CJ NowCJ CheilJedang overcomes rising food prices with the rise of Korean cuisine and the biotechnology business in the global scene
Full-year 2022 revenue was KRW 18.7 trillion, up 19.3% year-on-year, while operating profit was KRW 1.2 trillion, up 7.6% year-on-year (excluding CJ Logistics).
CJ CheilJedang reached the milestone revenue of KRW 18.7 trillion last year, an increase of 19.3% year-on-year, with revenue increasing in overseas business, especially in the K-food and biotechnology sectors. The operating profit was KRW 1.2 trillion, up 7.6% year-on-year as the company enjoyed a favorable year for the food and biotech business with foreign nations (excluding CJ Logistics up to this point).
CJ CheilJedang also announced the consolidated statement of operations including CJ Logistics in through public disclosure on the 13th. It recorded revenue of KRW 30.7 trillion, up 14.4% year-on-year and an operating profit of KRW 1.6 trillion, up 9.2% year-on-year.
[Summary of Reported Full-year 2022 Results (KRW 100 million, % within the graph refers to the operating profit rate)]
Operating profit up 45% with great performance in the food division led by the rising popularity of K-food, while Schwan's Company broke the KRW 3 trillion and the KRW 200 billion mark in annual revenues and operating profit, respectively.
In the food business, CJ CheilJedang recorded KRW 11.1 trillion in revenue (+16.1% yoy) and KRW 623.8 billion (+12.5%) with impressive performance from K-food products centered around bibigo. The food business broke the KRW 10 trillion mark in annual revenue and KRW 600 billion mark in operating profit for the first time in company history.
Domestic food business saw a slight drop in operating profit due to high manufacturing costs and other expenses. The overseas business, however, drove up the overall performance by exceeding KRW 5 trillion in annual revenue and posting a 45% hike in operating profit. The share of global sales in food also hit a new high of 47%, on the back of the 56% growth in revenue of global strategic products (GSP), such as mandu, chicken, and processed rice in major markets including the US. Schwan's Company, in particular, passed KRW 200 billion in operating profit for the first time, as the company succeeded in reducing fixed costs by improving productivity, streamlining sales promotions, and increasing sales.
※Global Strategic Product: Seven strategic products (mandu, chicken, processed rice, rolls, K-sauce, kimchi, and dried seaweed).
By country, CJ CheilJedang has expanded the K-food territory not only in the US, where revenue is up about 20%, but also in Asia Pacific, Europe, Japan, and China, where the company has begun fully engaging in the local business to strengthen competitiveness. As for the US, mandu revenue from grocery channels increased by 66%, pushing up the annual market share to over 40% to maintain the top position. Revenue for frozen pizza also rose by 29%. In Europe and China, K-food has expanded its clout not only in mandu, the flagship product, but also in chicken and kimchi.
Domestic food revenue recorded KRW 5.9 trillion, up 13.9% year-on-year. CJ CheilJedang has released a series of products that boast high quality on par with that of the food served in restaurants available at a reasonable price. The company also increased the share of distribution through thriving channels, such as online stores, B2B, and convenience stores. In addition, CJ CheilJedang has made an effort to cut down costs across all value chains to gear up against inflation and rising production costs.
The biotechnology business led by green biotechnology, including amino acids and seasoning materials posted strong revenue of KRW 4.8 trillion (+30.1%), breaking the KRW 4 trillion mark. Regardless of inflation, the operating profit was KRW 636.7 billion, up 34.5% year-on-year. This is KRW 163.3 billion higher than that of last year.
As for amino acids, the flagship product, CJ CheilJedang continued to gain momentum thanks to the market dominance that gave the company a competitive advantage over rivals overseas. The company cemented its position with the cutting-edge compatible production technology and locational advantages across the world, including China, Southeast Asia, and North and South America. Specialty products with high profit margins also experienced growth throughout the year building on the differentiated technical marketing that offers the product and the solution at the same time.
* Specialty products in the biotechnology business: Valine, Arginine, Histidine, Isoleucine, Cysteine, Citrulline, TasteNrich
CJ Feed&Care, an independent subsidiary for the feed and livestock business, posted KRW 2.8 trillion in revenue (+15.3%), while recording KRW 7.7 billion in operating profit (-94.9%) due to rising grain prices, causing financial strain on the livestock business.
With economic uncertainties forecast to be amplified for some time, CJ CheilJedang plans to reduce production cost by improving the purchase and manufacturing capabilities to continue the growth momentum of key products in Korea and abroad. In the food business, the company will focus its capabilities on expanding the global territory for K-food and enhancing the profitability, while accelerating the development of new products in the new wellness business, including plant-based food and care food for those who need personalized nutrition. In the biotechnology business, CJ CheilJedang will strengthen competitiveness in new businesses that will drive growth, such as the red biotechnology business centered around PHA, a marine biodegradable material, and CJ Bioscience. Through the FNT business newly launched last year, CJ CheilJedang will zero in on securing the new growth engine including wellness food ingredients, nutrition, alternative proteins, and cultured proteins.
A CJ CheilJedang representative said, “We will secure structural competitiveness by developing new high value-added products, reinforcing new businesses, and making ample investment in R&D as we prepare for the future and continue fostering innovation.”