Target's Global Business Expansion Outpost 'New Vietnam Factory' Operational... Opening the Era of 1 Trillion Won Overseas Sales

First Room-Temperature Food Factory in Vietnam... Launch of 21 New Products Including Tteokbokki
Foundation for Global Business Expansion... Overseas Sales Expected to Surpass 1 Trillion Won This Year

[Asia Economy Reporter Lee Seon-ae] Daesang is set to surpass 1 trillion KRW in overseas sales for the first time this year. Daesang plans to use its fourth newly completed factory in Vietnam as a forward base for expanding its overseas business and make a full-fledged leap as a global comprehensive food company.

Vietnam's First Ambient Temperature Factory... Launch of Cheongjeongwon O'Food

According to Daesang on the 27th, the ‘Hai Duong Factory’ completed in northern Vietnam with an investment of 15 billion KRW is the fourth production plant following the Bac Giang (fermented seasoning Miwon), Thai Nguyen (starch syrup, tapioca starch), and Hung Yen (fresh and processed meat) factories. It is Daesang’s first ambient temperature food factory in Vietnam. The total site area is 12,000 pyeong (approximately 39,668 square meters), and the annual production capacity (CAPA) is about 14,000 tons.

Daesang recently began full-scale operations at the ‘Hai Duong Factory’ and launched the global brand ‘Cheongjeongwon O’Food’ in Vietnam, releasing 21 new products across five categories: chili sauce, spaghetti sauce, tteokbokki, seasoning sauce, and gim (seaweed). The strategy is to target the market with differentiated Korean cuisine-based sauces and convenience foods reflecting Vietnam’s open food culture and the Korean Wave trend.

The chili sauce reinterprets Korean gochujang (fermented red chili paste) as a new and healthy local sauce, entering the table sauce market and actively promoting Korea’s spicy flavors. Daesang differentiated the spicy ingredient by using traditional Korean fermented gochujang while achieving a balanced taste, aroma, and texture suitable for Vietnamese cuisine, completing a localized chili sauce. Two products were launched according to the level of spiciness to broaden consumer choice, and the products are differentiated as healthier and safer by not using preservatives or artificial coloring. Unlike existing products, a unique and modern tube container design was applied to enhance convenience for local consumers.

With the Korean Wave fever increasing interest in tteokbokki in Vietnam and the trend continuing mainly among young consumers, Daesang plans to expand the Vietnamese tteokbokki market with a new concept tteokbokki and nurture it as the market’s number one product. The tteokbokki products released by Daesang are convenience foods that can be enjoyed simply by pouring hot water without the need for a microwave. They allow consumers to enjoy the authentic taste of Korean tteokbokki and come in two varieties: traditional tteokbokki and cheese tteokbokki, catering to different preferences.

In addition, Daesang plans to captivate Vietnamese consumers with various products such as meat seasoning sauce that reflects the authenticity and expertise of Korean meat marinades and enhances convenience with single-use pouch packaging; spaghetti sauce incorporating the know-how of Cheongjeongwon, the number one brand in Korea’s spaghetti sauce market; and gim (seaweed) processed locally from Korean raw materials with a systematic quality control system, improving taste and price competitiveness.

Facebook promotional content for Ofood Tteokbokki launched in Vietnam by Daesang.

Expecting 10-Fold Growth in Vietnam Sales... Momentum for 1 Trillion KRW Global Sales

Daesang’s sales in Vietnam have steadily grown from 102.2 billion KRW in 2017 to 120 billion KRW in 2018 and 143.3 billion KRW in 2019. This year, sales are expected to increase to 160 billion KRW due to positive responses to new products such as tteokbokki.

Daesang established Miwon Vietnam (Vietnam corporation) in 1994 after receiving investment approval from the Vietnamese government. In 1995, it set up a factory in Bac Giang near Hanoi and began full-scale production and sales of fermented seasoning Miwon, currently boasting a production capacity of over 35,000 tons. Since 2002, Daesang has diversified its product lineup beyond Miwon and aimed to become a leading comprehensive food company in the local food business. Notably, in 2015, it entered the meat processing market by acquiring Duc Viet Food in Vietnam, and in 2018, it launched a new children’s sausage product and expanded the market by recruiting Park Hang-seo, the Vietnamese national football team coach, as a model.

As the Vietnam business continues to progress smoothly, Daesang’s overall overseas business sales are also expected to gain momentum. Overseas sales have shown an upward trend from 483.7 billion KRW in 2015 to 673 billion KRW in 2016, 722.4 billion KRW in 2017, and 818.8 billion KRW in 2018. Last year, it achieved 911.5 billion KRW, drawing attention as it neared 1 trillion KRW in sales. Accordingly, achieving 1 trillion KRW in overseas sales for the first time this year is highly likely.

Daesang plans to actively utilize the Hai Duong Factory as a forward base for expanding its global business. The strategy is to maximize sales growth by exporting products manufactured at the Hai Duong Factory to neighboring countries. Shin Sang-ho, head of Miwon Vietnam Food BU, emphasized, “The operation of the Hai Duong Factory has laid the foundation for Daesang to make a full-fledged leap into the comprehensive food business in Vietnam. Through thorough localization and differentiation strategies, we expect Vietnam business sales to grow more than 10 times compared to the current level by 2030, securing competitiveness in the Vietnamese food market.”

Meanwhile, in addition to the four factories in Vietnam, Daesang currently owns a total of nine production plants, including two in Indonesia, one in the Philippines, and two in China. In April last year, Daesang (Yancheng) Food Co., Ltd. was established, and a new factory was constructed in Yancheng City, Jiangsu Province, China, with full-scale production scheduled for this year. Daesang also established a corporation (Daesang Food USA) in the United States and plans to build a new factory there.