input2023.03.24 14:14
correction2023.03.24 14:54
Nongshim Chairman ‘I will build a 3rd factory in the US’
Following two factories in the west, additional establishments in the east are being followed.
Last year, Nongshim’s US subsidiary reached $500 million in sales
Chairman Shin met with reporters at the regular shareholder meeting held at Nongshim’s headquarters in Dongjak-gu, Seoul, and said, “We will realize the establishment of a third factory in the United States at the end of this year or early next year. ” Regarding the factory establishment area, he said, “We consider the eastern part as a strong option.”
Nongshim currently operates two factories in Rancho, California. The first factory was established in 2005, and the second factory was completed last year next to the first factory, enabling it to produce a total of 850 million ramen noodles in the United States.
The reason Chairman Shin is considering setting up a third plant in the United States is that local demand is growing faster than supply. Last year, Nongshim’s US subsidiary’s sales increased 24.0% year-on-year to $490 million (632 billion won). Considering that the year-over-year growth rate of total foreign sales ($1.243 billion) is 9.0%, the growth in the United States stands out.
If Nongshim builds a third plant in the United States, it will have its seventh overseas production base. Outside the United States, it operates factories in Shanghai, Qingdao, and Shenyang, China. The Baeksansoo factory is also in operation in Yanbian, China.
Nongshim CEO Lee Byung-hak, who chaired the general shareholder meeting, chose global business, improving management efficiency, and diversifying business as three strategic directions for this year. He also revealed that he plans to promote mergers and acquisitions (M&A) that can create synergies such as health functional foods. Last year, Nongshim tried to take over Cheonho Encare, a health food company, but talks broke down after a disagreement over the price.
Meanwhile, Nongshim joined the 3 trillion won club last year. It posted sales of 3.129 trillion won, up 17.5% from the previous year, about half of which came from abroad. Operating profit was KRW 112.2 billion, up 5.6% from the previous year.
Reporter Ha Su-jeong agatha77@hankyung.com
