[Samyang Corporation’s 90% Stake… Export Diversification Strategy]
[Herald Economy = Reporter Jeong Seok-jun] Samyang Foods is set to establish its first overseas factory in China.
According to the Financial Supervisory Service’s electronic disclosure system on the 17th, Samyang Foods announced the previous day its plan to “establish a production subsidiary in China and build a local factory to conduct business there.”
Samyang Foods plans to invest 64.7 billion KRW by establishing Samyang Singapore Private Limited, which will serve as the headquarters for its overseas business operations. Following this investment, Samyang Foods will hold a 90% stake in Samyang Singapore Private Limited.
Samyang Foods stated that the investment is intended to establish a base for its foreign market expansion and further added that specific details on the establishment of the Chinese production subsidiary will be disclosed later.
This marks the first time Samyang Foods has decided to build a factory abroad. The move comes in response to a surge in international demand for their Buldak Bokkeum Myun (spicy chicken noodle), prompting consideration for an overseas plant to boost production capacity.
Last year, Samyang Foods reached an export value of 809.3 billion KRW, which is nine times its 93 billion KRW in 2016. During the same period, the share of exports in overall sales rose from 26% to 68%.
China accounts for 25% of Samyang Foods’ exports. Products exported to the Chinese market are currently mainly produced at Mil-yang Plant 1.
Since March, Samyang Foods has been constructing Mill-yang Plant 2, which is expected to produce goods for the American market. Even after completing Mil-yang Plant 2 in the first half of next year, Samyang Foods anticipates a supply shortage by 2027.
Samyang Foods hopes that once the new plant in China becomes operational, the output from Mil-yang Plant 1 will be exported to the United States and European markets.