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Confectionery industry

Orion boosts presence in India's $15 bn confectionery market

Feb 23, 2021 (Gmt+09:00)

Orion's newly constructed plant in Rajasthan, India
Orion's newly constructed plant in Rajasthan, India

South Korea-based confectionery Orion Corp. has set up a plant in India, the second-most populous country in the world, to respond quickly to local market demands and cut back on logistics costs.

The Korean confectionery announced on Feb. 23 that it has concluded the construction of a 17,562-square-meter plant in Rajasthan, India – marking the 10th overseas plant for Orion. The company also operates plants in China, Vietnam and Russia.

Orion has received much attention abroad by offering products tailored to local palates. The company is expected to use the same strategy in India, which boasts a confectionery market valued at around 17 trillion won ($15.3 billion) annually. 

The Korean confectionery company first conceived of foraying into India about two and a half years ago. In October 2018, the company set up a corporate body in India named Orion Nutritionals but did not operate a manufacturing plant, making it challenging to introduce products via a local distribution channel.

Instead, the company distributed and sold a small number of products brought in from its Vietnam-based plant.

Opening ceremony of Orion's facility in India
Opening ceremony of Orion's facility in India

For its India-based facility, Orion has teamed up with local companies to ensure a stable operation and workflow. Although the Korean company owns the facility, it will not directly handle the production. Instead, India's processed food manufacturer Mann Ventures will oversee the plant operation, while Orion's India-based office will manage marketing and sales.

"Each state in India has different legislation and distribution systems, making it more efficient for a well-versed local firm to make products," said an Orion official.

Orion's famous Choco Pie
Orion's famous Choco Pie

CHOCO PIE BATTLE TO REIGNITE ABROAD

Korea's two leading confectioneries, Orion and Lotte Confectionery Co., will be going head to head in India over their signature product, the choco pie.

Lotte Confectionery was the first Korean confectionery firm to tap into India in 2004. It acquired a local company, Parry's Confectionery, and began producing choco pies in India.

Although a latecomer to India, Orion has also selected the choco pie as its main product for the India-based facility, heralding another heated choco pie battle for the two companies abroad.


Write to Jong-pil Park at jp@hankyung.com

Danbee Lee edited this article.

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