CJ Freshway aims to go beyond Asia and expand into Latin America
As the economic recession continues to grip Korea, domestic food ingredient retailers are seeking to secure competitiveness and expand their market presence through global business.
CJ Freshway, CJ Group's food materials distributor and food service provider for organizations (CEO Moon Jong-Suk), opened a South American office in Chile in February, a first in the domestic food materials distribution industry.
By opening the office, CJ Freshway aims to secure its global product competitiveness.
CJ Freshway plans to reinforce its competitiveness in primary commodities such as agricultural and livestock products, including seafood, fruit and beef, through its South American network including Chile as well as Peru and Colombia. The company will circulate products from its network in China and Vietnam as well as Korea. China and Vietnam have a high demand for South American meat, while the US and South America are showing strong needs for Vietnamese mackerel or basa (catfish).
CJ Freshway seeks to secure global product competitiveness in South America and gain opportunities to expand business in Asia.
While it has secured product competitiveness through its South American network, CJ Freshway is preparing to expand profit-oriented business in China and Vietnam.
The company's food material sourcing and distribution business in China is currently in good shape. Last August, CJ Freshway completed establishing a joint retail corporation with Yonghui Superstores in Shanghai, and last November, it paid 3.6 billion won, which is 30% of the investment.
The Shanghai distributor has been supplying agricultural and marine products including basa (catfish) and fruits such as dragon fruit and grapes to Yonghui Superstores, a large retailer in China. As the demand for imported meat is growing this year, the distributor is anticipated to double its revenue over last year by expanding the distribution of South American beef and pork.
Meanwhile, the Beijing joint corporation project led by Yonghui Superstores was withdrawn as the prerequisites set forth in the contract have not been met by the due date.
CJ Freshway's global business is showing remarkable progress not only in China but also in Vietnam. CJ Freshway entered the Vietnamese market with its food service for organizations business in 2012, and since last year, the company has reinforced its move in penetrating the local food materials market.
Last November, the company signed an MOU with Golden Gate, Vietnam's largest food service company, for integrating food material purchases worth 10 billion won per year, and this February, it began to supply imported meat to over 180 outlets of Golden Gate. The company also plans to discover good farms in Korea and increase the supply of Korean seasonal fruits to Saigon Trading Group, Vietnam's largest state-run retailer.
As the business in Vietnam is growing, CJ Freshway plans to expand distribution of food materials for organizations and imported meat by constructing a distribution center of 10,000 m2 in Vietnam this year, a first in the industry.
"As the competitiveness of a food material distributor depends on their global product competitiveness, we will diversify our global network and present various famous food materials around the world, while striving to identify business opportunities in Asian countries which have strong growth potential," said a source from CJ Freshway.