CJ Cheiljedang achieved its best-ever quarterly business performance on the back of the growth of its global business.
CJ Cheiljedang posted 4,318.6 billion won in sales, excluding those of CJ Logistics, in the first quarter of this year, the company said on May 9.
The figure represents a 17.6 percent year-on-year surge and the best-ever business performance on a quarterly basis.
The company saw its operation profit stand at 364.9 billion won, excluding CJ Logistics, a 6.6 percent year-on-year rise.
CJ Cheiljedang chalked up 6,979.9 billion won in sales on a consolidated basis including CJ Logistics, a 13 percent year-on-year surge and 435.7 billion won in operating profit, a 13.1 percent year-on-year jump.
By division, its food business saw sales jump 13 percent year-on-year to 609.5 billion won. Domestically, the company grew on the back of large-scale new products such as home meal replacements based on its strong market position.
The company achieved a 15 percent year-on-year jump in overseas processed food sales, including those of Swans in the United States.
The company, prioritizing the concentration of seven global strategic products, saw sales in the mandu (dumpling) and processed rice segments jump 71 percent and 66 percent, respectively.
By nation, globalization of K-food has been accelerated. The United States has seen a 14 percent rise, China a 15 percent increase, and Europe a 36 percent jump.
Thanks to these feats, overseas sales stood at 1,176.5 billion won, accounting for 45 percent of the total sales.
But the food business division saw its operating profit decline about 4 percent year-on-year to 169.7 billion won due to rising unit costs coupled with raw materials and subsidiary ingredient hikes.
It meant that the company was evaluated to be not free from global inflationary pressures.
The bio business segment, comprising of amino acids and seasoning materials, saw sales surge 39.3 percent year-on year to 1,082.8 billion won and operating profit jump 128 percent year-on-year to 175.8 billion won.
The ratio of operating profit versus sales surged 3 percentage points to 165.2 percent, establishing the bio business as a global value-added business.
The feat was owed to the fact that global operations in the United States, China, Southeast Asia and South America ramped up their standing based on advanced production technologies and favorable placement and secured stable profitability thanks to the expanding of high-profit specialty products and the signing of long-term contracts with large-scale outlets.
CJ Feed & Care, an independent fee and livestock entity, posted 626.3 billion won in sales and 19.4 billion won in operating profit.
The company continued to maintain external growth, but saw its operating profit decline due to rising unit price hikes.
As major business countries such as Vietnam and Indonesia are expected to see livestock prices return to rise, future profitability is likely to be improved, a company official said.
CJ Cheiljedang held a ceremony to ship the multi grain, a global “Hetbahn,” released by the company, at a plant in Busan on April 21. (Photo: CJ Cheiljedang)
As major raw material price hikes such as international grain price surges and other subsidiary cost rises have mixed reactions, Korean food makers are predicted to see growth slow in the second quarter of the year or later.
As for the trends, CJ Cheiljedang plans to reduce unit prices by ramping up purchase and production capabilities and seeing core products keep on growing.
CJ Cheiljedang plans to concentrate its capabilities on growth channels such as B2, convenience stores and online channels while accelerating “Hetbahn Global Project” to ramp up exports to areas such as the United States.
As for the bio business, CJ Cheiljedang plans to launch the mass production of PHA, a marine bio-degradable plastic, as part of efforts to ramp up competitiveness in the white bio segment.
CJ Cheiljedang will secure structural competitiveness and keep on maintain innovative growth by developing new products and strengthening new businesses, making R&D investments, the company said.