South Korean firms up instant noodles investment in Vietnam
South Korean firms up instant noodles investment in Vietnam
South Korean instant noodle firms Nongshim and Ottogi are increasing their Vietnam investments with an eye on Southeast Asia as a whole.
"Vietnam will be positioned as a base for advancing into Southeast Asia," Korea Times quoted a Nongshim official as saying. Nongshim, a leading Korean instant noodle maker, established its first subsidiary in Vietnam last October.
Nongshim Vietnam reported $2.53 million in sales and around $135,000 net income in the first six months of this year.
The Nongshim source said that even though instant noodle sales in Vietnam is weaker in comparison to China, the U.S., Japan and Australia, the country with a population of nearly 100 million was "growing fast."
A report by market research firm Kantar Worldpanel also said that this year, as of June 16, a Vietnamese person in rural areas consumed 56 packs of instant noodles on average, up 5 percent year-on-year. The corresponding figure in urban areas was 36 packs, up 4 percent.
Around 90 percent of Vietnamese households bought instant noodles in that period, it said.
Ottogi is also on the same path. The company, which specializes in condiments, already has one production facility in Hanoi, is considering a second plant near the capital, depending on the sales of their ramen products in Vietnam.
An Ottogi official said strained bilateral ties with China is prompting the company to shift its focus to Vietnam to "make inroads into Southeast Asia."
"Vietnam meets the company’s requirements of having a large consumer base, rapidly rising incomes and a love for spicy food," the official said. It now aims to improve local distribution and expand sales to supermarkets and convenience stores.
It plans to partner with South Korean retailers like E-mart and Lotte Mart to boost sales and brand awareness.
Both brands believe Vietnam is a promising and potential market.
Vietnam was the world’s fifth largest instant noodles consumer last year with 5.2 billion servings, a 2.8 percent increase from 2017, according to the World Instant Noodles Association.
