Orion Holdings Corp., a leading South Korean confectionery and snack maker, has been active in overseas markets for decades, particularly in China and Southeast Asia.
In 1995, it built its first Chinese affiliate, Pan Orion Corp. In Vietnam, Orion operates two factories — one in Hanoi and the other in Ho Chi Minh City.
The company’s efforts have led to business growth in target countries and decent dividends.
Last month, the snack maker’s flagship unit, Orion Corp., was paid out 133.5 billion won ($101 million) in its first dividend by Pan Orion since the launch of the Chinese affiliate.
“We are now posting over 200 billion won in operating profit and 1.2 trillion won in sales annually from our Chinese business. Our facility investment in China has been completed, meaning we expect a steady stream of dividends from China,” Orion Holdings Vice Chairman and Chief Executive Hur In-cheol told The Korean Economic Daily in a phone interview.
Orion Food Vina Co., the Korean snack maker's wholly owned subsidiary in Vietnam, paid 111.2 billion won in annual dividends to Orion Holdings in 2023. The Vietnamese unit is expected to pay 103.8 billion won in dividends this year, including 41.5 billion won in interim dividends already paid in April.
Orion Holdings expects 348.5 billion won in total dividends from China and Vietnam in 2023 and this year.
FACILITY EXPANSION IN KOREA
Hur said Orion plans to use dividends from overseas units to expand its main facility in Jincheon, Korea.
The company plans to build a new packaging plant and a logistics center in Jincheon, breaking ground on these facilities as early as this year.
A Choco-Pie commercial in Vietnam featuring South Korean entertainer Lee Kwang-soo (Courtesy of Orion Food Vina) “Our goal is to move the Gyeonggi Ansan packaging plant and Suji logistics center to Jincheon to integrate the production, packaging and logistics bases and increase efficiency,” said the vice chairman.
He said Orion Holdings also plans to steadily increase its dividend payment ratio. In February, the company said it is raising its dividend payout by 20% this year over last year.
M&A EFFORTS
The company is also vigorously pursuing mergers and acquisitions.
After the acquisition, Orion changed the biotech firm’s name to LigaChem Biosciences Inc.
Orion's popular snack Kkobuk Chips “In our mainstay food, snack and confectionery businesses, we’re actively looking for M&A targets. If a good opportunity comes up, we will review a takeover,” he said.
Best known for its signature snack cake Choco-Pie, Orion has largely been active in Asian markets.
OVERSEAS FOCUS ON INDIA, US
The vice chairman said the company’s current overseas business focus is on India.
Orion built a production plant in Rajasthan, a state in northwest India, in 2021 and is ramping up its facilities there to meet growing Indian demand for Choco-Pie and other snacks.
Orion's LigaChem Biosciences, previously known as LegoChem Biosciences “If we make money from our overseas branches, we will spend in the relevant country first and then invest extra profit from the country into Korea for facility expansions, shareholder returns and new businesses,” he said.
The vice chairman said he is also considering building a plant in the US, where Orion’s sales are growing rapidly.
Orion’s Turtle Chips, known as Kkobuk Chips in certain regions including in Korea, and Choco Songi are particularly popular among teens in the US, he said.
US sales of Turtle Chips are expected to surpass 20 billion won this year, up from 12 billion won in 2023.
“If a single product’s annual sales go above 40 billion, we’ll need a local factory to produce it there,” he said.
Write to Sul-Li Jun at sljun@hankyung.com In-Soo Nam edited this article.
