Orion Reports Operating Profit of 327.3 Billion KRW Last Year... Largest Since Establishment

Korean Subsidiary's Operating Profit Surpasses 100 Billion Won for the First Time
Snack Products Gain Popularity in China, Exceeding Pre-THAAD Levels

[Asia Economy Reporter Choi Saeng-hye] Orion Group announced on the 5th that Orion recorded consolidated sales of 2.0233 trillion KRW and operating profit of 327.3 billion KRW last year, achieving the highest operating profit in its history. Sales grew by 5% and operating profit by 16% compared to the previous year.

The Korean subsidiary saw sales and operating profit grow by 2.9% and 17.0%, respectively, as new products in the snack, pie, and biscuit categories gained popularity despite challenging conditions. Notably, operating profit surpassed 100 billion KRW for the first time, setting a new record for the second consecutive year. The re-launched ‘Chicken Pop’ led the newtro trend and gained popularity, while differentiated new products such as ‘Chal Choco Pie’, ‘Dr. You Protein Bar’, ‘Digest Thin’, and ‘Poca Chip Spicy Soy Sauce & Roasted Garlic Flavors’ also drove growth.

In particular, the ‘Dr. You Protein Bar’ became an essential item for health and home training enthusiasts, selling over 10 million units within eight months of launch. Celebrating the 45th anniversary of Choco Pie, ‘Chal Choco Pie’ continued its popularity by selling out immediately after production. The ‘Moist Chocolate Chip’, increased in quantity as part of the ‘Good Packaging Project’, showed strong sales growth, marking its second heyday. The cost-effective Market O Nature ‘Oh! Granola’ and new flavors ‘Cacao’ and ‘Strawberry’ also sustained popularity and supported growth.

This year, Orion plans to strengthen its lineup of confectionery new products to expand market share while actively launching new businesses to create new growth momentum. The strategy focuses on rapidly establishing the premium mineral water ‘Orion Jeju Yongamsu’ in export markets, online home delivery, B2B sales to companies, and duty-free shops. The convenient meal replacement Market O Nature ‘Oh! Granola’ will expand its product range, and the ‘Dessert Choco Pie’ will be sold in convenience stores to actively target younger consumers. The growing protein product line will also be diversified to maintain growth.

The Chinese subsidiary achieved sales and operating profit growth of 4.4% and 12.0%, respectively, thanks to successful new product launches, new store openings in South China, recovery of shelf share in existing retail stores, and expansion of online channels. Cost efficiency, direct transactions with large mart channels, improvement of small business sales networks, and innovations in sales and logistics structures pushed the operating profit margin beyond 16%, surpassing pre-THAAD crisis levels. New products from existing snack power brands such as ‘Haoyouchu’ (Swing Chip), ‘Ya! Tudou’ (Oh! Potato), and ‘Shuyuan’ (Yegam) received positive responses and drove sales. Jelly new products like ‘Guoziguozi’ (My Gummy), ‘Nuniudawang’ (Wang Kkumtuli), and the newly launched ‘Xylitol EX Gum’ also maintained popularity. Additionally, since signing an exclusive sales contract in October, Orion began full-scale sales of Thai Tao Kae Noi seaweed snacks from November, creating additional growth drivers.

This year, Orion plans to actively launch Korean power brands such as ‘Ojingeo Peanut’, ‘Chicken Pop’, and ‘Chal Choco Pie’, while introducing new products like seaweed snacks and rice crackers to further strengthen growth. Sales of ‘Orion Jeju Yongamsu’ will also be ramped up. Starting in March, the product will enter offline channels in Guangdong Province and other South China regions, and by mid-year, it will be introduced in the local number one coffee chain ‘Luckin Coffee’, focusing on capturing the global water market.

The Vietnamese subsidiary achieved record sales and operating profit, growing by 7.9% and 16.5%, respectively. New products tailored to local consumer preferences and the ‘Good Packaging Project’?which increased the quantity of ‘Osta’ (Poca Chip) and ‘Swing’ (Swing Chip) by 20% without price changes?led to sales growth of approximately 34% and 19% year-on-year, respectively, dominating the Vietnamese snack market. Newly pioneered categories such as rice crackers ‘An’ and mass-produced bread ‘Ssebon’ gained great popularity, becoming new growth engines. Aggressive store expansion in new distribution channels such as large marts and convenience stores also supported strong performance.

This year, Orion plans to aggressively launch new flavors of ‘Osta’ to enhance the brand power of fresh potato snacks. It will also expand market share in the rice cracker and mass-produced bread markets it successfully entered, while continuously expanding product categories such as jelly and cookies to further strengthen its dominance in the Vietnamese confectionery market.

The Russian subsidiary achieved high growth with sales and operating profit increasing by 19.2% and 55.5%, respectively, thanks to the expansion of the Choco Pie lineup and successful launches of new products such as ‘Goute’ (Gosomi) and ‘Moist Chocolate Chip’. The restructuring of the sales network to improve profitability has been completed, establishing a solid growth system.

This year, Orion plans to further strengthen Choco Pie sales, which successfully expanded its product lineup with ‘Choco Pie Dark’ and ‘Choco Chip Choco Pie’, solidifying its leadership in the pie market. It will continue growth through product diversification including biscuits and snacks. Active market entry of Tao Kae Noi seaweed snacks will also be pursued. Additionally, investment in a new factory in Tver will continue to lay the foundation for targeting the European market.

Last year, Orion established a sound financial structure and laid a stable foundation for expanding existing businesses and launching new ones. All subsidiaries achieved sales growth while maximizing operating profit through operational efficiency and cost structure rationalization. Based on increased profits, Orion fully repaid early-stage business investment loans of overseas subsidiaries in China and Vietnam, significantly lowering the debt ratio to 47.0%, well below the standard 100%. This is 15.7 percentage points lower than the previous year. With this sound financial structure, Orion has secured sufficient strength to expand existing businesses and pursue new business initiatives going forward.

An Orion official said, “In 2019, we achieved the highest operating profit in history through aggressive new product launches and business structure innovation and efficiency both domestically and internationally. This year, we will continue healthy growth by strengthening product competitiveness and successfully executing new businesses, while building a profit- and efficiency-centered management system.”

This content was produced with the assistance of AI translation services.