[Exclusive] Paldo Establishes New Subsidiary, Expanding Its "Dosirak Kingdom" in Russia

Establishment of "Dosirak CJ" in February
100 Billion Won Invested
Continued Expansion of Facility Investments in Ryazan and Koya
Headquarters Dividends Halted for Two Years... Likely Due to War

Paldo's "Dosirak (Доширак)," which dominates the Russian instant noodle market, is expanding its territory by establishing a new subsidiary. With Dosirak holding a market share of over 50% in Russia, this move is seen as a step to further solidify its leading position amid the K-ramen boom. Backed by explosive demand, Paldo now operates local production plants, distribution companies, and even a flour milling company for raw materials in Russia, essentially creating what could be called a "Dosirak kingdom."

Dosirak products sold by Dosirakrus, Paldo's Russian subsidiary. Dosirak website

According to the food industry on April 23, Paldo’s Russian subsidiary Dosirakrus invested 539 million rubles (approximately 10.6 billion won) this February to establish a new company, Dosirak CG (ДОШИРАК СИ ДЖИ). This comes three years after the establishment of the factory subsidiary Dosirak Nizhny and the milling company Dosirak Tambov in 2023. Until now, Paldo has operated five subsidiaries in Russia: Dosirakrus, Dosirak Koya, Dosirak Ryazan, Dosirak Nizhny, and Dosirak Tambov.

Paldo’s Russian subsidiaries, including Dosirakrus, are continuing to expand their production lines. Dosirak Ryazan invested 160 million rubles in facility installation and construction projects. Last month, Boris Yashinsky, Governor of Ryazan, visited the plant, held practical discussions with management about the possibility of expanding production in the future, and pledged to "provide all possible support at the local government level." Dosirak Koya is currently building a new warehouse, with construction-in-progress assets amounting to 622.2 million rubles as of the end of last year. Dosirak Koya also plans to expand its business this year by launching new product categories.

Dosirak Nizhny is currently undergoing production efficiency improvements, such as suspending its macaroni production line last year and selling and relocating part of its equipment.

Dosirak, Paldo's flagship brand, commands over 50% of the Russian instant noodle market. Dosirak achieved dominance in the Russian market through localization, introducing a variety of flavors such as chicken, mushroom, and shrimp to cater to Russian consumers who are not accustomed to spicy tastes. Reflecting local eating habits, Dosirak Plus, which includes a mayonnaise sauce, became especially popular. At one point, its market share exceeded 60%, but recently, it has been declining, calling for a response. According to the analysis by local payment company Evotor, cited by the daily Kommersant, Dosirak’s instant noodle market share was 51% last year, a 2 percentage point drop from the previous year.

Paldo’s entry into Russia began in the 1990s when merchants from Vladivostok sold Dosirak by the bundle, leading to the opening of a Moscow representative office in 1997. This was followed by the construction of the first Dosirak Koya plant in 2004, the second plant in Ryazan in 2009, and since 2010, Dosirakrus has been solely distributing products from these two plants throughout Russia. Last year, Dosirakrus sold finished products produced in Ryazan, with the transaction volume between the two companies exceeding 200 billion won. In 2023, to cope with surging demand, Paldo built a third plant in Nizhny Novgorod and established a flour mill in the Tambov region in the same year.

Sales continue to rise. According to Paldo’s audit report, the combined sales of Dosirakrus and Dosirak Koya reached 632.8 billion won last year, up 29% from the same period a year earlier. In 2021, the combined sales of the two subsidiaries were around 300 billion won, surpassing 600 billion won for the first time last year—double the amount in just two years. Dosirakrus alone recorded sales of 500.9 billion won last year, exceeding Paldo's own sales of 473.7 billion won. As a result, the net asset size of the Russian subsidiaries has increased sharply. Dosirakrus’s net assets grew by 59%, from 379.8 billion won in 2024 to 602.7 billion won last year. Dosirak Koya’s net assets also expanded by 42% during the same period.

Despite the active Russian operations, these subsidiaries did not pay dividends to the Korean headquarters last year. Previously, Dosirakrus had delivered some of its profits as dividends to Paldo. In the early days of business, profits were reinvested locally, but in recent years, dividends began, with nearly 30 billion won remitted in 2023. This was about 32% of the net profit (90.1 billion won) earned in 2022.

However, for two years starting in 2024, no dividends have been paid. This is believed to be due to Russia’s stricter foreign exchange controls following the outbreak of the Russia-Ukraine war in February 2022, which has prevented dividends from being sent to the Korean headquarters.

Paldo plans to reinvest profits earned in Russia into further local business expansion. Dosirakrus, responsible for exclusive distribution in Russia, invests in the establishment of new subsidiaries, and supports local business expansion by providing long-term loans exceeding 10 billion won to manufacturing bases such as Dosirak Koya and Dosirak Ryazan. A Paldo representative stated, "We plan to continue expanding investments to solidify our position in the Russian market."

Russia has become a major battleground for K-ramen. According to global market research company Euromonitor, the Russian instant noodle market is expected to record a high annual growth rate in the 10% range from 2021 to 2030, expanding to 1.05 billion U.S. dollars by 2030. The popularity of K-ramen is especially rising due to the Korean Wave. Last year, ramen exports to Russia reached 45.86 million U.S. dollars, a 75% increase from the previous year. Samyang Foods’ Buldak Bokkeummyun is also increasing its market share, and Nongshim, known for Shin Ramyun, plans to establish a Russian subsidiary in June.

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