Orion to invest $581 million in domestic, overseas production amid surge in K-snacks' global popularity

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Orion to invest $581 million in domestic, overseas production amid surge in K-snacks' global popularity

Published: 15 Apr. 2025, 17:37 Updated: 15 Apr. 2025, 19:54

Audio report: written by reporters, read by AI

Confectionery maker Orion's headquarters in Yongsan District, central Seoul, on Feb. 12. Orion recorded 3.1 trillion won in sales and 543.6 billion won in operating profit last year. [YONHAP]

Confectionary maker Orion plans to invest 830 billion won ($581 million) to expand its production facilities at home and abroad, with the goal of joining the "5 trillion won sales club" shortly as Korean snacks surge in global popularity.

Orion announced that its board of directors approved a plan to invest 460 billion won to build a production base in the Technopolis Industrial Complex in Jincheon County, North Chungcheong, on Tuesday. This is the largest domestic investment by a food company in the past five years.

The company currently operates six factories in Korea — two in Iksan, two in Cheongju, one in Jeju and one in Miryang. The number will increase to seven when the Jincheon factory is completed in 2027.

The Jincheon base, covering 188,000 square meters — about the size of 26 soccer fields — will function as an integrated “one-stop” site for production, packaging and logistics.

"Since everything from raw material input to logistics will be handled in one place, efficiency can be maximized," an Orion official said.

Once operational, the Jincheon plant will expand the company's domestic production capacity to up to 2.3 trillion won.

Shoppers at a large supermarket look at Choco Pies on display on Feb. 27. Choco Pies are confectionery maker Orion's bestselling snacks. [YONHAP]

The company will also expand its overseas factories. In Russia, where Orion's Choco Pie has become a beloved snack, the confectionary maker plans to invest 240 billion won to add another building to its Tver factory — just three years after its new factory in the city began operations in 2022.

Despite operating the Tver plant at over 120 percent capacity, Orion has struggled to meet Choco Pie demand.

“Sixteen new production lines for pies, biscuits, snacks and jelly products will be added,” an Orion official said. “Once the investment is completed, the annual production capacity of the Russian plant will double to about 750 billion won.”

Orion also plans to invest 130 billion won in Vietnam, another fast-growing market. It aims to complete a new plant building within its Yen Phong factory in Hanoi in the second half of this year and expand its rice snack production line.

Choco Pies are on display at a large supermarket in Seoul on Feb. 27. Choco Pies are confectionery maker Orion's bestselling snacks. [YONHAP]

By next year, the company will also build an additional logistics center and packaging facility at its third Hanoi plant to secure an annual production capacity of 900 billion won.

In Vietnam, the demand for not only the company's much-loved Choco Pie but also rice snacks has surged, with Orion surpassing 500 billion won in annual sales last year. The rice snack is now on the verge of taking the No.1 market share in Vietnam's snack sector, just six years after its launch.

"This investment will further solidify Orion's status as Vietnam's No.1 food company," the company said.

This investment is particularly meaningful because it is funded by about 640 billion won in profits earned over the past three years in China and Vietnam, according to Orion. Orion has been bringing in dividends from its overseas subsidiaries since 2023, with this year's planned dividend alone amounting to about 290 billion won.

Confectionery maker Orion's headquarters in Yongsan District [JOONGANG PHOTO]

With overseas sales accounting for 65 percent of its total, Orion aims to strengthen its market dominance in global markets.

"This year will be the first year of a leap toward 5 trillion won in sales and 1 trillion won in operating profit,” said Orion CEO Lee Seung-joon at last month's general shareholder meeting. Last year, Orion recorded 3.1 trillion won in sales and 543.6 billion won in operating profit.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.

BY HWANG SOO-YEON [[email protected]]