"Fish Cake as a Breadwinner"... Sajodaerim's 'Surprise Performance,' Leap to a Comprehensive Food Company

Sajo Daelim Reports Operating Profit of 128.6 Billion KRW Last Year, Up 32% YoY
Recently Acquired Starch and Sugar Company Ingredient Korea
Expands Food Business Portfolio with Materials Like Starch and Sugar

Last year, Sajogroup's leading affiliate, Sajodaerim, which achieved strong performance by focusing on processed seafood products such as fish cakes and tuna, is preparing to leap beyond its existing food business into a comprehensive materials company by acquiring starch and sugar company Ingredient Korea this year.

According to the Financial Supervisory Service's electronic disclosure system on the 20th, Sajodaerim's operating profit last year was 128.6 billion KRW, an increase of 31.7% compared to the previous year. During the same period, sales also rose 2.2% year-on-year to 2.0631 trillion KRW, and net profit recorded 131.6 billion KRW, up 54.6%.

The improvement in Sajodaerim's performance last year was led by its main processed seafood products such as fish cakes and tuna. According to Sajodaerim, its flagship brand 'Daerimseon Fish Cake' sold about 70 million units last year. In particular, the 'Daerimseon Busan Fish Cake' series led fish cake sales throughout the year, with high preference for products like the square fish cake 'Madangnori,' mainly used as side dishes.

As Daerimseon fish cake sales perform well, competition in the domestic surimi processed product market is intensifying. According to the Korea Agro-Fisheries & Food Trade Corporation (aT), Sajodaerim's surimi processed product sales in the domestic retail market last year amounted to 151.6 billion KRW, capturing a 23.9% market share among manufacturers. The market leader was CJ CheilJedang, with sales of 163.1 billion KRW and a 26.8% share.

Although it did not reach the top spot, the gap is gradually narrowing. The market share difference between the two companies, which was 3.9 percentage points in 2021, decreased to 3.3 percentage points the following year and further narrowed to 1.9 percentage points last year. While Sajodaerim is closing the market share gap, in terms of brand-specific market share last year, Daerimseon fish cake ranked first with 23.6%, far ahead of CJ CheilJedang’s ‘Samho Busan Fish Cake’ (9.5%), Jinju Ham’s ‘Cheonhajangsa’ (9.1%), and Hansung Enterprise’s ‘Kreami’ (6.2%).

Sajodaerim, which achieved strong results last year thanks to its core business, expects to take a step forward this year through the acquisition of Ingredient Korea, a food materials company. Ingredient Korea is a company that extracts starch and sugar from corn used as raw materials for processed foods such as bread and snacks. Recently, starch and sugar have been attracting attention as a high-growth area due to their application in various materials. Through this acquisition, Sajogroup plans to strengthen the materials sector of its existing food business, including cooking oil, sauces, and flour, and focus on expanding and developing high value-added products such as functional foods and food tech.

Earlier, Sajodaerim announced in November last year that it would acquire Ingredient Korea, the Korean subsidiary of the US-based Ingredion, for 384 billion KRW. Ingredient Korea originated from Dongyang Food, the first company to produce starch domestically. After being acquired by Doosan in 1979, it was operated as a joint venture between Doosan Group and US company ConAgra Products (now Ingredion) from 1999. In 2005, Doosan transferred its shares to the US side, making it a US company. With this acquisition contract by Sajogroup, Ingredient Korea will once again be operated under domestic capital. Ingredient Korea is one of the leading companies in the domestic starch and sugar market, along with market leader Daesang and Samyang Corporation, holding about a 30% market share domestically. Its sales in 2022 amounted to 461.1 billion KRW.

Along with the materials business, the existing processed seafood product business is also expected to contribute to performance improvement with new products. In September last year, Sajodaerim launched the 'Daerimseon 100% Korean Rice Fish Cake' series, introducing products such as ‘Tteok-eomuk-bokki’ (rice cake fish cake stir-fry), which can replace tteokbokki rice cakes. A Sajodaerim official explained, “Fish cakes usually have high demand in winter, the peak season for soup dishes, but through new products, we have established a foundation to secure stable sales throughout the year, which is also meaningful.”