K-Ramen Capturing Global Tastes... Big 3 Accelerate Overseas Expansion

Nongshim, Ottogi, Samyang Achieve Record-Breaking Results Last Year
Overseas Markets Drive Growth...Record High Export Volume
Strengthening Overseas Market Expansion Through Production Facility Expansion

As Korean ramen takes the lead in the global spread of K-food, the 'Big 3' ramen companies?Nongshim, Ottogi, and Samyang Foods?all posted strong performances last year. With overseas market achievements driving overall results, the ramen industry plans to 'row firmly while the tide is in' this year by expanding production facilities and more.

Big 3 All See Performance Leap Amid K-Ramen Popularity

According to the Financial Supervisory Service's electronic disclosure system on the 21st, Nongshim's consolidated operating profit last year was tentatively estimated at 212 billion KRW, an 89.1% increase from the previous year. Sales rose 9.0% to 3.4105 trillion KRW, and net profit increased 47.8% to 171.4 billion KRW. Nongshim explained that the increase in operating profit was due to growth in domestic core businesses such as noodles and snacks, as well as overseas business expansion. Notably, the flagship product 'Shin Ramyun' recorded its highest-ever domestic and overseas sales last year, growing 14% year-on-year to 1.21 trillion KRW. In particular, sales through overseas subsidiaries and exports reached 710 billion KRW, accounting for about 60% of the total.

During the same period, Ottogi, a comprehensive food company manufacturing products such as 'Jin Ramen,' saw its operating profit increase 37.3% to 254.8 billion KRW, and sales rose 8.5% to 3.4545 trillion KRW. However, net profit decreased 41.9% to 161.6 billion KRW. Ottogi explained this was due to a base effect caused by the absorption merger of Ottogi Ramen Holdings and Ottogi Logistics Services the year before last.

Samyang Foods also tentatively reported consolidated sales and operating profit of 1.1929 trillion KRW and 146.8 billion KRW, respectively, last year. This represents increases of 31% and 62% year-on-year, marking the first time in the company's history that sales exceeded 1 trillion KRW and operating profit surpassed 100 billion KRW. Samyang Foods attributed the strong performance to increased overseas sales of flagship products such as 'Buldak Bokkeummyeon' last year.

Ramen played a significant role in the strong performances of all three companies last year. Korean ramen proved its heyday by breaking records with exports exceeding 1 trillion KRW for the first time ever. Ramen export value, which was around 467 million USD in 2019, jumped to 603.57 million USD the following year and continued high growth, reaching 924.5 million USD (approximately 1.24 trillion KRW) last year?nearly doubling in the past four years. Additionally, companies producing products overseas mean the actual global market size of K-ramen is even larger than export figures suggest.

Momentum Continues with Production Facility Expansion and New Construction

The rapid growth of Korean ramen is expected to continue this year. K-food's overseas expansion is still in its early stages, and there is a clear trend of increasing demand for cost-effective consumer goods in the global food market, with ramen, which has a relatively low price burden, at the center. The year has started smoothly. According to customs export-import trade statistics, ramen export value last month was 85.74 million USD (about 115 billion KRW), a 39.4% increase compared to the same period last year (61.51 million USD). Export volume also rose 26.1% to 21,231 tons from 16,831 tons in the previous year.

While there is consensus that overseas markets are the key to growth, the challenges faced by each company differ slightly. Nongshim, which first entered the U.S. market by establishing a factory in California in 2005, is expected to focus more on the North American market. Earlier, as product demand surged during the pandemic, Nongshim built a second factory in 2022 to increase supply. With the U.S. business showing growth, the company plans to expand the production line of the second factory in the second half of this year and establish a third factory around next year.

Nongshim plans to particularly focus on the Latin market this year. They aim to target California and Texas, regions with a high proportion of Latin consumers, with new products that cater to their taste preferences, and based on this, they plan to actively enter the Mexican market. Jiho Choi, a researcher at Samsung Securities, explained, “Considering that southern states like Texas have the highest population share within North America, the results of targeting the southern region could play an important role in sustaining future business momentum. The southern market will be a key area for Nongshim's overseas business development and growth.”

Samyang Foods, whose export ratio has risen to 70%, faces the challenge of production capacity reaching its maximum due to rapidly increasing demand. As of the end of last year, the operating rate of Samyang Foods' main product factories was reported to be 90%, leaving little room for additional production. This is why there are concerns that performance growth this year may be limited. Samyang Foods, which continues its export strategy through domestic production, announced an expansion of its second factory in Miryang last year due to the surge in export volume. When the second factory begins operation in May next year, production capacity will increase by about 25%, providing relief. However, until then, how the company responds to increased demand through line efficiency improvements will determine the extent of performance growth this year.

Ottogi, whose overseas sales account for around 10%, is also expected to pursue overseas markets more aggressively. In August last year, Ottogi established a production subsidiary, 'Ottogi Food America,' under its U.S. corporation 'Ottogi America Holdings.' By launching a production subsidiary, Ottogi expressed its intention to move beyond the existing export and sales methods to direct local production, with ramen and home meal replacements (HMR), major export items, cited as key production products. It is currently known that they are reviewing sites for establishing the production plant.

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