Nationwide Hamburger Chains Disrupted After Siwha Plant Shutdown
Most Stores Have Resumed Normal Operations... Concerns Remain Over Prolonged Impact
It has been one month since production was halted at SPC Samlip's Siwha plant following a fatal accident involving a worker. While the hamburger franchise industry managed to overcome the temporary shortage of buns by expanding in-house production and diversifying supply chains, concerns over the stability of supply structures persist. The current system, which relies heavily on SPC Samlip for bun supply, is being identified as a significant risk factor.
According to the food service industry on June 18, major burger franchises such as Lotteria, Mom's Touch, Burger King, and No Brand Burger are currently operating normally for the most part. However, in the one to two weeks immediately after the shutdown of the SPC Siwha plant, disruptions in bun supply forced some locations to temporarily close or restrict delivery services. The Siwha plant is a key production base, responsible for more than 30% of the hamburger bun production in Korea, and its shutdown had a ripple effect across the entire industry.
No Brand Burger, which had been entirely dependent on SPC Samlip for buns, saw its deliveries drop by 10?15% compared to usual and temporarily closed five directly operated stores. No Brand Burger operates approximately 210 locations in total. In response to the emergency, Shinsegae Food activated its own bakery production line, and all directly operated stores are now back to normal operations.
Mom's Touch was able to respond more flexibly because, in addition to SPC Samlip, it also sourced some buns through Bimbo QSR Korea. Mom's Touch, which operates around 1,500 stores nationwide, stated, "We have moved past the initial confusion, but are currently supplying 70?80% of the order quantities to each store."
Lotteria also experienced a bun shortage. About 10?15% of its approximately 1,300 locations faced supply disruptions due to early morning delivery delays. A Lotteria GRS representative said, "The main production facilities at the Siwha plant stopped, causing delays in early morning deliveries," adding, "Currently, we are receiving most of our supply from Lotte Wellfood, so the situation has stabilized."
Burger King distributed production to SPC's Seongnam and Yeongnam regional plants and filled the gap by sourcing some buns from bakeries such as Shilla Myungga and Euro Bake. All 500 or so locations are now operating normally.
The problem is that it remains unclear when the affected plant will resume normal operations. The previous day, police and the Ministry of Employment and Labor conducted a search and seizure of SPC Samlip's headquarters and the Siwha plant, officially launching an investigation. An industry insider commented, "In the past, plants would typically resume operations within about 40 days after an incident, but this time, there is a high possibility of a prolonged shutdown," adding, "With the heightened uncertainty, we are closely monitoring the situation."
Some point out that this incident has exposed a structural issue of 'supply chain risk' throughout the hamburger franchise industry. While SPC Samlip has production facilities in Seongnam, Daegu, and other locations in addition to Siwha, the Siwha plant accounts for the largest share of production. The structure is such that even the shutdown of a single plant can shake the entire industry.
An industry official stated, "Hamburger buns are a key ingredient that determines the taste and quality of a brand, making it difficult to easily switch to alternative suppliers. There are fewer than five hamburger bun manufacturers in Korea, and SPC Samlip is essentially the main supplier." The official added, "Going forward, diversifying suppliers or securing a certain level of in-house production capability will be a major challenge for the industry."
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