Korean Spicy Flavor Flies to Somalia and Lebanon... Buldak Overseas Factory 'Under Consideration'

Possibility of Overseas Production Factories Raised in Securities Industry
Samyang Foods "Reviewing Domestic and International Options After Completion of Miryang 2 Factory"

The representative K-ramen brand, Buldak Bokkeummyeon, which is experiencing supply shortages due to a global syndrome, is seeking additional production bases. As the spicy flavor of Buldak has gained fame beyond borders, this year it has received love calls from Lebanon in the Middle East, following Somalia in East Africa and Morocco in North Africa.

According to the food industry on the 6th, Samyang Foods is reviewing the establishment of domestic and overseas production facilities after the completion of the Miryang Plant 2 in the first half of next year to respond to the flood of orders. A representative of Samyang Round Square, the holding company of Samyang Foods, said, "The Miryang Plant 2 is expected to start operations as early as May, and around the time of completion, we plan to review the expansion of a new factory," adding, "Nothing has been decided yet, and it could be domestic or overseas." He added, "Since laws and regulations differ by country, several locations are under consideration."

Possibility of Establishing Overseas Factory Raised

Already, the securities industry has raised the possibility of Samyang Foods expanding its overseas factories. Kim Taehyun, a researcher at IBK Investment & Securities, stated in a recent report, "It has been understood that Samyang Foods is keeping the possibility of establishing overseas production plants open and is considering additional expansions after the Miryang Plant 2." Samyang Foods announced the establishment of Miryang Plant 2 in August last year to keep pace with the surge in demand for Buldak Bokkeummyeon, and the new plant is scheduled for completion in the first half of next year. Through the new factory, Samyang Foods' annual production capacity will increase by 40%, from 1.8 billion units to 2.5 billion units, but even this is insufficient, so they are looking for new production sites.

The location is undecided, but the establishment of a new factory after Miryang Plant 2 is a foregone conclusion. Buldak Bokkeummyeon still faces a severe supply shortage compared to demand overseas. Taking the United States, one of the largest export countries, as an example, although it has been stocked in all Walmart stores, which have the largest sales share, the shelves have not been fully stocked. In the case of Costco, which supplies the second-largest amount of Buldak Bokkeummyeon, the store entry rate is only 50%. Since it newly entered Target in September, the sales growth potential of Buldak Bokkeummyeon remains significant.

Expansion into Somalia, Morocco, Lebanon, and Tajikistan

Moreover, demand in Europe, which has rapidly emerged as a new market, is expanding quickly around main channels such as the Netherlands, Germany, and Poland. Researcher Kim predicted, "The largest market, China, has not yet fully expanded sales channels to secondary cities, so there is still high potential for additional growth of Buldak Bokkeummyeon."

Currently, Buldak Bokkeummyeon is sold in over 100 countries worldwide. Besides major K-food export countries like the United States, China, and Japan, it is also sold in countries whose locations are less well known, such as Belarus and Brunei. This year, it successfully expanded into Somalia, Morocco, Lebanon, as well as Tajikistan in Central Asia and Hungary in Europe. This highlights the fame of Buldak Bokkeummyeon. Recently, as interest in K-food such as bunsik (Korean street food) has increased, not only Buldak Bokkeummyeon but also Buldak Tteokbokki has been gaining attention. First launched domestically in 2018, Buldak Tteokbokki is now exported to over 60 countries, supporting Buldak Bokkeummyeon. Therefore, further expansion of production bases seems inevitable.

The effects Samyang Foods can enjoy vary depending on the location of the new factory. Until now, Samyang Foods has operated factories only domestically in Wonju, Gangwon Province; Miryang, Gyeongnam Province; and Iksan, Jeonbuk Province. Therefore, all quantities exported overseas had to cross borders. Thanks to the continued strength of the dollar, Samyang Foods gained a windfall from expanded sales, but domestic production has the limitation of negatively affecting profitability when exchange rates fall. Additionally, there is high volatility in performance due to logistics freight costs. Establishing overseas factories has the advantage of freeing the company from export regulations. This allows for quick responses to demand and consumer needs in nearby markets, reduces logistics costs, and enables the establishment of a solid distribution network.