[Click eStock] "MSC, Processed Food Demand Does Not Go Against the Trend"

[Asia Economy Reporter Jang Hyowon] Shinhan Investment Corp. analyzed on the 15th that MSC requires timely investment expansion as the demand for processed food products in the upstream sector is steadily increasing.

MSC, established in 1974, is a leading domestic manufacturer of food additives. It has obtained HACCP certification for production systems of all food types including carrageenan, agar, natural colorants, concentrated juices, and seasonings. With a stable growth foundation secured by various clients such as major domestic food companies CJ CheilJedang, Lotte, Samyang, Nongshim, and overseas buyers, MSC maintains a solid market position.

As of the third quarter this year, MSC reported cumulative consolidated sales of 147.9 billion KRW and operating profit of 20 billion KRW, marking growth of 25.4% and 27.5% respectively compared to the same period last year. The product distribution forecast for this year is 42% seasoning products, 39% seafood processed products, 10% beverage products, and 8% edible colorants.

Hwang Seonghwan, a researcher at Shinhan Investment Corp., stated in the report, “The key growth drivers are stable growth through sales of food additives used in processed foods, and expansion of product portfolio and client base,” adding, “The strong third-quarter performance was due to increased demand for processed foods, a rebound effect from supply chain disruptions, and favorable exchange rates.”

The export volume of the main product, seafood processed products, has increased from 2,553 tons in 2020 to 2,983 tons last year. This increase in sales volume is evenly distributed across all product groups including beverages, edible colorants, and seasoning products.

Researcher Hwang explained, “MSC is the number one domestic food additive company handling all types of food additives and has the characteristic of quickly responding to delivery schedules of upstream clients through a large-scale production system,” adding, “In 2007, MSC established its subsidiary Myanmar MSC to secure raw material supply, completing vertical integration of carrageenan production.”

He forecasted that MSC will record sales of 198.7 billion KRW and operating profit of 26.7 billion KRW this year, representing growth of 22.6% and 25.7% respectively compared to the previous year.

He explained, “Exports have shown rapid growth from 45.1 billion KRW in 2019 to 53 billion KRW up to the third quarter this year,” adding, “The main product carrageenan is leading the export growth, and the current operating rate of the seafood processed product production line is at 96%, running at maximum capacity.”