Heo Young-in's 200 Billion Investment Persistence Bears Fruit This Year... Beyond No.1 in Bread, Targeting Future Food Sources

Completion of Bread Factory Expansion... Full Operation This Month, Sales Up 20%
Salad and Processed Vegetable Sales Also Gain Momentum... Business Expansion into Vegan Market

[Asia Economy Reporter Lee Seon-ae] SPC Samlip is rapidly transforming into a comprehensive food company by strengthening its bakery and fresh convenience food businesses. Chairman Hur Young-in of SPC Group, who has invested about 200 billion KRW over the past three years to enhance the business competitiveness of SPC Samlip, the group's only listed company, is expected to see the fruits of his persistence this year. The company is vigorously expanding its core bakery business capabilities in areas such as flour milling, eggs, and meat processing, while extending its reach beyond convenience foods and ready meals to future food markets.

◆ Bread Factory Fully Operational... Meat Processing Sales Gain Momentum = According to SPC Group on the 30th, SPC Samlip completed expansion work at its Siwha bread factory earlier this month and has started operations. Last year, Chairman Hur invested 15 billion KRW in the bread production line and 20 billion KRW in logistics facilities at the Siwha factory. The bread factory's production capacity increased by about 33%, from 33,000 boxes per day to 44,000 boxes. As a result, bread sales this month have grown by more than 20% compared to usual. SPC Samlip's bread market share in large supermarkets and convenience stores was about 65% as of January, and this share is expected to increase further, strengthening the competitiveness of the bakery business.

The competitiveness in flour milling, eggs, meat processing, and logistics has also improved. Last year, Chairman Hur spent approximately 25 billion KRW on expanding flour storage warehouses at Mildawon, 11 billion KRW on meat processing expansion, and about 29 billion KRW on maintenance costs. The Greek Swine factory, through expansion, has installed new freezing equipment and is producing frozen meat products such as patties and fried items at an annual scale of 3,000 tons. Based on this, SPC Samlip plans to launch various home meal replacement (HMR) products and achieve meat processing business sales of 110 billion KRW by 2022.

◆ SPC Fresh Food Factory Accelerates = Growth through SPC Fresh Food Factory, a production facility built in 2017 with an investment of 45 billion KRW in a 16,000m² (building area) industrial complex in Heungdeok-gu, Cheongju, Chungbuk, is also expected to accelerate this year. SPC Fresh Food Factory, which produces salads, processed vegetables, beverages, and sauces, led SPC Samlip's food business with sales growth of about 30% year-on-year last year. It can produce 13,000 tons annually across more than 350 items.

In particular, the core production items are processed vegetables such as iceberg lettuce, romaine, paprika, and tomatoes used in salads and sandwiches, with an average monthly processing volume reaching 800 tons, more than 60% higher than at the time of establishment. The sandwich and salad market is showing very high growth potential, aligned with recent health trends.

SPC Group's affiliated brand Paris Baguette, which operates over 3,400 stores, also receives raw vegetables supply, and SPC Samlip produces its finished salad brand Pig in the Garden, which is sold in convenience stores and supermarkets. Last year, related sales more than doubled thanks to increased Pig in the Garden sales and expanded B2B (business-to-business) channels. Especially, the monthly average production of Pig in the Garden bowl salads, such as Quinoa Basil Mini Salad and Cobb Bowl Salad, exceeded 300,000 units.

Besides processed vegetables and salads, SPC Fresh Food Factory also independently produces beverage bases, concentrates, syrups used in non-heated refrigerated juices and smoothies, as well as sauces like tomato paste, mayonnaise, mustard, and dressings, which were mainly outsourced through original design manufacturing (ODM). Production volume has nearly doubled this year.

An SPC Samlip official said, "With stable growth linked to 6,000 SPC Group stores and expanded external transactions, fresh convenience food sales at SPC Samlip are expected to grow by more than 20% compared to last year. Going forward, we will use SPC Fresh Food Factory as a forward base to introduce various fresh convenience foods and new category products that meet consumer trends, aiming to achieve sales of 100 billion KRW (consumer price basis)."

◆ Strengthening Food Business with Vegan Product Development = Chairman Hur is focusing on the future food market by paying attention to vegan products and actively developing related items to strengthen the food business capabilities. To this end, on the 18th, SPC Samlip formed a strategic partnership with the U.S. food tech company JUST for exclusive domestic production and sales. Founded in 2011, JUST is a company that achieved great success with 'JUST Egg,' made primarily from mung beans. JUST Egg tastes and smells indistinguishable from real eggs, contains sufficient protein, but has no cholesterol and low saturated fat, gaining popularity among vegetarians and consumers allergic to eggs.

Through this partnership, SPC Samlip will manufacture JUST's products such as 'JUST Egg' and 'JUST Dressing' at SPC Fresh Food Factory and exclusively distribute them domestically starting in the second half of the year. In addition to consumer distribution channels, the company plans to enter the B2B market beginning with affiliated brands like Paris Baguette and Dunkin, and develop various vegetarian foods. An SPC Samlip official explained, "The plant-based protein food market is growing globally by more than 10% annually, with unlimited future growth potential. Through this partnership, we will lead the domestic food tech industry and the future food market."

SPC Samlip also signed an exclusive license agreement to introduce the U.S. egg sandwich specialty store 'Eggslut' to Korea. The first store is scheduled to open in the first half of the year. SPC Samlip is actively growing its sandwich brand 'Sandfarm,' and it is expected to achieve business synergy with Eggslut. Sandfarm is a leading brand in the sandwich market, holding over 20% market share in convenience store sandwich sales, ranking first.