The Group's Relationship with Business Partners

The Ajinomoto Group Basic Purchasing Policy establishes principles of compliance and corporate ethics in purchasing transactions in order to ensure that procedures are carried out properly and fairly based on the Ajinomoto Group Standards of Business Conduct. The policy is explained to suppliers to gain their understanding and cooperation, which facilitates its application throughout the supply chain and fulfill the social responsibility of the Ajinomoto Group.

The Ajinomoto Group Basic Purchasing Policy

In order to ensure fair, open, transparent and simple purchasing and to secure the trust of customers and stakeholders, the Ajinomoto Group shall perform its purchasing operations rationally, in compliance with laws and regulations, and fulfill its agreements in cooperation with suppliers and other business partners.

1. Compliance, Purchasing Ethics

• The Ajinomoto Group shall act with good judgment, complying with the purchasing-related laws and regulations of all countries concerned, as well as the Ajinomoto Group Standards of Business Conduct and other related standards.
• The Ajinomoto Group shall fulfill its agreements with suppliers and other business partners in good faith when purchasing.
• The Ajinomoto Group understands the significance of information it obtains through trade and keeps such information confidential.
• The Ajinomoto Group shall perform purchasing using fair, open, transparent and simple procedures.

2. Purchasing Principles

• Transaction prices shall be fair and economically reasonable.
• Suppliers and other business partners shall be selected based on the comprehensive evaluation of price, quality, delivery timing, technology, safety and past results. In the case one is not selected, upon request, the Ajinomoto Group shall explain the reason it was not selected.
• Purchasing shall in principle be decided based on the results of comparing multiple estimates such as tenders.
• The Ajinomoto Group shall in principle be open to new partner candidates. Candidates that meet selection standards shall be given the opportunity to go through a proper evaluation.
• The Ajinomoto Group shall promote cost reduction in cooperation with suppliers and other business partners in accordance with previously-defined assessment rules.

3. The Practice of Corporate Social Responsibility (CSR) in Purchasing

• Purchasing of raw materials and other products shall be in conformity with laws and regulations related to the quality and safety assurance of products, the Ajinomoto Group Quality Assurance Standard, and all the other related laws and regulations.
• For the purpose of environmental conservation, the Ajinomoto Group shall promote green procurement in accordance with the Ajinomoto Group Green Procurement Guidelines.
• The Ajinomoto Group confirms that the products it purchases directly are free of any connection to the violation of human rights, including child labor and illegal employment, during either production or distribution.

4. Requests to Suppliers and Other Business Partners

• The Ajinomoto Group requests suppliers and other business partners to understand the Ajinomoto Group Basic Purchasing Policy and cooperate as members of the supply chain.
• The Ajinomoto Group requests suppliers and other business partners to comply with laws and regulations, and issues especially strict cautions with regard to such acts as inhibiting free competition by fixing prices, etc.
• The Ajinomoto Group requests suppliers and other business partners to make efforts to suggest economically reasonable rationalization and other ideas.
• The Ajinomoto Group requests suppliers and other business partners to understand CSR-based management and to cooperate in the quality and safety assurance of raw materials, green procurement and protection of human rights.

Initiatives in Fiscal 2010

Activities to ensure full application of the Basic Purchasing Policy at all group companies

Initiatives with suppliers to ensure quality, environmental friendliness, safety, and CSR practice

The Ajinomoto Group carries out quality audits to assess its suppliers' understanding of the requirements of the Ajinomoto System of Quality Assurance (ASQUA). Ajinomoto Co., Inc. began the Supplier Partnership Program to strengthen relations with suppliers in the food products area. For example, the company is promoting activities such as sharing and discussing information with suppliers during quality audits regarding the environment, safety and food defense, in addition to usual quality assurance matters.

As a part of its environmental efforts, Ajinomoto Co., Inc. has initiated activities to maintain stocks of skipjack, one of the most essential resources for the company, as a sustainable ecosystem service, in collaboration with fishermen and producers of dried bonito flakes.

From the standpoint of human rights and labor issues, Ajinomoto Co., Inc. has carried out surveys at the group companies in every country where it operates to determine whether child or forced labor is being practiced. Meetings with suppliers on the issue have been held during site inspections. Through these activities, the company has found no evidence of child or forced labor. Nevertheless, it intends to continue placing demands on suppliers in the future in order to fulfill its social responsibilities throughout the supply chain.

Quality audits of raw material suppliers

In fiscal 2010, the Ajinomoto Group Procurement Center conducted audits of 62 suppliers of raw materials and 46 suppliers of packaging materials. Meanwhile, Calpis Co., Ltd. carried out 16 audits of suppliers of raw materials. Ajinomoto Frozen Foods Co., Inc. conducted audits of a total of 226 manufacturing subcontractors and raw material suppliers through its Supplier Inspection Department, Purchasing Department, and Quality Control Department. A conference with these suppliers on March 25, 2011 was planned by the company to share information on raw materials quality, but the event was canceled in consideration of the aftermath of the Great East Japan Earthquake that struck on March 11.

In addition, the Ajinomoto Group Procurement Center conducted 11 joint audits under the Global Supplier Management program with suppliers of Ajinomoto Group companies outside of Japan.

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