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Korea Herald
03-07-2025
- Business
- Korea Herald
Thanks to Buldak frenzy, Samyang Foods breaks ground on first overseas plant in China
South Korean food manufacturer Samyang Foods said Thursday it has begun constructing its first overseas production plant in China as part of a strategic push to expand its flagship spicy Buldak Ramen. With an investment of 201.4 billion won ($148 million), the six-line production plant in Jiaxing, Zhejiang province, will span an area of 58,378 square meters across three floors. Once completed in January 2027, the factory will produce up to 840 million units of its flagship Buldak noodles annually, all destined for the Chinese market. 'We will ensure that our products become more than just delicious food, serving as cultural mediums that connect families and friends and bridge generations and regions,' CEO Kim Dong-chan said at the groundbreaking ceremony at the plant site on Wednesday. 'Samyang Foods will grow alongside society as a food company that connects people through flavor and shares happiness and joy at the table.' With the new plant, the ramyeon manufacturer expects to make products tailored to local consumer preferences while advancing its localized marketing efforts. China accounts for roughly 25 percent of Samyang's total exports, with Buldak products enjoying high brand recognition there. Currently, all of Samyang's ramyeon products are manufactured in Korea, with production sites in Wonju, Gangwon Province; Iksan, North Jeolla Province; and two plants in Miryang, South Gyeongsang Province. Upon completion of the Chinese facility, the company's total annual production capacity for Buldak noodles across its five factories will increase to 3.52 billion units.
Korea Herald
07-04-2025
- Business
- Korea Herald
US tariffs pour cold water on exports of Korean ramyeon
Trump's surprise move to impose a 25 percent tariff on imports to the US from South Korea starting Wednesday is set to disrupt key exports, with food products at their peak. Among the hardest hit appears to be Korean instant noodles, or ramyeon, which have become a runaway hit with American consumers. Ramyeon has led the way as Korean food exports have steadily climbed over the past decade. According to data from the Korea Trade Statistics Promotion Institute, Korean food exports surged from $3.51 billion in 2015 to $7.02 billion in 2024. Ramyeon led the charge with $1.36 billion in sales, accounting for 19.4 percent of total K-food exports, while the US emerged as the top importer, as the destination for 20.8 percent of the total exports. In the first quarter this year, ramyeon posted the highest on-year growth of 27.3 percent among food items with over $100 million in export volume, while overall Korean food exports hit a record $2.48 billion, according to the Ministry of Agriculture, Food and Rural Affairs. That momentum, however, now hangs in the balance. Despite previous protections under the US–Korea Free Trade Agreement, the new tariffs could squeeze profit margins and drive up ramyeon prices. The impact may be harsher for Korean food companies without US-based production. Facing a bleak horizon is Samyang Foods, the maker of the popular Buldak ramyeon, which lacks a US factory to fall back on. The company ships its noodles directly from Korea, while its first overseas plant — slated for completion by 2027 — is in China, a country facing even steeper tariffs than Korea. The company posted record overseas sales last year of 1.33 trillion won ($908 million), up 65 percent from a year earlier. Its American subsidiary saw an even sharper rise, with revenue jumping 127 percent on-year to around $280 million. Samyang Foods has formed a task force to address the impact of the new US tariff policy, according to CEO Kim Dong-chan. 'We're taking a multifaceted approach in a broad sense such as diversifying into other regional markets or improving cost structures,' Kim said at the Korea International Ramyeon Fair last week, adding that the company is also evaluating potential sites for overseas factories. Other food manufacturers, such as Nongshim and CJ CheilJedang, may be better positioned to weather the storm, thanks to their established production facilities in the US. Nongshim, the maker of another Korean staple, Shin Ramyun, has operated a US subsidiary since 1994 and currently runs two American plants to handle the bulk of its local demand. CJ CheilJedang, the company behind the Bibigo brand, which includes its own line of noodle products, operates 20 manufacturing facilities across the US. The food giant reported 5.58 trillion won in overseas sales last year, with 4.7 trillion won coming from the North American market alone. Ottogi, known for its Jin Ramen products, may be poised to accelerate plans for a US manufacturing plant, as it has already secured a site, although no construction timeline has been announced. With the food industry reeling from the tariff news, uncertainty and concern are expected to persist for the foreseeable future, according to industry insiders. 'Even companies with strong branding and demand will struggle to withstand a 25 percent tariff,' one company official noted, predicting potential price hikes for Korean instant noodles in the global market. 'Even if a company started planning a US factory today, the facility wouldn't be operational until after Trump's term, which leaves such investments vulnerable to future political climates,' the official added.
