Lee Jae-hyun Accompanies U.S. Visit, Boosting Overseas Food and Content Business

Lee Jae-hyun, Chairman of CJ Group, accompanied President Yoon Suk-yeol on his state visit to the United States as part of the economic delegation, drawing industry attention to the outcomes of the visit. It is anticipated that through this visit, CJ will review key issues in its major overseas business sectors, particularly in food and content, where it has been prominent on the international stage, and strengthen efforts to establish future growth drivers.

Lee Jae-hyun, Chairman of CJ Group, who accompanied President Yoon Suk-yeol's state visit to the United States as part of the economic delegation, is entering the White House on the 27th, guided by a military aide, at the state dinner hosted by U.S. President Joe Biden and the First Lady.
[Photo by AP Yonhap News]

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According to the business community on the 28th, Chairman Lee joined President Yoon's U.S. visit as a representative of companies and institutions within the economic delegation, which consisted of 122 members. He represented the food and biotechnology industries. The day before, he attended a state dinner at the White House, hosted by U.S. President Joe Biden and the First Lady, wearing a tuxedo alongside other key business figures.

This is the first time Chairman Lee has accompanied a president on an overseas trip. CJ is currently actively conducting business in the United States in sectors such as food, logistics, and entertainment. An industry insider said, "CJ affiliates have actively expanded their businesses through investments not only in food, represented by K-Food, but also in cultural content," adding, "We expect that (Chairman Lee's visit to the U.S.) will be an opportunity to strengthen CJ's position in the U.S. market and address areas of underperformance."

Among the businesses CJ has developed targeting the U.S., the most notable success is the acquisition of the American frozen food company Schwan's by CJ CheilJedang in 2019 for 2.8 trillion won. This was the group's largest merger and acquisition (M&A) aimed at realizing Chairman Lee's 'Great CJ' vision to achieve group sales of 100 trillion won and overseas sales accounting for more than 70% by 2020. Although the COVID-19 pandemic caused some setbacks in achieving these goals, last year CJ CheilJedang's overseas food sales surpassed 5 trillion won for the first time, beginning to show positive results. Among these, Schwan's accounted for 3 trillion won, or 60%, of the sales. To enhance efficiency and competitiveness in the North American food business, CJ CheilJedang integrated Schwan's with its U.S. food business corporation CJ Food USA (CJFU) last year. CJFU is the local entity operating CJ CheilJedang's U.S. food business, including the Bibigo brand.

With the increase in frozen food consumption due to the COVID-19 pandemic, global strategic products such as the flagship brand Bibigo continued to grow. Last year, CJ CheilJedang's global food business reached 5.1811 trillion won, with the U.S. accounting for 4.0356 trillion won. Additionally, CJ Foodville's Tous Les Jours U.S. branch has maintained profitability for five consecutive years since 2018.

The cultural content business is another area CJ has been focusing on. CJ ENM's subsidiary Studio Dragon and eight content production companies under CJ ENM merged to form CJ ENM Studios, which supplies the most K-content to the global online streaming service Netflix, maintaining a strong relationship. On the other hand, CJ ENM faces the challenge of reassessing the business performance of the U.S.-based production studio Fifth Season (formerly Endeavor Content), which it acquired 80% of shares in January last year for about 930 billion won.

This decision was made to produce and distribute CJ ENM's content locally in the U.S., but Fifth Season posted a net loss of 69.2 billion won last year, negatively impacting financial conditions. A content industry insider said, "We understand that internally, efforts are being made to restructure the business with the goal of a rebound in the second half of the year by expanding original content co-produced with Fifth Season and broadening global distribution networks," adding, "it will be interesting to see if more noticeable changes occur following Chairman Lee's visit to the U.S."

However, CJ clarified, "While it is true that Chairman Lee accompanied the economic delegation representing the business community, there are no plans to prepare separate business agreements or review projects with the U.S. side as a result of this visit."

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