CJ CheilJedang looks to expand into new overseas markets for growth

[Source : CJ Group]

CJ CheilJedang Corp. is accelerating its overseas expansion as it plans to enter new markets, such as Canada, Australia, Thailand, Indonesia and Malaysia this year as demand for Korean food increases.

“This year will be the key to ensuring new growth engines in four key sectors – culture, platform, wellness and sustainability, which CJ Cheiljedang had chosen as the keywords of its 2030 roadmap,” Eun Seok Choi, chief executive officer of the company, said in his new year’s message to employees according to the company.

Choi stressed the importance of reinforcing its share in the U.S. market with a focus on its seven key products, such as dumplings, processed rice, chicken, sauce, kimchi and seaweed.

CJ Cheiljedang’s overseas sales of food reached 3.78 trillion won ($2.99 billion) in the third quarter of last year, up 19.4% from the same period a year ago. Operating profit was 227 billion won during the same period, up 38.8% year-on-year. The food business sales generated overseas now account for 46 percent of the total food revenues, which will likely increase further to above 50 percent this year.

CJ Cheiljedang has manufacturing facilities in several countries, such as the U.S., Japan and Vietnam.

In Canada, CJ Cheiljedang will promote Asian foods, such as dumplings, with plans to eventually set up manufacturing bases. In Australia, where the export of meat-based products is quite complex, the food maker will likely build a plant to produce dumplings, while working on supplying products to large retail stores.

As Thailand is a market with manufacturing capabilities, CJ Cheiljedang will set a strategy of promoting food products tailored to local tastes, such as spring rolls and dim sums, while using the geographical proximity between Thailand and Vietnam. CJ Cheiljedang will likely tap into cultural content, including KCON, to gain brand awareness in Thailand with many fans of Korean pop culture. CJ Cheiljedang is also expected to set production bases in Indonesia and Malaysia as part of its roadmap that enter halal food market, encompassing from East Asia to the Middle East.

Other food manufacturers have also begun to seek new growth potentials overseas, as the domestic food market has already faced growth limits. Samyang Foods Co. has moved closer to becoming a global food company by creating divisions specialized in foreign sales, marketing promotion and logistics. Koo Ji-eun, vice chairwoman of LG Group‘s catering unit Ourhome, which has seen its overseas corporate sales account for more than 10 percent of the total for the first time in the company’s history last year, focused on expansion overseas in her new year’s message.