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Corporate bonds

Korea’s Hot Chicken Flavor Ramen maker to issue first bond

To set up unit in China by year-end after establishing base in US; raises local production capacity

By Nov 10, 2021 (Gmt+09:00)

(Courtesy of Samyang Foods)
(Courtesy of Samyang Foods)

South Korea’s Samyang Foods Co., the maker of the Hot Chicken Flavor Ramen, plans to issue its first corporate bonds ever as it is expanding businesses at home and abroad with the growing popularity of the spicy instant noodle in overseas markets.

Samyang has been increasing investments in establishments of bases in the US and China, as well as expansion of production and logistics capacities in South Korea.

Samyang aims to sell up to 100 billion won ($84.6 million) in corporate bonds next month, according to investment banking industry sources. The company has been relying solely on bank loans since it was founded in 1961.

The firm was known to be planning to use the proceeds for a new domestic plant under construction at a cost of 210 billion won. It last built a local factory in 1989.


Samyang is a top mid-sized company with steady profit growth. Its operating profit rose 21.8% to 95.3 billion won in 2020 as revenue increased 19.3% to 648.5 billion won.

The profit and sales declined in the first half of this year from a year earlier as exports tumbled on the COVID-19. Shipping costs also soared. But earnings are expected to recover from the next year on increasing vaccinations, analysts said. Samyang saw increased brand awareness of Samyang Ramen, the country's first ramen, worldwide thanks to Netflix’s global hit Squid Game. It is diversifying overseas markets and its ramen output is expected to grow 50% to 1.8 billion units once a new domestic factory operates from the second quarter of 2022.
Oh Il-nam, or Player 001, in Squid Game asks to have drinks with Samyang Ramen (Courtesy of Netflix)
Oh Il-nam, or Player 001, in Squid Game asks to have drinks with Samyang Ramen (Courtesy of Netflix)

Samyang’s debt ratio was 67.1% as of the end of the first half of 2021. It has 219 billion won in liquid assets, compared to 163.3 billion won in liquid debts. Its cash assets totaled about 80.3 billion won.

Such a healthy balance sheet allows the company to secure long- and short-term loans for operations and capital expenditures at interest rates of around 1% per annum from major local lenders such as the Korea Development Bank, KB Kookmin Bank and NH Bank.


Samyang has been actively investing as it grew more confident in the future business thanks to rising earnings. It expanded local storage capacities and set up a warehouse management system.

The company also set up a unit in the US earlier this year and aims one in China around the year-end as surging overseas sales led to a rise in overall revenue. It also plans to diversify businesses.

Kim Jung-soo, its president and the chairman’s wife, emphasized that the company must develop new hit products and diversify overseas markets, reducing reliance on the Hot Chicken Flavor Ramen and China.

Samyang generated 57% of its total revenue from exports with China and the US estimated to account for 41% of overseas sales and 18%, respectively. It has been selling products in China through local distributors, and wholesalers in other countries, except Japan where it set up a unit in 2019.

Samyang is expected to benefit from its plan to set up overseas units, analysts said.

“Units in the US and China is predicted to allow direct marketing and sales, improving profitability and inventory management,” said NH Investment & Securities analyst Cho Min-ji.


Samyang still needs to improve its environmental, social and governance (ESG) management practices to attract investors for its planned bond. The ESG issues grew so important that it became a key factor for corporate bond investors’ decisions.

Its owner and former chairman Chun In-jang has been in jail since 2019 since a court sentenced him to three years in prison for embezzlement. His wife and president of the company was also sentenced to a two-year term suspended for three years on the same charge. She returned to the post after approval by the Ministry of Justice last year.

Samyang enhanced its ESG management practices by establishing new bodies such as an ESG committee and an audit committee under the board of directors.

Write to Hyun-Il Lee at

Jongwoo Cheon edited this article.

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