CJ CheilJedang to invest $584 mn to build food factories in Europe, US

CJ CheilJedang Corp., South Korea’s largest food company, will spend a total of $584 million to build new food-manufacturing factories in Europe and the US to expand its footing in the global food market amid still-soaring demand for Korean food across the world.

The company announced on Thursday plans to build a frozen food-making factory and related facilities on a 14,000-square-meter plot of land, roughly the size of 16 football fields, in Dunavarsany, Hungary.

The Korean food giant will invest 80 million euros ($84.4 million) to build a ready-meal production plant and a logistics center on the site, which would mark CheilJedang’s first construction of a food-manufacturing factory in Europe.

The decision comes as the frozen dumpling market in Europe has grown over 30% annually in recent years.

With the new plant, CJ CheilJedang will meet zooming demand for frozen dumplings, or mandu in Korean, in Europe and expand its presence in the region’s food market amid the growing popularity of Korean food.

It will ship products manufactured at the new Hungary factory, such as stuffed and frozen dumplings and ready-to-eat chicken dishes, to Germany, the UK, France, the Netherlands and Belgium, according to the Hungarian Investment Promotion Agency (HIPA), a national investment promotion organization governed by Hungary’s Ministry of Foreign Affairs and Trade, on Wednesday.

The plant in Hungary, due to be operational in the latter half of 2026, is also expected to be CJ CheilJedang’s gateway to neighboring countries in Central and Eastern Europe, such as Poland and the Czech Republic, as well as the Balkans.

NEW FOOD PLANT IN THE US

The Korean food company is also ramping up it global expansion push by building a plant in the US, one of its key overseas markets.

On Wednesday last week, Schwan’s Company, the US food-making subsidiary of CJ Foods, broke ground on the largest Asian food factory in North America on a 575,000-square-meter site, roughly the size of 80 football fields, in Sioux Falls, South Dakota.

The Korean company will initially invest $500 million in the construction of a 700,000-square-foot food factory with two production lines, a wastewater treatment plant, a warehouse and distribution center, shipping and receiving docks and an office space onsite.

Once its construction is complete in 2027, the food factory will churn out frozen dumplings and egg rolls under CJ Foods’ Bibigo brand.

CJ CheilJedang in 2021 announced a plan to build Schwan’s Company’s Asian food factory in South Dakota.

With the new factory in the US, CJ CheilJedang will strive to cement its leading position in the US dumpling market. It currently commands the largest 42% share in the market.

Its Bibigo Mandu sales in the US increased 33% from January to September, outpacing the US overall dumpling market’s 15% growth rate over the same period.

GLOBAL AMBITIONS

With aggressive investments in the expansion of its food manufacturing capabilities, CJ CheilJedang is betting big on its food business in the global market.

CJ CheilJedang’s food product sales in overseas markets rose to 5.39 trillion won in 2023 from 3.15 trillion won in 2019, marking a 70% growth rate over the past four years.

Its offshore food sales accounted for 48% of its total food sales last year, up from 39% in 2019.

Europe and the US played a key role in expanding its global food sales.

Its food sales in Europe jumped 40% in the third quarter ending October this year from the same period last year. Meanwhile, food sales in the US make up more than 80% of the Korean food company’s entire overseas sales.

CJ CheilJedang currently operates 20 food manufacturing factories in the US, including those run by Schwan’s, the leading US food company acquired by CJ in 2019.

It purchased frozen-food producer Mainfrost Foods in Germany in 2018 and set up entities in France and Hungary this year.

It also runs food factories in other countries such as China, Vietnam and Australia.

Write to Hun-Hyoung Ha at hhh@hankyung.com

Sookyung Seo edited this article.