2012/05/29

Kao and Ajinomoto to Form Alliance in Health Solutions Business

Ajinomoto to Acquire 33.4% Equity Interest in Kao Subsidiary

TOKYO, May 29, 2012 - Kao Corporation (Kao) and Ajinomoto Co., Inc. (Ajinomoto) have agreed to form an alliance in the health solutions business with the shared vision of helping to create a "society with active seniors" who lead active lives regardless of age. The business will focus on prevention and improvement of metabolic syndrome and the decreased locomotive functions with aging.

As part of the alliance, Ajinomoto has agreed to acquire a 33.4% equity interest in and send directors to Kao's wholly owned subsidiary Healthcare Committee Inc. (HCC).

Background

With the rapid aging of Japanese society, there has been a notable increase in needs among people who want lifelong health. The aging population is also giving rise to social issues such as the growing burden of health care costs for the government and businesses. This has spotlighted the importance of not only treatment of illnesses that have manifested but also routine prevention - especially the prevention of metabolic syndrome (conditions such as hypertension and high blood sugar caused by an excess of visceral fat) and the decreased locomotive functions with aging.

Kao has a vision to better support the lives of active seniors. Accordingly, it has been undertaking consumer research, health care research, and health care product development and sales on the theme of metabolic syndrome in the middle-aged, as well as prevention and improvement of lifestyle-related diseases through QUPiO®, a prevention program that HCC provides for health insurers (hereinafter referred to as "health insurance societies").

Ajinomoto's vision is to be "a group of companies that contributes to human health globally." To promote healthy lifestyles, Ajinomoto has been developing and marketing amino acid-based food ingredients and supplements with health value such as low salt, low sugar and low fat. The company is also promoting its AminoIndex®, a health checkup support service using amino acid analysis.

By leveraging their respective strengths with these measures, Kao and Ajinomoto will provide personalized, comprehensive health solutions for prevention and improvement of metabolic syndrome and the decreased locomotive functions with aging and work toward the creation of a "society with active seniors."

Overview of HCC

(1) History:
2003
Established as a company specializing in developing and providing preventive services
Began providing the "Lifestyle Improvement Program" service for health insurance societies

2008
All company stock acquired by Kao

(2) Representative: Dr. Yuji Furui, President

(3) Businesses:
QUPiO®,* a prevention program for members of health insurance societies (number of user IDs: approximately 1.3 million)
Provides information (websites, booklets) according to individual health checkup results and lifestyle improvement support from a specialist

* QUPiO® is a lifestyle-related disease prevention program developed through joint research with the University of Tokyo using HCC's original health checkup data analysis.

• Analysis and consulting to support the prevention and health promotion programs of health insurance societies
Provides specific proposals on how to smoothly carry out prevention of lifestyle-related diseases based on knowledge obtained from joint research with universities and analysis of health checkup data it has compiled.

Business Scheme after the Alliance and Future Vision of the Health Solutions Business

Until now, HCC has used QUPiO® primarily to provide services for health insurance societies. Going forward, it aims to build a health support platform for individuals within the next several years while strengthening its support for health insurance societies. HCC will enhance its personalized lifestyle improvement counseling (diet, exercise, etc.) by adding services such as provision of metabolic syndrome screening information using Ajinomoto's AminoIndex Technology and appropriate meal menu recipes based on amino acid analysis to its know-how in using data established with QUPiO®.

In the future, HCC plans to develop QUPiO® into a health portal program and expand the number of users from approximately 1.3 million at present to over 5 million by 2020. In addition, it aims to develop the business using QUPiO® as the brand.

Furthermore, to minimize the decreased locomotive functions with aging, Kao and Ajinomoto also plan to carry out joint education programs aimed at maintaining and improving the ability of the elderly to exercise and walk. They will also provide related products and develop a counseling system and work to link these initiatives with QUPiO®.

In the future, Kao and Ajinomoto will consider applying the know-how gained through this business outside Japan.

Ajinomoto's Investment in HCC

(1) Date of agreement: May 29, 2012
(2) Amount of investment: JPY 270 million
(3) Equity interest: Kao 66.6%; Ajinomoto 33.4%
(4) Number of directors: 7 (President: Dr. Yuji Furui, 4 directors from Kao, 2 directors from Ajinomoto)

Reference

Corporate name: Healthcare Committee, Inc.
Representative: Dr. Yuji Furui, President
Location: 1-28-10, Hongo, Bunkyo-ku, Tokyo
Established: June 18, 2003
Main businesses: Analysis and consulting, health information services, contract-based specific health guidance service, etc.

Corporate name: Kao Corporation
Representative: Motoki Ozaki, President and CEO
Location: 14-10, Nihonbashi Kayabacho 1-chome, Chuo-ku, Tokyo
Established: May 21, 1940 (founded June 19, 1887)
Net sales: JPY 1,216.0 billion (year ended March 31, 2012)
Number of employees: Approximately 35,000
Main businesses: Manufacture and sales of detergent, daily essentials, cosmetics, food products and industrial chemicals

Corporate name: Ajinomoto Co., Inc.
Representative: Masatoshi Ito, President and CEO
Location: 15-1, Kyobashi 1-chome, Chuo-ku, Tokyo
Established: December 17, 1925 (founded May 20, 1909)
Net sales: JPY 1,197.3 billion (year ended March 31, 2012)
Number of employees: Approximately 28,000
Main businesses: Manufacture and sale of seasonings, processed foods, amino acids, pharmaceuticals and specialty chemicals