**Investing 830 billion won to expand global production capacity: The largest investment by a domestic food company recently**
“Doubling production in countries like Russia… Establishing a mid-to-long-term foundation for reaching 5 trillion won in sales.”
On the 15th, Orion announced plans to invest 830 billion won to establish a global mid-to-long-term growth foundation with the aim of achieving 5 trillion won in sales and 1 trillion won in operating profit. This is the largest investment by a domestic food company in the past five years.
Orion held a board meeting on this day and passed a resolution to invest 4600 billion won in building an integrated production, packaging, and logistics center in the Technopolis Industrial Complex in Jincheon County, Chungcheongbuk-do. The Jincheon integrated center will be built on a site of 188,000 square meters (approximately 57,000 pyeong), equivalent to 26 soccer fields, with a gross floor area of 149,000 square meters (approximately 45,000 pyeong). It will act as a one-stop production base connecting production, packaging, and logistics. The construction is scheduled to start in mid-year with a target completion date in 2027, and it will handle product supply for both domestic and export markets. Upon completion, the Jincheon production plant will increase domestic production capacity to a maximum of 2.3 trillion won.
The construction of the Jincheon integrated center will utilize dividends received from the company’s subsidiaries in China and Vietnam. Orion has been receiving domestic dividends from overseas subsidiaries since 2023, with around 290 billion won expected this year. The accumulated dividend amount over three years is projected to be about 640 billion won. Orion has stated that it will use the overseas dividends as a resource for investing in the food business and expanding shareholder returns.
Orion is also increasing investments in high-growth overseas subsidiaries in Russia and Vietnam. The Russian subsidiary has seen double-digit growth in local sales volume for six consecutive years. Despite the current plant operating at over 120% capacity, there is a shortage of Choco Pie supply, leading to the decision to build a new plant wing within the Tver plant. This new construction comes three years after the Tver plant was first operational in 2022. The total investment amounts to 240 billion won, adding 16 production lines for pies, biscuits, snacks, jelly, and more. Once the investment is completed, the annual total production volume is expected to double to about 750 billion won, further accelerating the growth of the Russian subsidiary.
The Vietnamese subsidiary has been experiencing high growth annually, surpassing 500 billion won in annual sales last year. Given Vietnam’s significant growth potential, an investment of 130 billion won is planned to further solidify its position as the leading food company in Vietnam. Initially, a new factory wing within the Hanoi Yen Phong plant will be completed in the second half of this year, and with the expansion of the rice snack line, the company aims for aggressive market expansion. Rice snacks, launched six years ago, are on the verge of achieving the number one market share this year. In addition to new products like candy, additional production lines for existing products such as pies and jelly will be expanded sequentially, with a plan to increase production capacity to 900 billion won. Construction for a logistics center and packaging plant at Hanoi’s third plant will start this year, aiming for completion in 2026.
An Orion representative stated, “Since our first overseas expansion in 1993, we have completed a virtuous cycle of growth-investment-growth over the past 30 years, becoming a bona fide global company with over 65% of sales from overseas. All our overseas subsidiaries, as well as our domestic operation, continue to grow yearly, and we plan to solidify our mid-to-long-term growth foundation by expanding production capacity.”