Continuing the previous article, we take two M&A deals by Japanese companies in 2022.
1. Investment in an insect-based alternative protein manufacturer by Sumitomo Corporation
Sumitomo Corporation announced on 4th October 2022, they have invested in Nutrition Technologies which is a startup manufacturer producing insect-based alternative protein in Malaysia.
Established in 1919, Sumitomo Corporation is one of the top 5 Sogo-Shosha, trading and investing companies in Japan, and their sales reaches approximately JPY 5.5 trillion, and their market capital is approximately JPY 2.6 trillion. Besides, they are the only one Sogo-Shosha with a department named “Animal Health Science Department”, which engages chiefly in animal health product business field for pets and livestock. This department is in charge of this investment and going to develop and distribute insect-based protein feeds utilizing their existing networks.
Nutrition Technology was established in 2015 by former United Nations officers. They have their headquarter in Singapore and also have the largest factory in Asia, which produces insect-based alternative protein in Johor, Malaysia. In that factory, they farm and process black soldier flies (BSF) as substitute of fishery feeds for livestock.
They aim to create a world that sustainably feeds itself through a circular economy. To achieve that goal, they divert industrial waste from landfill by utilizing industrial waste from neighbor factories and plantations for raising BSF, and they distribute oil and frass which are generated from manufacturing process to effectively use for agricultural and livestock businesses. According to the press release of Sumitomo Corporation on 24th January 2022, they will also work to utilize them as materials for developing such as cosmetics, quasi-drugs, chemicals, organic fertilizers etc.i
2. Capital alliance with marketing company by Bridge International Corp.
Bridge International Corp. announced on 24th January 2022, a capital alliance and a business partnership with TK International Sdn. Bhd. which supports Japanese companies entering the ASEAN with marketing support and IT service business.
Bridge International, established in 2002, is a Japanese company with sales of 5.6 billion and market capital of 9.1 billion. They offer services such as outsourcing of inside sales and DX consulting, and also develop systems and tools for B to B sales.
They already have been collaborating with TK International since 2019, and providing outsourcing services for companies which has target market in Asia, but according to the press release on 24th January 2022, this capital alliance aims to enhance digital marketing businesses more.ii
TK International Sdn. Bhd. is an IT company based in Malaysia which support overseas expansion of Japanese companies. They are established in 2014 and has MSC status for ICT companies from governmental institution. They have supported more than 100 Japanese companies in the ASEAN and other overseas markets.
For example, in 2021, they are consigned by Nintendo to distribute development tools for “Nintendo Switch” video game software. Due to Covid, since B to B sales has been digitized, and needs for digital marketing operations and content production support have been growing, this capital alliance is expected to be solutions for those needs, and better services.