[Exclusive] Daesang and CJ Aim for Global Domination with 'Korean Gim' "Quality Up with Local Production" (Comprehensive)

Daesang, the Only Korean Company Producing and Selling Gim Overseas... Leading Gim Globalization
Building New Production Base in Vietnam Following Indonesia... Plans to Expand into Middle East
CJ CheilJedang to Build Gim Factory in the US... Aiming to Operate Within First Half of the Year

[Asia Economy Reporter Lee Seon-ae] Leading Korean food companies Daesang and CJ CheilJedang have chosen "Gim" as the next-generation K-food to focus on nurturing and are taking the lead in globalizing Korean Gim. By building factories overseas and producing high-quality products locally, they plan to actively target the global Gim market, which is experiencing explosive growth as the perception of Gim as a health food expands. The leading company is Daesang. As the first Korean company to build a Gim factory in Indonesia and achieve local production overseas, Daesang recently established a new production base in Vietnam, expanding its production hubs.

According to industry sources on the 4th, Daesang recently completed the construction of a complex production factory covering approximately 40,000㎡ (12,000 pyeong) in Hai Duong Province, northern Vietnam, and has begun trial operations. Construction of this factory, which started in April last year, is a complex plant producing various food products, with a total investment cost of 17.5 billion KRW. From the first half of this year, it plans to produce seasoned Gim, Gim for kimbap (sushi), and salted Gim products. The annual production volume is expected to reach 200 tons (6 billion KRW).

A Daesang official explained, "When exporting Gim in the form of seasoned Gim (finished product), quality can deteriorate during transportation due to oxidation caused by cooking oil," adding, "We will sell the highest quality Gim through local production."

Daesang's Indonesian factory, which began construction in June 2017, has been producing products since 2018. In the first half of last year, to strengthen quality competitiveness and secure price competitiveness, additional facilities were installed, increasing production capacity from 150 tons to 250 tons (10 billion KRW). The Vietnam factory is Daesang's second Gim factory built overseas. Currently, Daesang is the only company producing Gim locally overseas.

The product is Mamam Suka Rasa Traditional Gim produced in Indonesia.

The Indonesian production volume is sold only locally. Under the brand "Mamasuka," the representative product is "Mamasuka Olive Dosirak Gim." As Mamasuka products gained popularity, sales of locally produced products in Indonesia reached 5.4 billion KRW in 2018 and grew more than twice to 11.4 billion KRW (as of November last year). In Korea, it ranks first in Gim snack product sales in major distribution channels, surpassing the well-known Thai Gim snack brand "Tao Kae Noi."

A Daesang official explained, "In Indonesia, convenience store-type supermarkets have become the main distribution channels rather than large discount marts. Mamasuka leads Tao Kae Noi in both Indomaret, the number one convenience store chain with about 14,000 stores nationwide, and Alfamart, the second largest."

The reason Daesang targets the Gim market through local production is quality. Currently, Gim is exported to over 100 countries, with export volume reaching 525.5 million USD (approximately 626.4 billion KRW) in 2018, nearly doubling in four years and establishing its status as a representative Korean export food. However, despite the encouraging export volume and production, the product's added value is somewhat lower than that of other countries. Korea produces 50% of the world's dried Gim, but prices remain at 45% of Japanese Gim and 75% of Chinese Gim. Therefore, there is a need for systematic quality management to produce high value-added products.

Chung Jung One Bulgogi-Flavored Traditional Seaweed Exported to Southeast Asia.

Lee Sang-min, Head of the Gim Business Team and Seaweed Inspection Center, said, "We plan to lead the globalization of Korean Gim by increasing added value through customized localization strategies considering the characteristics of each country," emphasizing, "We will secure price and quality competitiveness centered on local production bases in Indonesia and Vietnam and expand into Southeast Asian countries such as Malaysia as well as the Middle Eastern market." He added, "We plan to accelerate overseas market penetration by launching customized products based on country-specific localization strategies and entering the B2B raw material market, which has not yet been explored."

CJ CheilJedang has completed the construction of its first overseas Gim production factory in the United States and aims to start operations within the first half of the year. The production scale is estimated to reach about 11.5 billion KRW.

A CJ Food official from CJ CheilJedang's U.S. subsidiary said, "The Gim factory in the western U.S. is meaningful as CJ's first self-owned production plant," adding, "As demand for Korean Gim continues to increase, we proactively invested to seize the opportunity." CJ CheilJedang started its Gim business in 2006 and has been exporting Gim to the U.S. since 2010.

The official added, "Costco in the U.S. currently sells Korean small and medium-sized enterprise products as private brand (PB) Gim products, which is an important point indicating strong demand for Korean brand Gim," and said, "Considering the different food culture in the U.S., we plan to develop Gim more as a 'healthy well-being snack' rather than a side dish."