Orion Signs Investment Agreement for New Factory with Tver Region, Russia

From the left, Igor Mikhailovich Rudena, Governor of Tver Oblast, Russia, and Park Jong-yul, CEO of Orion Russia.

[Asia Economy Reporter Choi Saeng-hye] Orion announced on the 10th that it held an investment agreement ceremony on the 9th (local time) at the site of a new factory located in Kriptsova, Tver, Russia.

The agreement ceremony was attended by Park Jong-yul, CEO of Orion Russia, Igor Mikhailovich Rudena, Governor of Tver, Russia, and key officials. Orion plans to invest 5.127 billion rubles (approximately 80 billion KRW) over the next three years to build the new factory. Both the design and construction companies were selected from local Tver businesses, and the plan is to contribute to the regional economic development by creating jobs for local Russian residents.

Currently, the Tver provincial government is very actively supporting this project. They have promised to assist with various utility supplies and smooth processing of permits. Additionally, Orion will receive various benefits such as corporate tax and property tax reductions, support for a two-lane road for round trips, and the construction of bus stops and pedestrian bridges to facilitate transportation for factory workers.

Orion will build a new factory on a 152,252㎡ (approximately 46,056 pyeong) business site in Kalininsky Kriptsova, Tver, with a total floor area of 42,467㎡ (approximately 12,846 pyeong) to expand sales in the Russian market. Construction began in July with a target completion date in 2022. The factory will install six lines for Choco Pie and biscuits and two lines for snacks. Upon completion of the new factory, the existing lines at the Tver factory will be relocated and installed there.

Orion announced plans to build a new factory in Russia in 2017. Before starting construction, the site was changed to Kriptsova considering factors such as site expandability, logistics infrastructure, and convenience for local hiring. The current factory, for which the investment agreement was signed, is more than four times larger than the existing Tver factory, and production capacity is expected to increase up to 10 billion rubles (approximately 150 billion KRW).

Orion entered the Russian market in 1993 by exporting Choco Pie. After establishing the Tver factory in 2006, it built an additional production plant in the Novo region in 2008. While Choco Pie and Choco Song-i have gained great popularity, new Choco Pie products and biscuit products such as Gosomi introduced to local consumers have been hits, resulting in sales growth of 26.5% and operating profit growth of 105.4% in the first half of this year alone. After the new factory is completed, Orion plans to expand the annual supply of Choco Pie to over 1 billion units and secure a biscuit lineup capable of producing various products to target the Russian and Central Asian markets.

An Orion official said, “The production capacity of the two Russian factories has recently reached saturation due to the rapid growth of the Russian subsidiary’s sales,” adding, “Through the construction of the new factory, we will not only target the 22 trillion KRW Russian confectionery market but also expand into the Central Asian market.”

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