Korean food firms eye Vietnam as potential market

The Republic of Korea (RoK)’s food industry targets Vietnam as a premier market for K-Food as companies entering the Southeast Asian country early continue to consider it as a key market for their overseas business operations, said insiders.

In June, Korean food maker Daesang spent 30 billion KRW (over 21.7 million USD) on expanding its plant in Vietnam, aiming to double its annual production capacity. Currently, Daesang has four factories in Vietnam, specialising in producing convenience foods, ready-to-eat foods and sauces, maltose and tapioca starch, and processing fresh meat. Last year, the firm earned 201.6 billion KRW in revenue in Vietnam, a twofold rise from the figure five years ago.

In April, Paldo Corporation completed the construction of its second factory near the southern province of Tay Ninh. This demonstrated its plan to establish a production belt spanning from the North to the South of the country. In the future, the company plans to further expand the facilities of its second factory to increase the production of instant noodles and use it as a base for exporting to neighbouring countries. In 2023, the revenue of its subsidiary Paldo Vietnam reached 79.7 billion KRW, up 17.4% year-on-year.

Vietnam is also chosen by Ottogi as an establishment to promote its global business operations and expand its business. Currently, Ottogi owns two factories in Bac Ninh and Binh Duong provinces. Recently, Ottogi introduced the "Oppa Ramen" product specifically for the Vietnamese market.

Among other well-known brands of the RoK in Vietnam, Orion stands out with sales reaching 500 billion KRW. In 2023, Orion Vietnam reported a total revenue of 475.5 billion KRW, surging by 62.8% compared to 2020. Thanks to its continuous growth in Vietnam, the enterprise is expanding its investment, including constructing more factories.

CJ CheilJedang is developing its fresh food business, focusing on frozen food, in Vietnam. It invested 30 billion KRW to establish an integrated production facility in the Mekong Delta province of Long An in 2022, and the firm plans to invest 100 billion KRW in its additional facilities next year.

After declaring its "globalization of soju" initiative in 2016, Hite Jinro aims to achieve 500 billion KRW in revenue from soju sales in foreign markets. The company has chosen Vietnam as its first overseas production base and decided to establish a manufacturing plant in the Green i-Park Industrial Complex in the northern province of Thai Binh. Hite Jinro's factory in Vietnam is scheduled to be completed by 2026, targeting 1 million products per year. This facility is expected to be expanded in the future and serve as a hub for the Southeast Asian market.

Insiders attributed the Korean food industry’s attention to the Vietnamese market to the Southeast Asian nation’s young population structure, which holds great consumption potential.

Vietnam is said to be a market where the Korean food sector has successfully penetrated and established strong recognition. Recently, the popularity of K-pop and K-culture has also boosted the popularity of K-food. To keep pace with this trend, Korean enterprises are increasing their investments in Vietnam, including expanding their facilities.