujie.

Thank you very much.

Representative Executive Officer and Executive Vice President, Hiroshi Shiragami. Next in the queue, Director, Executive Officer and Senior Vice President, General Manager, Corporate Division, Tatsuya Sasaki; Executive Officer and Senior Vice President, General Manager, Food Products Division, Yoshiteru Masai; Executive Officer and Senior Vice President, General Manager, AminoScience Division, Sumio Maeda; Executive Officer and Vice President, Supervision of Frozen Foods, Hideaki Kawana; Executive Officer and Vice President, Supervision of Sustainability and Communications, Morishima; Executive Officer and Vice President in charge of Finance and Investor Relations, Eiichi Mizutani; Executive Officer in charge of Business Model Transformation, Masaki Kashihara; Head of Bio-Pharma Service, Otake; Green Development Division in EMEA. Those 11 members are present here today with us. Then we will spend about 2 hours in total today. And as part 1, we'll spend about 40 minutes to make a follow-up on the acquisition of Forge Biologics Holdings in the U.S., which was announced on November 13. And then in part 2, we'll have about 80 minutes to explain about growth strategies in food and wellness and green areas. So that's the flow that we're expecting today. And after the presentations in each of the sessions, there will be Q&A time saved. And it will be about 2 hours. So there is no specific break time saved. So if you would like to use the ladies and gentlemen, please do so as needed, and please use the backdoor, if you leave the room. For the materials for today, the Japanese version will be posted on the IR information side of our company, and the English materials will be sent via e-mail for those who have signed up for registration. And today's session will be recorded, including Q&A, and that will be uploaded to the IR site of our company, and I hope you will have kind of understanding. Let's get started, Fujie, over to you.

Good afternoon, ladies and gentlemen. Thank you very much for the introduction. My name is Fujie. Today, thank you very much for spending your precious time to come over to Kawasaki to our plant to our office here. This is what is called the Client Innovation Center. Here, together with our partners, we engage ourselves and have interaction with them so that we can drive innovation together. That is the facility for that purpose. I -- look, rather than me having a stern face and providing explanation to you one-sided, I think it is better for you to listen to the members who are engaged in innovation at the forefront to provide you with a more detailed briefing so that you can understand better of our business. So that's the reason why we decided to hold the session here. So this is a hybrid format. We are going to have this meeting, blending the people here in person and also those participated via the web. This is the first time holding the session here. So if you are -- if you have time after this, if you are here in person, we are having a networking session afterwards. So we would love to have a communication with you using that networking session later after the whole session is finished. So, the key messages today, those are summarized on the 3 points here that you see on this slide. The first is that [indiscernible] currently working on the ASV management for the medium-term. And among them, we have set forth 4 major areas for growth. We defined the road map for those areas, and we are now implementing the necessary actions. Secondly, in the area of health care, in view of our mid- to long-term growth and to achieve expansion going forward, we have decided to acquire Forge. This was announced on the 13th of November. And we have received questions regarding the outlook for 2024 in relation to this acquisition. So in 2024, including depreciation expenses, we are expecting upfront investment burden in excess of several billions of yen. That is the current estimate that we have. For the short-term, we have to anticipate some burden. But over the mid- to longer-term, in order for us to develop the company, we thought that this is definitely an area that we should focus on. So with -- at the BoD and also the executive committees, we have conducted a round of discussions and decided to invest in Forge Biologics. And we would like to lead this to our success and do our best. And we will share more details with you after this. And the third point that I wanted to share with you is that, in June of this year, we provided a briefing session of our ICT business, as well as health care business. For today, we would like to focus on food and wellness, as well as the green areas and provide you with a briefing on those business domains. As far as food and wellness is concerned, through the combination of the forecasting type of approach from today towards 2030 and also backcasting approach, coming back from 2030 to coming down to today, we have conducted studies from these 2 different approaches. And through this combination, we would like to steadily expand our business profit towards 2030, and we will cover this topic in the presentation. In the area of green business, the green food business, as well as agri business, we would like to lead the creation of a society that can coexist with the earth. And by doing so, we would like to aim our business growth towards the size of more than JPY 100 billion in the green area. The next page in the 2030 road map, we have set forth the purpose of this acquisition of Forge. So we have defined 4 areas as our growth drivers, growth areas. And in particular, in the health care business, in order to drive our mid- to long-term growth in health care, we have decided to acquire Forge. And in the first part of today's session, we would like to provide you with a follow-up after this acquisition is decided. In the second part, we would like to focus on food and wellness and as well as the green domain. With respect to the Forge acquisition, as I said earlier, towards 2030, we would like to establish a unique business portfolio, which is only uniquely available to us, and we would like to enhance the probability of realizing such portfolio. Of course, we would like to definitely steadily expand the food business. But at the same time, we would like to dramatically increase and expand the health care and ICT and other AminoScience-related businesses. The next page. This shows the details of the 100% acquisition of Forge Biologics Holdings. The EBITDA of Forge for the year ended December '22, was in a negative territory of negative $39 million. As I said earlier, in 2024, we are expecting upfront investment in excess of several billions of yen, including depreciation. However, we believe this is definitely needed for us to achieve our growth over the mid- to longer-term. And I've been talking about speed up and scale up after taking office. And I think this investment is just suited for that purpose. So we would like to definitely lead this to a success by increasing the probability of success. Of course, I'm sure you are concerned, but I think that you can keep a warm eye on this. And we would like to have your precious advice to lead this to a success. The next page. This is the management structure after the acquisition. This deal is expected to close at the end of December. The 100-day plan will be implemented post closing. So Forge is going to work on this, and we will address this after the closing, and we are now making necessary preparations for that end. The current CEO, Tim, he is a wonderful person, a very talented person, and I have my full confidence in him. He will continue to serve as CEO post-merger according to our current management plan. So we would like to take advantage of the intangible assets of Forge, which is the human talent. They are very energetic, and they are very capable. They have so many great talents. So we would like to take advantage of the existing intangible assets and make them richer. And, of course, all the personnel who were involved in this deal will be seconded to this company and work together with the current management. So, Otake-san, who is sitting on the far left here, he will go there and lead this business to a success together with the management team. In February, I plan to visit the Forge, and I'm planning to have a dialogue with them. And, of course, I will go and visit them on a regular basis and see if things are moving as planned. If things are not moving as planned, we would like to swiftly take actions. And with respect to the acquisition, as you can see on the next page, this is about our ambition of making contribution to the well-being of society, people and the earth. Well-being, meaning healthy and happy state. So together with the Forge, we would like to advance the gene therapy and make contribution to patients who are suffering from rare diseases because there are so many people who are suffering from those diseases. And we believe these social values will also lead to economic value. So by delivering the economic value and lead it to the solution of many different social issues. After me, Shiragami-san will talk about more details about this M&A. How meticulously and carefully we proceeded with this negotiation? How -- what we have done in order to improve the probability of success? Those will be covered by Shiragami-san and he will also explain the growth story of our health care business going forward. So we look forward to having a discussion with you today. Thank you.

Thank you, Fujie-san. We would like to move on to Shiragami-san's part of the presentation.

Good afternoon to you. This is Shiragami. Thank you very much for participating in our briefing session this afternoon. For those of you who came over to Kawasaki, I hope that you will enjoy the atmosphere of the Center of Innovation of Ajinomoto Group. For myself, I would like to provide you with a follow-up of the acquisition of Forge. So these are the things that I would like to convey to you, the key messages. Can we start? Do you mind if I start? Are those of you participating via web, sorry, the -- because of technical difficulties, we cannot show the screen. Those of you who are at the venue, if you could kindly use the material in front of you, that will be appreciated. Those are participating via the web, please use the material posted on the IR website. So based on that, we would like to start the presentation. We are so sorry for this inconvenience. I'm sorry, but we would like to move on with the presentation. So if you can refer to the handout in front of you, that be appreciated. So these are the key messages. The first thing, in the area of health care, in addition to BMX, as a next generation, we needs to have high value and expand into the gene therapies, the CDMO field that offers high-growth potential. We'll pursue business growth and increase our earnings. Toward the realization of our medium-term management, we have formulated 4 areas and formulated innovation strategy team in 4 areas. Among them, health care team started to work on networking and partnering activities, and this led to the acquisition of Forge. Forge have unique strength in business, human talents and technologies. To reliably produce various sectors, a highly challenging pharmaceutical raw material, they coexist the cutting-edge manufacturing facilities and highly advanced production and quality control systems. And that has led to the acquisition of good pipelines. For customers, this -- the manufacturing sites of these difficult investigational drugs are present high hurdles to change by customers, while its pipeline is growth added with the new pipelines to be acquired in the future, Forge will aim for strong growth. Through the synergies with AminoScience, we will further reinforce the strength of Forge Biologics and thereby accelerate and expand the growth of CDMO business. Furthermore, through the evolution of AminoScience, we will connect these activities to the construction of robust platform in the areas advanced medicine, including the expansion of our culture media business and entry into the cell therapy area. So this is Ajinomoto Group's growth strategy, 4 areas. Leveraging the strength of AminoScience. We aspire to achieve dramatic growth in these 4 areas where the market growth potential is high and offer a high social value. And the acquisition we made this time around relates to this health care business. In the overall health care business, we plan to expand our existing businesses, such as amino acids for both medicine and food, as well as the CDMO business. In addition, we will drive further growth through nucleic acid drugs, CDMO and culture media, we're also responding to the unmet needs that have high potential value and entering the gene therapy and cell therapy businesses. We will promote the conversion of a highly value-added business model and aim to accelerate the growth of business and boost the profitability as a result of that. The gene therapy market is currently estimated to be USD 7 billion or about JPY 1 trillion. It is projected that this market will continue to grow at a double-digit to a size of approximately JPY 7 trillion in 2030. One of the methods to deliver a therapeutic gene to the target cell is the adeno-associated viral vector, or AAV, which is a non-pathogenic and very safe method that Forge is good at. This is called AAV, and this market is projected to grow going forward. In the health care business, the key areas to growth would be anticipating advanced medical modalities in the future, creating unique and differentiating technologies servicing AminoScience and establishing a solid business foundation. In our health care business, we started from pharmaceutical amino acid business. There are 2 major trends. One is CDMO and the other is culture media that combine amino acids, which is included in amino acid segment for pharmaceuticals and food. So those are the 2 major trends. For CDMO, we have captured the advanced medical modalities from low molecule to biomedicine to regenerative medicine and created proprietary technology like AJIPHASE. We also acquired OmniChem to build a global business foundation in parallel. In this way, we have evolved our business over time. In the culture media business, likewise, we captured the modality and rolled out cell culture media for pharmaceutical and regenerative medicine from serum-free culture media. As for future growth areas, looking ahead to the PoF in 2050, anticipating future mobilities, we decided to focus on gene and cell therapy as our targets, where we can potentially differentiate ourselves through AminoScience. With the acquisition of Forge, we acquired the business foundation and unique differentiating technology of a gene therapy CDMO, which means we also have gained a foothold to expand into the cell therapy field. In the fields of gene and cell therapies, the CDMO and culture media businesses, we'll be able to expand through synergies. For example, synergies between Forge' CDMO business and culture media business will accelerate the development of the culture media business for gene and cell therapies and help us drive for new growth, including Forge and external sales. In the medium-term ASV initiative, we are also working to strengthen inorganic strategies. The 4 areas and their mid- to long-term growth strategies are being worked out by integrating businesses, markets, customers and innovation to bring together businesses in R&D, intellectual property. In addition, with the involvement of M&A, corporate venture capital, CVC, we have accumulated experience in M&A and PMI in the past, reviewed successful and unsuccessful cases and accumulated expertise for success, innovation and strategic teams, a 3-way integration have been formed globally in each of the 4 areas, and engage initiatives in that realization and growth strategies. The strategy team assesses the global markets to identify and evaluate partner channels for investment, technology acquisition, collaboration and M&A, which are aligned with our mid- to long-term growth strategy and help realize growth. And then directly contact them and negotiate them. And in health care, we -- as shown in this picture, by reaching out to the forefront of innovation, cutting-edge academia, start-ups and operating companies globally in the field of advanced medicine were building an intelligence network with enhanced [ system ], thus by becoming an insider in the innovation market, plus we developed our business strategy in gene therapy and partnering activities. We have been in contact with Forge for more than a year, building mutual understanding and trust. After we began assessing Forge' acquisitions, Mr. Otake, Head of BPS and other health care leaders continue to communicate with Tim, CEO and the management team, while myself and Mr. Maeda visited the local site to see for this culture and how well it matches up with Ajinomoto Group' purpose, AminoScience and CDMO businesses. In addition, we also reviewed the opinions of outside experts in our intelligence network and held discussions at meetings of the Board of Directors and management committee involving, among others, Director Nakayama, who used to run a pharmaceutical company before making this final decision on the acquisition. And the current management team will stay on the team and Otake and innovation team personnel is going to be discussed. Now, gene therapy refers to medical technology for treating disease-causing genetic abnormalities by modifying and adding genes in the body. Treatment that uses viral vectors to introduce genes directly into the body is called an in vivo gene therapy and often uses an adeno-associated virus, AAV vector, which is very safe. Various genetic diseases such as vascular, neurological, ocular and endocrine metabolic diseases are targeted. Now, let me introduce the Forge Biologics. Founded only 3 years ago in 2020, Forge already has solid manufacturing capacity and improved manufacturing track record, and it has a lot of pipeline and also customers and has 20 cGMP suite and have room to triple its capacity without major investments, and it also has one of the world's largest manufacturing facilities with gene therapeutics or 5,000 liters, which is another reason why it gained so many customers. Now, let me introduce the advantages. The Ohio region of the U.S., where Forge is located is like a Silicon Valley of semiconductors with the concentration of gene therapies and talented people in this field as the center of innovation. Forge has more than 50 Ph.D. holders, including those in the management, and other highly skilled professionals with excessive experience in the -- extensive experience in the field of gene therapy. And moreover, its extremely low turnover rate is another major strength. The next is the advantage in terms of its business. Forge possesses extensive pipeline grounded in the full value chain for the development and manufacture of gene therapy drugs. And this is the key for customers to actually choose the CDMO. And it has also strengthened high capability with a high level of production and quality control and track record of regulatory compliance through cGMP manufacturing of APIs for clinical trials, including its own gene therapy drugs. So this becomes the high advantage, and it has acquired new customers and a lot of pipeline since its foundation. And moreover, it has pipeline with ongoing clinical trials numbering in the double digits or more, as well as pipelines approaching 3 digits from [ moderating ] customers, including pharmaceutical majors, small- and medium-sized biotech pharmaceutical firms, public institutions and academia. Now, the technological advantage of Forge. This CDMO requires high standards of technology quality for gene therapy. And this is exactly the strength of Forge has and success in initial clinical trials after winning in other -- high probability of winning orders at subsequent stages. And Forge is capable of cGMP manufacturing and we can enhance our strength. And Forge is capable of cGMP manufacturing for all 9 major types of AAVs and extremely strong competence in the industry. In gene therapy drug manufacturing, viral vector production technology is still in its development stages to carry the gene to the target and is set to be a major challenge for the further development of gene therapy in the future. And Forge' strength and amino acid -- AminoScience synergy can contribute in this field. And when you create virus vectors, the only 10% to 20% of the genes are contained in the vector, and there are empty vectors, and that is the cause of side effects. But in the patented technologies of Forge, the ratio of vectors are contained, target genes can be increased by several fold, and it is a great advantage if you look at the subsequent certification process. And also, I mean, the cell lines used in the production of viral vectors can be optimized using gene modification technology of AminoScience and cultural conditions can also be optimized using culture media technology through the advancement of production technology. Thus, we hope to lead the gene therapy CDMO business. By combining Forge' strength with AminoScience, we will advance plasmid and viral vector production technology and also customer collaboration to strengthen Forge' CDMO business. Furthermore, we will also commercialize culture media for gene therapy by leveraging synergies between Forge' CDMO business and our culture media business. With this CDMO business, we will accelerate the business growth by deploying Ajinomoto Group's unique and differentiated qualities, such as oligonucleotide production by AJIPHASE and ADC business by AJICAP. By adding Forge in our Group, will further accelerate our transition towards a high value-added business model, fostering speed acceleration and scale expansion for growth in higher revenue generation. In summary, the acquisition of Forge will allow Ajinomoto Group, AminoScience to evolve to synergies between AminoScience and Forge and establish Forge' position as a CDMO for gene therapy. In the health care area as a whole, we will build a platform that contribute to the realization of advanced medical modalities, including the creation of a culture medium for gene therapy group drugs and footfall for entering into cell therapy field following our business in gene therapy. By contributing to the realization of advanced medical modalities, we aim to contribute to well-being. That is all. Thank you for your attention.

Thank you, Shiragami-san. I'm so sorry for being slow in the slide projection at the outset. So from here, we would like to hold on -- begin the Q&A session for the first part of today's presentation. But today, we have participants in person at the venue and also web participants. So we would like to take questions from both. [Operator Instructions] So we would have like to begin the first Q&A session. [Operator Instructions] Are there any questions? [Operator Instructions] The first question.

My name is [ Miyajima ]. I have a question regarding your initiatives to develop the pipeline for M&A. So my question is, as you can see on Page 10 of the presentation, you are going to develop the network of advanced medical service and collect information as an insider. So to the extent possible, if you could share with us -- I do understand this is quite difficult to collect information getting inside. So what specific actions have you been taking in order to develop this kind of network, if you can share that to some extent, that would be appreciated.

Miyajima-san, thank you very much for the question. All right. So Shiragami-san will answer your question.

Miyajima-san, thank you very much for your question. Well, in what way have we developed this network? Actually, first of all, as far as the academia is concerned, as you have just seen today, we have the R&D team and the R&D team, they are working on regenerative medicine and also our cell therapy and other R&D activities. And in these activities, they have developed our global R&D network. And also from about 3 years ago, at CVC, we have invested in start-ups. We have established a team that will study the investment in start-ups. So we initiated this activity 3 years ago. So they look into investment into funds, and they have access to many different start-ups and explore the candidates for our potential investees. And also, in addition, the M&A team was involved this time around. So start-up and also some more advanced stages, companies are reviewed as potential candidates in our list. And what is unique about this? As I talked about the trilogy, M&A team, R&D and CVC, they all work together in unison and also the overall business strategy under Otake-san's team will get involved as well, so that what with the right strategy for the short-term, medium-term and longer-term in order to drive growth. And also in the 3 areas, what kind of initiatives and partnering will be needed for each field will be explored and discussed by these people. And then in reality, we prioritized the potential candidates and have contact with them and discern the value of such companies and proactively engage with them and take necessary actions at the necessary timing. That's what we do.

Next, are there any other questions? We'd like to solicit questions from those who are in the venue. I just see a hand. Takagi-san, please.

I am Takagi from SMBC Nikko Securities. I'm not expert in layman, so I'm quite nervous asking questions, but the Slide 16 Forge's technology. And empty vector ratio can be reduced. I think that's the strength and technologies for Forge. But compared to competitors, how advantageous this technology would be? That's what I'm asking about. For example, this would lead to a reduction of costs or development continuation could be reduced. So compared to other companies, competitors, how advantageous that the growth is? Can you explain more about that?

Otake-san, please?

Well, in a quantitative manner, it's very difficult to say specifically, but what is required is this -- was virus vectors that have gene and empty vectors have to be excluded. As Shiragami said earlier, empty vectors could cause [ viral circular ] impact, the side effects. And because of that, in the purification the target would have to be acquired in a very highly purified manner. So you can increase the ratio by several folds. In other words, yield can be reduced by -- increased by several folds, and that would make purification process quite easy. And that is the advantageous point. So oligonucleotide and small molecules, this is true in that if you increase the yield by 10 percentage points and then purification yield could be doubled. So in terms of cost, if this the first, then it could become a significant advantage.

Let me make some additional comments, compared to the peer, that's what you asked about. So still in this gene therapy area, innovation is still along the way for the final development. So compared to competitor -- including competitors, the empty vectors are the majority. That's the function and promoting the gene therapy development. That is how it is now. But compared to that, the Forge has patented this technology, as Otake said, as you can enhance the value of the drug and also productivity and efficiency can be increased with this patented technology that they have. So this is the key -- one of the keys in the gene therapy development. So this is how they have the strength. Well, as a result, as you can see on Page 14, at the bottom, you can see the gene therapy, cGMP production. There is also already technology and capabilities that will make it possible. And with the trust of that technology, there are 2 digit pipeline items are in clinical trials, and then there are multiple pipelines underneath that, that would reach 3 digits. So this is the numbers that would reflect the strength of Forge. Yes, the customers do choose Forge because of that, and this is the benefit that will make customers choose Forge.

Now, I would like to accept the questions from the web, I would like to call out from Nomura Securities, Matsubara-san. Matsubara-san, can you hear us. We're sorry, but I'm sure Matsubara-san has unmuted, but we cannot get his audio. So we'll come back to this question later. Another participant from the web, Saito-san, can you begin your question?

My name is Wakao from JPMorgan. May I ask a question? I have 2 questions. I listened to your presentation with a great amount of interest. My first question relates to the previous question, maybe I'm sure that you may not be able to give us some quantitative numbers, but this is very important, so I would like to hear. The number of empty vectors are limited, and that I think is a very important point in this kind of therapy. So in that environment, maybe you don't have a quantitative data, but if it's possible, I would like to know that the [ VGA ] per milliliter, can you give us the number of VGA per milliliter? Because in the stock market, you have announced this, and I know that FUJIFILM, FUJIFILM has made an announcement regarding gene therapy as their production efficiency into the power of 13 VGA per milliliter is their number. So do you have anything similar as a number to that? If you don't have any data or if you cannot disclose that data, what is your comparison vis-a-vis, for example, FUJIFILM? That's my first question.

In the due diligence, we have asked this question to them. But right now, I don't have the clear concrete number in my mind right now. So, if necessary, we can come back to you later on a separate occasion, if that is needed.

And so, this is company that you are acquiring this time, they have won many different pipelines. The production efficiency is very high, and you have highly evaluated that point. Is that correct?

Well, of course, the technical prowess is one thing that we considered as an important highlight. But not only that, a CDMO, they have the full range of capability, as well as human talents and very splendid track record and quality control and the manufacturing facilities and the scalability. In all these points, they have a very high score, high level. So that's the reason why we have highly evaluated this company and decided to make this proposal for acquisition.

Okay. And my last question. Recently, bioventures are now having a very tough time in terms of financing and many CDMOs in terms of [ GN cell ], those are operated by biotech. So for the financing funding impact from biotech, CDMOs are also affected to some extent. So what is the situation of this company of your recent acquisition? If this company is also affected? Can you give us your views as to how this impact -- when this impact will start to alleviate? Can you give us some outlook?

I'm sorry, it was difficult to hear because of the audio condition. You talked about biotech companies being affected.

Yes, the bioventures are now having financing troubles. And as a result of that, the biotech-related deals are decreasing. I think that is the situation of the CDMO market. So you acquired Forge. Is Forge affected by this situation? And if it's affected, when do you think that things will start to improve in the future?

I would like to give you a general comment, and maybe somebody else can supplement later. Of course, the current situation, as you know very well, we are slightly affected, and I think that is already factored in our plan. But on the other hand, this is a company that has -- the demand for CDMOs that have differentiating technologies is still very ample, very strong appetite for such companies. And actually, Forge also in the last 12 months, they have won a lot of projects in their pipeline, and some are in the clinical stage already. So because of that, of course, there are some degree of headwinds. But because of these projects that we're working together with them, I think they are also having a very favorable trend and favorable performance.

But if there is any additional comments, I would like to ask if there's any?

Yes, this is a company that has a very sophisticated technology in drug manufacturing. So in the low molecule environment, previously, the pharmaceutical companies produce them in-house in many cases. However -- but as the modality enhances to a higher level, a very high expertise and CDMOs that have high expertise or being entrusted with the production as an outsourcing destination. So Forge requires a very huge -- has very high technology. And for CDMO, they require high level. So reliable companies that have talented people are seeing the concentration of these outsourcing orders. As far as Forge is concerned, as we have communicated from before, this has a history of only 3 years. But for more than 40 companies, they have received a pipeline of projects of more than 70. So 15% of concentration of pipeline to this company around the world. So I think they have secured a huge amount of pipelines in this very short period of time. So together by comply -- blending with AminoScience, we will try to differentiate ourselves from the pack and clearly present this proposition so that we can reinforce its competitive advantage. Of course, we're aware that the venture companies are having hard time accessing the funding. If you ask me if this company is immune from those financing difficulties, maybe if they had ample funds that might have -- they might have been able to acquire more pipelines, but I think the impact is negligible, if any. If I add one more comment regarding the intelligence team that I just alluded to, they are collecting a lot of information as well. Start-up and biotech companies overall are affected by those financing. But as far as gene therapy is concerned, just take semiconductors in the United States are also in Western Europe, these are -- this is a very focal area in the innovation center -- in the innovation area. So I think the impact is very minimal, if any, and the market itself is growing at a favorable pace, according to my understanding.

Okay. I was curious to hear that because the competitor was affected quite significantly.

Next question Matsubara-san. Now, can you hear me?

Yes.

I'm sorry. I am Matsubara from Nomura Securities. I have 2 questions. The first one is about technologies. Earlier, you said that the technology is to reduce empty vectors and adenovirus help us plasmid. Is this the technology that you're talking about, which was patented in 2022?

Well, yes, plasmid and also cell line, those are combined to achieve the unique high yield. That's our understanding.

And then the second question, the vector or cell will be further increased to introduce genes. But if you have difficulty in developing cells, that's the difficulty that they have and many CDMOs have. So can you tell us the time line for developing those cells to produce this in your company?

Well, that is the most important point -- one of the most important point. And going forward, in PMI, we will take a look at the plants and work out the plants to have specific time lines. But at this moment, within our company, the cell lines mutation for the gene therapy has not been developed. So Ajinomoto health science or bioscience institute, research institute and Forge will work together to enhance the technological capabilities. So let me make some supplementary comments. In our AminoScience technology, I mean, bioengineering and amino acid has helped nurture this, and this is used in gene therapy and regenerative medicine. And the technologies of Forge could be combined with AminoScience and then make it our strength, as you said. So this is going to be the challenge. And so, we need to resolve this.

Any further questions from anyone in the venue? Ihara-san, please begin your question.

My name is Ihara from UBS Securities. I have one question. Regarding the future growth strategy for the health care business, especially when it comes to M&A, I have a question. Your company nowadays are exploring many different opportunities here and there. But what are the missing pieces for your business right now? In the low, mid- to high molecule, you have a lot of modality already. So what are the missing pieces? What are the areas? What assets are you exploring in terms of M&A?

Well, thank you very much for your question. I would like to first answer the question and maybe somebody else can add further comments. From before, as I have been talking about to you, by 2030, JPY 300 billion cash generation. I think cash is already prepared for. It's not that we are intended to use them up as a foregone conclusion. If we review the M&A in the past, of course, there are many things that we have to reflect upon. So we -- it's not that we are going to choose from a long list that has been introduced to us. We deal and have an interaction with those companies. And if we can have a common aspiration, we will agree on a win-win solution with such potential partners. And at the same time, it's not that I am the idea generator and you are the one who will execute on them. Those people who came up with idea will have to execute all the way down. So we have defined the 4 growth areas as a company, health care, food and wellness, ICT and green. So among them, especially, we believe AminoScience is something very unique to Ajinomoto. So we would like to take advantage of this AminoScience technology. So with the budget of JPY 300 billion, we would like to look into opportunities that can take advantage of the AminoScience technology. So maybe my colleague can add some words.

Well, thank you very much for your question. Well, Forge, with this Forge acquisition, this was -- we were able to establish a very large and solid foundation -- a platform. So with this platform, the regenerative medicine and also gene and cell therapy, so from low, medium to high molecule, I think the modality beyond that can be served with this platform already. So I don't think that we are going to go for another round of a major acquisition in the future. But, of course, you will have to have access to key areas. So we would like to control those key areas and so that we can become a top runner in this field. So the assets and partnering needed for that purpose will have to be explored on a continual basis. That is our plan.

Yes, we see a hand. So in the interest of time, we would like to make this last question. Saji-san, please.

I am Saji from Mizuho Securities. I have one question. Forge, they can produce all major AAVs and have a competitive advantage. Why they have been involved in long-term discussions with Ajinomoto and chose Ajinomoto? What is the attractiveness Ajinomoto aims from the perspective of Forge?

So I'll give you the general comments and then my colleagues can follow up. First of all, the intangible assets, the talent and technological assets, they have had a keen interest in us in that field. With Forge alone, further expansion in terms of scaling up and speeding up will be difficult. And with the talent and technologies with -- of Ajinomoto, they can take advantage of their strengths further to further grow. I think that's what they thought. And we've been talking to Tim, the CEO, and I asked, frankly, why they were interested in us, and that's the answer that we received every time. And we have aligned in terms of purposes and aspirations. That's what Tim says strongly. Is there any additional comments from my colleagues? So Maeda and myself, before this process visit their site. And the AminoScience video that was played beforehand was used to explain about AminoScience strength and what we are aiming for and vision. And as we explained that, then the team and other top management members emphasized that, and they said that they would like to work together to command the world market. That's the world that they would like to envisage. That's what we have shared between ourselves. And with regard to the synergy between the companies, we had alignment. I think that is the biggest reason. Well, frankly speaking, so the chemistry between different people from 2 companies is quite good. Of course, we would like to contribute to society. That's the aspiration and purpose that we both have. But they would like to contribute to society with technologies rather than buying low and selling high. And what we have been worried during the deal process is that, there could be a major fund that would offer higher prices, but that has not happened. And that's why we have been able to agree on the amount that we have agreed and maybe that was fortunate for us. So in the cutting-edge technologies, if this is like, then there are -- if there are some deals coming in, then there could be a next step that you could go forward. In other words, within this industry, Ajinomoto has been rated highly in the cutting-edge in the areas, then there could be some potential candidates for acquisition next time. Well, we don't have any plan basically to have major M&As. But in order to have key technologies, if it is under a certain amount, then we could consider the possibility. So the talent is finite. So if you expand too much in the business scope, then everything might -- nothing might work. So rather than that, we have to make sure that one deal that we did have should be a success. And if there are many -- 3 targets in our company, then we could have 3 major deals, but that is not the case. So we should concentrate on this for the time being to produce tangible results and then win they trust. That is important.

We would now like to finish the Q&A session for the first part of today's briefing. All right. So I'll make the move on to the second part of today's briefing. Food and wellness and green, growth strategy will be explained from here. Masai-san, Kawana-san, please begin your presentation.

Everyone, I am Masai, and I would like to explain about food and wealth. And Kawana will join me, and thank you very much for giving me this precious opportunity today. Now, next page, please. So can you go to the first page? Yes, right there. First of all, in the food and wellness, among the 4-ish areas, what is the positioning? If you look at the world in 2030, needless to say, there will be more environmental issues and aging issues and health issues that will become more serious and important. And on the other hand, digitization and progress in AI will not stop. And in this context, environmental issues are focused in green area, and health issues are taken care of by health care field and digitalization and AI will be followed up by ICT in our company. And what about food and wellness business? What are we looking at? So actually, food and wellness is -- what is important is that, this is the area where the people embrace familiar [ taste ] and they would like to actually continue to experience the familiar and local home taste. That is one of the areas in this. But then there's environmental issues and health challenges and lifestyle changes, and that could affect that food culture and could bring about changes in the food culture. And that is one of the risks. And therefore, what we are aiming for in food and wellness is the 2-pronged response. One is the response to changes. And also, if the food culture remained unchanged, then we have to respect each country's food culture. And as for that adaptation to change, we have the backcasting approach. And for the other, for the country's unchanged food culture, we have to have a forecasting approach. And in the backcasting approach, we worked with 3 other business fields and also marketing design center, the new established institution. And then Mr. Kawana will explain about that later. But for myself, I will be focusing on -- focusing approach mainly. And the organic growth is mainly embraced in this field. Next page, please. So in here, what I am embracing is the concept of [ business ]. I've been experiencing -- I'm in the science for a long time. But after appointment in the General Manager of Food business, it's been 1.5 years. And what I realized is, quite -- what is regard as common sense. Food business is a huge organization compared to AminoScience in our company. And in this huge organization, in the same food areas, the businesses have been segmented in various ways, and each function of supply chain has been segmented and they have been segmentation of B2C and B2B. And in the B2C furthermore, there's adaptation to food culture in each country. So in these segmented functions and businesses, each has evolved and played its part previously. But going forward, what we call orchestration, orchestrated approach is necessary. And one of them is fusion of food and size, but it's not just that. But in B2B and B2C, there could be collaboration. And also, each country is adapting to food culture and different countries can work together and also collaboration between different functions that should be promoted. Next page, please. And one of the things that I'd like to share with you is that, in 2024 April, there was -- there is going to be integration between B2C and B2B. There is a segmentation, but the B2C and B2B will become one, respectively, independent organization, but there is no change in terms of disclosed segmentation. Next, from the geographic regional strategy. As I have been saying, we -- in B2C mainly, we are adapting to the food culture in each country. And we will enhance the country's activities. But on the other hand, from a specific country to another different region or country, exports and business expansion should be promoted as well. For example, from Japan to East Asia, made in Japan products could be exported. So in the short term, because of import restriction by China, we have been struggling, but this is a flow that we've seen -- a trend that we've been seeing. In Indonesia and Malaysia, where all products are produced, and this -- these could be exported to growing Islamic food culture countries. And in Africa, we have a site in Nigeria. And from Nigeria, there could be a peripheral West Africa or from Turkey to Middle East and Europe, there are such trends. But what we are also paying attention to is that, what we are selling in Southeast Asia and Latin America could be brought back to Japan. And consumers in Japan, they are vaguely aware that we are working hard and performing well in overseas. But that's vaguely because in -- each country is adapting to its food culture and it's selling different brands. So we are selling the products in Thailand and in Asia, but those are not being recognized by Japanese consumers, and that should be changed. And so, we would like to explain about deliciousness technology that we have. I'm sure you may know this, but deliciousness technology is what we have in food. So the characteristics of Ajinomoto's deliciousness technologies is, it is composed of AminoScience. The taste perception, texture perception and aroma perception are constituting this deliciousness technology is that characterizes our technology. And then -- so what we call deliciousness technologies, historically, has been fitting the regions and being successful in some regions, but there are other regions where we have been struggling with these technologies. So in terms of business, where we have been successful are in those countries like Southeast Asia, Latin America, East Asia and West Africa. On the other hand, the reverse is the case in Europe, U.S., India and Middle East. And as for Europe and U.S., there has been some changes that we've witnessed. Kawana-san's team has been promoting Frozen Foods business and there has been on the growth track now. And as for Umami seasoning, especially the Generation Z has been changing their perception for Umami. That is a positive change. And India has a regulation problem. But in Middle East, there has been some changes. For example, there has been increased exports from Malaysia to Middle East. But on the other hand, this deliciousness technologies have been working well in Southeast Asia and Latin America, so far, but there has been improvement in the quality of life in consumers. And they used to have seasonings used in eating at home, and it has been growing, but there will be more needs going forward for simple foods and foods we're eating out. And then the frozen food technologies that we have tinplated in Europe and U.S., it could be also deployed in Latin America and Southeast Asia as well. So this [ is what I do ] in terms of geography is part of the orchestrated approach. Now, let's turn to Japan. There are 4 measures. The first one is the response to changes in life patterns of the people. So consumers' insight is the keyword that we are looking at, especially and the marketing design center in particular, is taking a challenge of this issue. And Kawana-san presentation is related to this following me. And also, the second is the collaboration between the production and sales in product development. So Ajinomoto has been quite strongly about customer orientation and deliciousness technologies. And -- but in terms of production mass testing, there has been some skew and unevenness in utilization rates of the factories. And overall capacity utilization has been low, which is an issue. So by enhancing collaboration between production and sales, we could enhance this and this is the improvement of operation. And this is right in the middle of operational excellence that we have been promoting, advocating for the several years and this is one of the important pillars in our opposite approach. And the third is the foreigners, the word foreigners is a keyboard and those who are coming to Japan and coming to Japan for work is increasing. And what attracts attention is that from Southeast Asia and Latin America, there are more foreigners coming in, Southeast Asia and Latin America has a special meaning to Ajinomoto. The brand equity has been highly appreciated in those countries and those people who have recognized our brand is increasing and this would lead to our business opportunities. And the fourth is the changes in distribution. Needless to say, the home delivery and e-commerce is increasing and discount stores and drug stores presence are going to continue going forward and have to respond to that. And also in terms of distribution, there is logistics issue of 2024 issue that is turning to Japan, but the Ajinomoto uses F line project to respond to this issue. But sales department and logistic department are expected to work more closely and this is another theme of orchestration. So this is my last slide. The B2B business is going to be the starting point for evolution. So in our company, more than 30% of the revenue is from B2B, which is quite unique food company -- in terms of food company. And by having B2B business, we have what we call customers' assets and amongst our customers, those customers that have established a relationship that would enable us to call them partners, but each business has its own unique business relationship with those partners. But we'd like to have a relationship with those partners -- partnered customers beyond its business scope. And if we have strength in B2B, then that means that we have materials to sell and we can take advantage of materials more. And obviously, our biggest product is [ MSC ]. And at this moment, the MSC produced more than 70% is used in our in-house, in our group. But by 2030, we'd like to increase this to 85% and that has been already announced. And that is because there will be internal demand increase for an MSC and by taking full advantage of that, we can enhance the value of B2B business. That is all from myself. And I like to hand this over to Kawano-san now. Now Kawana is going to explain about Backcasting approach. So in our company, what could happen in terms of changes that includes the consumers and earth environment and technology and the environment and social system. And by '20, we have drawn the picture of 2030 and 2050, I'm not going to go into details, but for -- we are to contribute to 4 areas where we can contribute to 4 areas. And the third and fourth of those 4, which are food and life and so a healthy physical note is what we would like to contribute to first. And then one step forward, taking one step forward, we'd like to also contribute to well-being and to our business.

There are 2 approaches to get there. One is that, that now people are living for 100 years as their potential life spans are as people age is, the health condition deteriorates generally. So we would like to boost that level. So that's one initiative that we would like to focus on like lifestyle -- lifestyle diseases, frailty, dementia. The impact of food is considered to be very large in this aspect. So we would like to provide solutions to health issues through our existing businesses, as well as our new solution service that we are going to develop newly going forward. The second approach is the contribution to lifelong well-being. It's not only about the physical health, but on top of that, we would like to create a mentally happy state through food, for example, sports, travel and also having a conversation with people close to you in these opportunities, food can make great contribution. So those present events, pleasant experiences will be provided. And through that, we would like to develop a community and create fans and expand our products and services as a result of that and the marketing design center will play a central role for that. And another area is robots, AI, those are advancing quite rapidly. So together with robot manufacturers or consumer electronics manufacturers, we would like to work together with them, so that we can automate cooking processes and also personalize the food, depending on the individual preferences or their health attendancies. First, regarding the initiatives in the existing businesses. So, uncompromising nutrition is the slogan of the company. So for that purpose, we would like to promote -- those has reduced salt products and both intake of protein. So we have expanded the products, including frozen foods and the activities is comparable between Japan and overseas. As of 2022, the sales has risen to close to JPY 7 billion. We would like to raise this number to JPY 15 billion by 2030. Next page. For the individual health needs, supplement, aminoVITAL has been playing a central role, but this area towards 2030 is also is expected to increase the sales price to JPY 15 billion. From currently JPY 15 billion, we will activate this to JPY 25 billion by 2030. So those -- that was about the B2C retail business. But in fact, B2B processing and also eating-out kind of solution is also what we offer, such as the solution for low sugar, reduce salt and low fat and enhanced protein intake. So, the direct sales is limited, but if you go all the way down to the downstream, the sales size can increase by 100x. So this is a very important area for us as well. So if you look at this, I think you'll be able to understand the initiatives that we have undertaken so far after all was about providing of solutions in order to eliminate the excessive intake of nutrition or to boost the insufficiencies. So I think that was the same for other manufacturers that we were providing these solutions through the mass channel. But in the future, we would like to go one step further and not providing the food itself, but try to improve the dietary habit itself. So this is the new solution service that we're talking about, the integrated food and health solution service. So looking at the body condition and also grasping the eating habits and trend, we will propose the ideal diet and mend the gap of what is ideal in the current situation and offer frozen food or other supplements and monitor the situation, feedback and run the cycle. This is the service that we like to offer. The next page. So as I just mentioned, the existing business model of [indiscernible] was through a large mass channel. So through this large mass channel, we provided the goods that represent the value for the largest common denominator to a large number of people. So to 10 million people, JPY 1,000 per year, that was the business model. So it's a very shallow engagement with such mass consumers. But of course, in the future, the people's value will diversify and when it comes to health, the situation is different from person-to-person. So I think we have to deliver a value that is more personalized to individual, so we would like to focus on the middle mass and then connect with them through the digital channel and then offer services and products food to them directly. So with 100,000 people, it's okay -- to 100,000 people, we would like to have them buy JPY 100,000 for us as part of our product and service offerings. And then this will raise to a business size of JPY 10 billion or so. So we would like to develop pattern for this and develop multiple sources of JPY 10 billion of sales channel. So this cannot be done only by our self. So we have to work together with many different partners and companies in order to develop this integrated food and health solution. So there are many players here and they are offering many different wellness services. So we'll work together with them and we will play the role of providing a platform for food and health. For example, when you talk about health, it's not only about food, it's about exercises. Those are going to be very important as sleep is also important. So if it's exercised, we would like to work together with fitness and sports manufacturers. If it's sleep, we can work together with the furniture manufacturers or the sapling companies or if it's the lifestyle diseases of middle-aged person, maybe metabolic syndromes, we can, of course, work together with the security companies or the insurance companies, for example, for the senior age group frailty and also dementia will be the key here, so we have to work together with local governments or other nursing care facilities and offer services together with them. So many companies have approached us already because now not so many services that are offered through food. So this is where our strength lies in because we have a comprehensive offering of a wide variety of food and for -- if it's eating out or eating at home, we can provide all the solutions that are necessary and based on AminoScience we have a very extensive insight regulating to health and nutrition. So that's the reason why we are receiving a lot of expectations and we would like to explore many different collaborations with insurance companies and also with the wellness companies, we have started some POCs, the proof-of-concept and we would like to start the verification trial for in next year. So -- we would like to establish platform for food and health solutions service and we are now developing 2 different chains. The first chain is the expanding the customer touch points and have a deeper knowledge about customers. So that's a service aspect. This is for services. We would like to grasp help me and understand the food and -- food history and diagnosis and provide a service that fits the personal needs, that's the platform that we like to develop. The second was the commodity sales platform, which is mainly about monetization. We were not very so strong in the digital channel, so we would like to partner with companies that have a very strong digital company, fulfillment or strong in assembly. So we are currently working together with them. We are still negotiating with them so that we can develop our ecosystem together with these partners. So we would like to come to a solution and come to a decision within this year. So the concept of solution service. So we would like to condition the body and mind every day. So we'll know -- we'll have customers now, their current situation regarding their body and then condition their nutrition intake and also then condition their body. So those are the 3 points that we would like to address in these 3 steps here. And the content of services, first and foremost, people should understand their current state of their body, just through very simple inputs, we will identify their trends of dietary habits and then based on that, what is missing in their balance will be identified and presented to them. And depending on those tendencies or their preferences, the optimal recipes will be provided if the person cooks or if the person does not cook or cannot cook for example, in such case, we can propose delivery of frozen meal as a home delivery service or if the person wants to build up their muscles or improve their sleep or if they want to raise their resistance level, then we can propose some supplements to be intake at night or at morning -- so we would like to develop this in Japan and then we find it to overseas and deploy overseas, depending on the circumstances in each market. So we have to resonate with the food habit in each country and we because we offer many different services in different countries, we know what kind of menu are resonate well with them. So I think we are the only provider who can do this. And this is also going to be one of the important element, which is about the nutritionally balanced meals. Of course, you have some issues with your body. We do understand we are whether we have to change our dietary habit because when you go through a medical checkup, if you are suggestive something, then you have received some instructions regarding your nutritious intake, but you can't do this actually. If you go to a fitness club, you ask what meals you have taken the previous day. We can't do it anyway, so we don't want them to question the first place. But so thinking about your balance of nutrition and thinking about the menu every day, day in and day out, that's so cumbersome. It's totally impossible for us to follow that. And of course -- it's always the sugar control or the salt intake control, it's not going to be delicious anyway. And the volume is insufficient in most cases. So those are the hurdle for people to overcome and of course, people suffering from lifestyle diseases above deep-fried food or meat, so they cannot resist those temptation. So we would like to propose a service that the people don't have to give up all these preferences. So nutritious environment, a complete meal that can be sufficient with just one shot. We can offer 350 grams of meal with -- but then the calorie is only 1/3 of the ordinary meal, we can offer that. And also, we have some original technologies such as the deliciousness technology that I just alluded to. And also, we partner with the company, which offers a very healthy solutions. We reduced salt, but very tasty. 2.3 grams or less of salt, but very rich in taste and also the frozen food technology evenly heated and then very delicious. These are the solutions that we can provide. So we provide many different food materials, we'll start from 20 different menus, but I think we can propose different meals day in and day out so that people can enjoy. So if you can stay out, we prepared some meals for you to try out. So please enjoy later if you can -- if you have the time to stay after this meeting. So we, Ajinomoto Group have steadily supported those people who are going after their ideals or trying to combat their illness. We want them to be positive through their meal food and we would like to support each individual well-being, so that they can enjoy food because the food has power to push people forward. So we would like to convey the happiness of living through food. And I would like to hand over to Masai-san from here. Thank you.

And this is just one last piece for me. So I have presented this slide to you on many different occasions. So I don't -- I won't go into the detail here, but in food and wellness, as Kawana-san mentioned, all these new address -- opportunities will be addressed on the backcast approach. And also based on the forecast approach that I explained to you, we will like to deliver our plan through orchestration, forecasting things, I'm sure we have many more opportunity for us to achieve organic growth. So through the combination of our forecasting and backcasting, we would like to develop our business going forward. Thank you very much for your attention.

This is Kashihara from [indiscernible], thank you. This was for Green area, I am Kashihara. So in the first half, I'd like to talk about the direction and Maeda will take forward -- takeover in the second half. What I would like to communicate to you today is that the Agrosolution business in green food in the new -- using new food system we would like to aim for JPY [ 100 billion ] in 2030 and we like to develop new food system in green food, so that we can have the new food life styles are not alternative and tailored to local food culture and consumer values. And we would like to collaborate with start-ups and speedily establish the foundation and then we like to scale up through networks. And in Agrosolution business through biostimulants, we'd like to improve crop yields and quality and environmental load reduction. And this is this key relationship. In the middle, there is green food. The next-generation food system will be utilized to provide new food lifestyle to develop markets. And in upstream, there's Agrosolution business for agricultural support and livestock feed to reduce environmental impacts. And through those 3 initiatives as an outcome, we'd like to contribute to GST reduction with additional 1.6 million tons. And this is not the reduction of our emissions with our production, but by the replacement of new with the new food system, we can generate this. So this is the reduction effect on the part of customers and the consumers and this is a positive impact and this supports our strength -- this support -- this is supported by strength indemnifies and this is target revenue, JPY 100 billion or more through these businesses and we are providing new lifestyles global B2C on the first and then what we have been working already and B2B plant-based solutions, that is second one. And the third one is in yellow. The cultured meat and precision fermentation or amino acid and growth structure and CRD related to that. The solution business of all this is the third one. And then the fourth one is biostimulant for agricultural Agrosolution business. And then at the bottom is the high value-added feed for livestock. With the combination of those 5, we'd like to cost you to our business. Now I'd like to hand this over to Sumio Maeda. Now Sumio Maeda will take over, talking about green food strategies.

So the current food culture has been diversified and localized and eating more meat. And the food culture has become more affluent, but in terms of environment and health, there are new issues that are coming out. In this context, the alternative protein has been growing significantly for the past 10 years and for example, the plant-based meat, if you look at that, there are still issues in terms of tastiness and nutrition and label of the products. And also, if you include the price levels, if it stays as it is, then it will be difficult to enhance acceptance by consumers. So our greenfield vision is the following, not just a simple replacement of neat meat, but diversified food lifestyle that will lead to the well-being of people and earth is what we would like to provide. And sustainable and co-existent with us, but nutritional -- nutritious and tasty food ingredients will be provided at affordable prices and we will tailor this to individuals preference and also value to succeed the food culture, so that we can contribute to being of the consumers. So as I said, the new food lifestyles that will lead to well-being in order to realize this, the new food system that would substitute the conversion of livestock should be established. What we say -- when we say food system, it may sound unfamiliar, but the most physically it refers to plant basis or cultured meat and fish and other cell basis and the precision fermentation milk and other micro-based alternative protein. And this is the value chain that is shown here. In upstream, the cutting-edge biopharmaceutical and bio science and fine technologies and at downstream by utilizing the vicious technologies, we can provide more highly value-added alternative protein food design food system. Next, please. The most in the R&D plant basis and so basis and macro basis -- this is summary table for these for environmental impact compared to conventional livestock, the impact would be only one-tenth or 100 approximately. So if the alternative protein food that is generated from new food system is going to grow in terms of market, if you can take a look at the left-hand chart, in 2030 compared to 2020, in terms of weight, it is going to be fivefold and the amount will be JPY 28 trillion in value. And in the right chart shows sustainability survey result in 6 countries in food, including Japan. So between 2019 and 2022 for the 3 years, so those who responded that they would choose sustainable items intentionally even if they are more expensive or if the price is the same, they will choose sustainable items. Those who responded this way have been increasing between the '19 and 2022. So this is expected to increase further. So the market is expected to grow in a [ cumulative] start. Now how are we going to ensure that new food lifestyle would spread in the world? So plant basis would be the first starting point, but by collaborating with start-ups, we would like to establish the business foundation rapidly and then subsequently, we'd like to take advantage of a global basis of a company to scale the business. So I talked about strategies in terms of time frames earlier, but let's take a look at geographic access. So other than plant basis, there's no expense of eating those items, so it comes to manufacturing selling those items. We have to obtain licensing and permission in each country. But in Singapore, cultured meat and the micro-based new food system has been granted with permission proactively and consumers in Singapore are relatively speaking more receptive to what is more best. So I would like to start with Singapore in providing new products and having communication. And in other regions, in the food laboratories in each region, we'd like to develop applications that will be tailored to the food culture in each country, so that we can deploy this globally through new core subsidiaries.

From here, I would like to give you some recent examples for each food system, so that I can give you some deep dive. So plant-based first. This is the market trend for the last 3 months, 3 years. The horizontal access, the 3-year period and the vertical access to growth rate of the last 1 year is plotted in that way, so you can see the trend of each category. The daily category and the eggs, they have shown a steady expansion. But on the other hand, the meat and cheese that drove the growth so far has shown a slowdown of growth. This category was crowded with many different players. And the slowdown was caused by the fact that those are expensive, but not really delicious and those are still sold in the market. So going forward, delicious products at affordable prices, only those companies who can supply them are likely to survive in the market. And as I just mentioned, in terms of prices, in terms of quality, plant-based food has so many issues to address. But in our case, Ajinomoto, we are providing integrated solutions through plant down set. And through this, we would like to contribute to improving the quality of plant-based food and solve social issues. Actually, up until now, within plant-based, we have focused on the mid customers and propose the value of seasoning and also the enzyme. But as you can see on the left-hand side going forward, not only proposing new raw materials, we would also like to introduce contract manufacturers and provide manufacturing support and also joint development with us. Through these activities, we would like to provide a one-stop solution and thereby enhance and evolve our activities. So as I mentioned earlier, going forward, growth is expected in the plant-based dairy products. We would like to expand the scope to cover these products as well. So by early next year, we would like to launch a new product that has an effect to reduce the off flavor coming from bean. And this is the case of Japan. Actually, in our case, we have participated in the capital relation with [ DICE ], which is a company that is developing and manufacturing and selling being based plant meat. So in addition to their starting technologies, combined with deliciousness technology, they were able to create a very delicious plant-based need. And this is already adopted for mid [indiscernible] of 7-Eleven Japan. And after this, at the networking session, we will serve you this Onigiri and also the rolls here and so that you can try out how this taste. And here, I would like to talk about the cell based, i.e. the need cultured meat related business, which produces meat materials by culturing and cultivating cells. In the value chain, selling the cell itself and also the culture media or amino acid included in culture media, there are players who are selling them for the cultivation support and also food production, food processing. We have all these different potential, but in any event, all of these area poses our strength. So we -- because we can leverage our AminoScience technology there. So we have to discern which model we should participate and we have participated in the capital relationship with Super Meat, so we would like to co-create together with them. So it's not that we are going to offer just alternative meat, we would like to deliver social value and consumer value through the offering of new products here. And -- this is the case of microbial product, micro-based example. In May of this year, we have entered into a strategic alliance with Solar Foods, a start-up in Finland, using what is called Solein, which is microbial-protein produced using CO2. We have decided to roll out the healthy and delicious food in Singapore mainly, so that we can propose a new lifestyle of food that can contribute to environmental impact reduction through daily activities. We do not have anything to -- for you to try out today, but we have provided some powder, so please look at it later. So this is going to be my last slide. Up until now, we have taken initiatives to develop new food system and we talk so much about the material and technical development. But in order for us to permit and the new last -- into the new society, it's not that we have to offer -- we have to offer not only the alternative solutions, but also have to offer new values and new experiences. When you look at the consumers, maybe these new products are well accepted by the Vegan people, but how to cultivate and demand among the general people unless the demand is there. I think it the -- it won't be accepted at the distributors. So we have to provide incentive for those that distributors will continue to handle these products and how to visualize the environmental impact to the product. So we have to consider this together and if we are successful and that I think the penetration will accelerate. So this cannot be done by a single company alone, so we would like to work together with all these partners and lead this discussion. That's all for myself. Thank you very much for your attention.

Thank you very much. The biostimulant, I would like to explain about the agri solution business. So, food, nutrition support supplements and you need -- this yield will be improved and you can reduce the environmental impact by 25%. And also nutrition and tastiness will be improved, Italy, in Spain will be considered as a growth driver. So this is the road map for growth. Products that are climate change resistance and also quality improvement and soy -- bio. We're using this, we would like to further enhance our environmental impact reduction technology. And also working together with our food business, we would like to provide agricultural producers that are good for health and also healthy and also delicious. Also, as for the solution business for the [indiscernible] and cattle, beef, we would like to talk about how we can contribute to reducing the impact. AminoScience balanced feed called [indiscernible] is used as the protein utilization efficiency will increase. So, in order to increase and also the excessive emission will be reduced and therefore, the 24% reduction of nitrogen emission is reported for manure. So this is going to be a new animal nutrition business that is not commodity and these are the new businesses of livestock that we would like to offer to in order to deliver new value. And this is highly evaluated by global dairy companies. And the last slide, this is about the livestock feed business that can reduce the low environment business. We have also made a press release that we have started the carbon credit initiative together with [ MAG ]. So the [ GHG ] gas reduction from the mill calls through amino acid fee. We have been working together with MAG and also the farmers and this not only MAG, but also the primary producers or farmers can understand the benefit of environmental contribution and we would like to accelerate its social implementation and that's all for myself. Thank you very much for your attention.

Thank you very much, Kashihara-san and Maeda-san. We would now like to move on to the Q&A session for the second part of today's briefing.

[Operator Instructions] Thank you. [ Takashimaya-san ] please, you raised the hand.

I'm Takashimaya from Mitsubishi UFJ. I have a question on green business. The philosophy that I'd like to ask about, first of all, in 2030, the market scale on Page 9, you have shown us market forecast. So other 91, the plant basis and cultured meat, if there is any breakdown in this total market, please share that with us. Now I would like to ask you in particular about is that in the cultured meat, what is the strength that you have that you can take advantage of? For example, in the culture media, technologies and cost, I think are the major issues. So your bioscience technologies can be used, but how can you contribute to the market, if you can give us your thoughts on that now?

First of all, in this market, this includes plant basis and cultured meat and this is the total that is shown here. And I can't give you any specific numbers, but the majority is from the plant basis, but it is about 7 years away. And the cultured meat, depending on the progress in granting permission this could progress more. And in 2040 and 2050, in the last time, so when the presentation was made, Shiragami said that the cultured meat would increase its presentation -- representation in this total market. Then with regard to cultured meat, [ Ninomiya ] will answer the question. As for cultured meat, it is based on the regenerative medicine technologies. And on Page 15, as you can see, the regenerative medicine cultured media know-how that we have and providing Amino acid which is the basis for cultured meat at affordable price and polymyxin which is the system to produce [indiscernible] and we have that technology and growth factor can be produced at a lower cost. That is one of the capabilities that we have. So through these capabilities, we can make contribution. And another thing is that once those cultured and how can you convert them into meat and make it more tasty, well deliciousness technologies can contribute there.

Then follow-up question. The same green business material, Page 5, you're aiming for JPY 500 billion or more in 2030. So if you have the breakdown by geography, for example, in Japan or in U.S. and Europe and Southeast Asia, if you can give us your breakdown in the ballpark numbers, that will be appreciated.

Well, for this schematic, in terms -- at present biostimulant, there was A2A company in Spain that is handling this. And this is a company that we acquired and there's a certain level of revenue that is being generated. But other than that, amino acid fermentation by product. For example, in Brazil, sugarcane field and coffee farmers are the ones that we provide this too. So fermentation production plans, if there are those plants, then you can take advantage of those bi-products. So we have been starting these businesses up and in '22 and 2030, we have this internal numbers. And with specific targets, we believe that we can expand more and we will focus on these areas. And there is Agri Summit that was held the other day in Spain. And first of all, producing their synergies and learning from each other, by doing so, we will provide values to farmers that's what we believe that we can -- so we would like to expand this in this context.

Saji-san, the floor is yours.

Yes, I have a question regarding Food and other, I have 2 questions there. One is about Slide 6, in 2024, April in the reorganization to consumers first that you're going to have a reorganization reform to get back to the growth in Japan. So why did you make the decision at this time? And how will this lead to getting back to the growth track. Can you elaborate on that point? That's my first question.

As you can see on this Slide, in April 2022, we have conducted a major organizational change. Up until then, the domestic B2C was done through the home business and also overseas was overseen by the global food business. So, we this time around, we eliminated demarcation between overseas and Japan. So the food and nutrition businesses were created as a result of that. So of course, they fulfill their functions to some extent -- to a certain extent, but the B2C business, as I said earlier, the B2C business, we wanted to integrate them on a global scale and I think that's worth a trial. But as I mentioned for many times this around, the B2C food business is about challenging the food culture in each different country. So rather than global, I think it's more rational to look at things from local perspective. So -- and back then, another important point was that we also made a decision that we are not going to focus only on the plan, but still Japan is very important. So because Japan is one of the countries forming the globe, so we have decided to look at things from a global local lens. And also the co-ordination between our production and also sales by dividing these into 2 businesses, the food production is done at Ajinomoto [ Sokohin ] in Japan, but this was overseen by multiple division. So having a different communication line, this orchestration did not function properly when the utilization rate goes down. So this operational transformation was something that we wanted to address at the same time. So there are many different rationales behind this, but those were the 2 major reasons behind this reform. So basically, so the B2B business is the focus. As you can see on Page 5, food and wellness advancement evolution, yes, yes, of course, B2C is something that we will look at from April onwards. But B2B, we have 2 divisions under this solution and ingredient business and also the sweetener business. So this will also be integrated into a similar organization. And of course, Japan is just part of that. One country among that -- did I answer your question?

And also another question is that on Page 17, the new business model on the right-hand side, specifically, I think you will narrow down and have set a number that when other people spending JPY 100,000, I'm not interested in the number per se. So I'm rather focused on the products and services. What is the proportion behind of them? And also for the services, what is the billing plan? What kind of solutions are you going to provide? And what is the billing plan, I'm not really talking about the unit price, but what is the projected billing system that you are contemplating right now? So I'll try to answer that question. Well, the -- this is the integration of services and also the sales of commodity, but the monetized point is the sales of products like right now, the food log dialog, this application is now available. We have also the menu service application. But basically, not really many companies are generating profits through these subscription or the bidding plan. So we have the commodity sales, product sales and these are functioning as a solution. So for example, like delivering our frozen meals, the accusation cost could be quite expensive like JPY 10,000 per one subscriber. Then marketing cost is spend in that way. But for that math, this is going to have a toll on our solution service, but I think this is not really a monetized point, but we would like to rather offer this as a service. So service will be used as a hook and then you try to make money out of the commodity sales -- that's the plan. Yes, correct.

Takagi-san, please.

Takagi speaking. So one question. There's a lot of information provided today and I'm appreciating of that. But is it really possible to monetize all these? So if that happens, then Ajinomoto's food business was very being transformed. But when are you going to be able to monetize this? And I assume there are several milestones that you have in light. So including the challenge that you have in mind, can you share your thoughts with this. Can we focus on Food & Wellness or Green?

Yes, in the Food & Wellness business, at this moment, as Masai said, the forecasting and backcasting approaches, how can we coordinate all these and to what extent that is easier said than done. So it's really difficult. So this is on the extra business management and you have to do the evaluation and also exploration. And if you look at the population of people, human beings, I think this is coming from the monkeys world. There is a Boss monkey and there's a team underneath. And in order to protect yourself from external adversaries, it is a really good system, but if you are limiting yourself within that world, then you cannot grow. However, on the other hand, between these worlds, monkeys worlds, if there is a coordination created, then you can provide a lot of different value. So that is about a fusion of backcasting and forecasting. And in this -- the fusion of leaders is really, really difficult. So if you talk to any company, there's a silo-based organization and horizontal co nation across silos provide products and services that will meet the values of the customers, it's really difficult. So we'd like to take on this challenge in our own unique way and that is going to the key. And what is important in this is the amino size that we embrace, so we would like to use this as a starting point to have a co-ordination horizontally and vertically. And how -- to what extent we can have coordination between forecasting -- backcasting, that is the challenge that we are now undergoing. So this has been a weakness of our company. So our pioneering spirit and the new value-oriented approach that we already have in Ajinomoto has been a bit weakened. But if you do the product development, to some extent, then in a single year, you can protect and ensure some sort of profit, maybe revenue and profit will only decline by 1 percentage point. So this is the kind of activities that we have been engaged in for quite some time. But what is the real challenge that we can identify and then improve upon that. From that sense, as Masai said, what we need to do is the orchestration and backcasting and forecasting. So in other words, so the fusion of leaders within the company and also fusion in your coordination and partnering with external parties, those are the important points. Is that what you're saying? Yes, in terms of product development and business expansion, I think that is where Japanese companies are struggling and that has led to the -- stall the growth and that is root cause. And if there is this owner-owned businesses and if they have the leadership, strong leadership, then they can improve upon that. And in the Western companies, the top management can lead us. But if the top management efforts alone, can we realize leap-forward -- leapfrog growth, no. The people in the field have to be able to have challenging straight and take on challenges individually, I think that will bring us more growth and that is what we are trying to do.

So you are trying to bring the organization to that system in your efforts, to what extent have you made progress along the way? Is it still a long way to go?

Well, in the 2030 road map, we have had some interim discussions on that point. But I think we are 60% to 70% along the way. But compared to the vision in 2030, there's still 30% to 40% to go.

Thank you. We are running out of time. Any further questions? Yes, thank you. I see a hand over there.

JPMorgan Securities. My name is Yoshida. I have a question, a large question. Based on your response right now, you said that you are going to address this major strategy change organization change that you had not done before. Compared to other food companies, it seems that you're having a very extensive discussion inside the company, which is reassuring. But then what about the existing business, I think I'm still interested in your existing businesses. So we're looking at these strategies, of course, it is very important for you to deliver good results for your existing businesses. So in Food & Wellness growth strategy, reduced salt products, JPY 7 billion to JPY 15 billion, you said would be the sales ambition target for 2030. But your slogan is that to extend the healthy life span through reduced salt. So with this JPY 15 billion sales, out of your total sales of the company, it's less than 10% of your total revenue. So what do you think about this target? Is this adequate? That's my question. And of course, this is very important in terms of ESG in terms of sales proposition, but this is going to be very important element for your unit price increase strategy. So your unit price initiative for the existing businesses, can you elaborate the progress there?

I'll try to give an overview and somebody else might supplement my comments later. Regarding organic growth, organic growth of 5% or so can be done in terms of monetary amount, of course. The reduced salt product and also the high protein product, they offer -- they are still limited in terms of the total size of the business, but we are steadily increasing pricing -- prices, while making at most efforts for our cost reduction. So I think we are building up our capacity in this regard. I traveled to Vietnam last week. Vietnam at one point of time were overwhelmed by the flavor, seasoning, flavor seasoning by the competitors, but we have been able to overcome that. We have established a pattern to do this, the frozen food in states, well, I'm sure we have worried you, but we have the PDC margin visualization and the production cost improvement to turn the situation around. We did not have a short-sighted approach, not only focusing on a single year performance. We made brand investments and so forth and all the brand leaders and also the local members who are quite enthusiastic about that and also the regional headquarters and headquarters provided their support. So we have formulated a pattern of turning things around. Of course, there are many things that we are still insufficient, but as far as organic growth is concerned, I think we shall be able to achieve steady growth in our existing businesses. So amid that, in addition to that, that we will have to add the backcasting approach on top of this. With that, I think that we shall be able to drive and realize the growth that we have presented to you. But still, we are only at 70%, 60% progress towards our ambition. So we have to flexibly and swiftly implement our necessary measures in order to achieve our target. Anything to add, my colleagues?

Yes, regarding reduced salt product, these numbers here actually are very conservative. Actually, in the package, several percentage -- so reduction is only built up are included here. The frozen food that I'm responsible for [indiscernible] products, these are reduced in terms of a short amount quite significantly and this has resonated with the customer. So if those are included in these numbers, the number can actually double. So this accounts for only those that are written on the packages. But actually, the nutrition component has improved significantly and they are delivering good results already. So there are actual numbers behind this.

Thank you very much. Let's get together afterwards. So if you're staying on to the party, so we like to continue with exchange reviews at that session. So like to close Q&A session at this time? Mr. Fujie, if you can give your closing remarks?

Thank you very much for joining us out of your busy schedule today. First of all, there have been great learnings that I have experienced myself. In the exchange of views, there are things that we have failed to do sufficiently. There are several that I have realized myself, so I'd like to continue to make evolution to meet the needs of your expectations and I would like to enhance the IR activities like this, that's what I heard. And the 2030 ASV to that and we have been refining road map and we are still 60% -- 70% along the way, but we'd like to refine this further, so that we can enhance the capability of execution and continuously on a leafed manner, we like to continue to grow the business and that is the responsibility that I am determined to do once again. I have to renew the determination. The third part is just limited to those of you who can stay on for the party. So there is a trial meals tasting that is being provided. So, Oshinko is collaborating with us and lunch box, so [Tera box] is really tasty. So I hope you can try this out. And today, including the staff members, the younger generations and also middle based personnel are joining us as the top management. And I hope you can feel what their thoughts and feelings are as you get together in the party. So the level of energy has been really, really burning with a flare and being heightened. So, IR activities like this will have to be evolved further. And as I say always, when we -- but across what we wanted to communicate is really only the time that we have been able to communicate. And with that in mind, we would like to continue to evolve in IR activities as well. Thank you very much for today, once again.

With that, we would like to conclude today's briefing. Thank you very much for staying with us until the end. Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]