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CJ CheilJedang Decides to Invest 900 Billion Won!

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CJ CheilJedang Decides to Invest 900 Billion Won
in New Growth Engines



- Large-scale investment plan to secure future growth engines


CJ CheilJedang will build a world-class, cutting-edge food production base in Korea and invest heavily in the acquisition of the world's leading high-protein vegetable ingredient company. The decision was made to ramp up the competitiveness of its core business and to evolve into a sustainable business portfolio in rapidly changing domestic and overseas business environments.

This is the first massive investment plan since Chairman Lee Jay-Hyun’s return to the management of the group. Last month, Lee said in the opening ceremony of CJ Blossom Park that he will invest 36 trillion won by 2020, stating, "We will secure the group’s future growth engines as an urgent priority and put unfinished businesses back on the right track." Chairman Lee exhibited his intention to contribute to the growth of the national economy by fostering businesses that can create future value through technological advancement and global M&As.

- Construction of most advanced food production base in world

This is the first massive investment plan since Chairman Lee Jay-Hyun’s return to the management of the group. Last month, Lee said in the opening ceremony of CJ Blossom Park that he will invest 36 trillion won by 2020, stating, "We will secure the group’s future growth engines as an urgent priority and put unfinished businesses back on the right track." Chairman Lee exhibited his intention to contribute to the growth of the national economy by fostering businesses that can create future value through technological advancement and global M&As.

CJ CheilJedang will invest 540 billion won in Jincheon, Chungbuk Province by 2020 and build a world-class food integrated production base featuring cutting-edge technology. After its completion, the company’s annual production is expected to reach 500 billion won. The factory is scheduled to start operations in August this year and is expected to be fully operational in October of next year. The factory will be built on land of about 100,000 pyeong (the size of 46 football fields combined) at Jincheon Songdu Industrial Complex and will be capable of producing up to 120,000 tons per year. This will be the largest processed food factory in Korea.

The integrated production base that will lead the innovation of food manufacturing will be constructed as an intelligent production factory which raises productivity, quality and customer satisfaction by applying information and communication technology (ICT) loaded with digital automation solutions to production processes. The base will elevate its R&D and manufacturing competitiveness in processed foods to the highest level in the world, focusing on HMRs (home meal replacements). CJ CheilJedang drafted a plan to foster the base into becoming a nexus of mid- to long-term future business development and technology development.

In this factory, CJ CheilJedang produces products such as Hetbahn (Cupbahn), meat processed foods, frozen processed foods, and HMRs. The company will introduce a mass-production system that integrates production of products by applying new technologies/methods and build a multi-product mass production system that can flexibly manufacture various products by converting some of the core processes into modules. CJ CheilJedang is planning to secure differentiated competitiveness with innovative packaging technology, the development of various complex products and food safety infrastructure.

- Acquisition of World's Leading High-Protein Vegetable Ingredient Company

Apart from domestic investment, CJ CheilJedang will actively pursue global M&As. The company will acquire Brazilian Selecta, a high-protein vegetable company, for 360 billion won. Selecta is a global leader in the production of SPC or soy protein concentrate, a high-protein vegetable ingredient, with sales of 400 billion won and operating profit of 55 billion won last year. The company has a global sales network spanning 37 countries. As Brazilian Selecta is located in a major producing region of soybeans, a main ingredient, the company possesses strong competitiveness in logistics.

CJ CheilJedang will build a business structure that produces both concentrated soybean protein and fermented soybean meal, which are representative products among high-protein vegetable feed materials. Differentiated fermentation/enzymatic technology makes it possible to expand product portfolios by species (swine, fish, poultry). Selecta is expected to have competitiveness to help realize synergies with CJ CheilJedang’s business such as bio, and bioresources.



▲ A view of Brazilian vegetable high-protein material company Selecta


The global high-protein vegetable feed market is estimated at 1.6 trillion won, and has grown steadily with a 7% CAGR over the past five years. The main products are fermented soybean meal made by fermenting soybean by-products and concentrated soybean protein made from soybean meal protein. CJ CheilJedang is steadily expanding its fermented soybean meal business through efforts such as constructing its first overseas fermented soybean meal factory in Vietnam at the end of last year. Its strategy is to unlock business synergy and drive future growth by acquiring Selecta which has secured global competitiveness in the concentrated soybean protein business.

CJ CheilJedang will expand its business by scaling up its production lines and producing bio-utilization products using enzymatic technology after its acquisition of Selecta. By way of this plan, the company will soar to top of the global market by posting more than 800 billion won in sales in the global vegetable high-protein materials market by 2020 with the domestic and Vietnamese production bases of fermented soybeans, and producing new materials such as SPC.

"This investment is the first step towards becoming a global company that leads in the fields of food and bioengineering via our global competitiveness in food processing technology and biotechnology, based with on Chairman Lee’s business philosophy of contributing to the growth of the nation via business activities,” said Kim Chul-ha, vice chairman of CJ CheilJedang. "We will achieve Great CJ in 2020 by steadily expanding our business areas based on ONLYONE technology."