] Korea’s Nongshim is set to establish a joint venture with Japan-based Ajinomoto for the production of Vono soup in Korea, according to news reports on Dec. 22.
The Korean firm signed the deal in Tokyo, Japan, in a ceremony attended by top executives including Nongshim CEO Park Jun and Ajinomoto President Takaaki Nishii.
|Nongshim CEO Park Jun (left) and Ajinomoto President Takaaki Nishii (right) at the signing ceremony of the joint venture contract. Nongshim.|
As per the agreement, the company plans to commence construction of a powdered soup factory in the Pyeongtaek Nongshim Poseung Logistics Center, Gyeonggi Province, in the first half of 2018, and aims to complete the project in 2019. The total investment amounts to 13 billion won (US$12.10 million) with Nongshim contributing 49 percent and the rest funded by its Japanese partner.
Nongshim seeks to grow its instant soup market share by strengthening its portfolio of powdered soup brand, and plans to continue developing products suitable for the local market.
The partnership between the two companies began in 2006 when Nongshim started selling Vono soup in the domestic market. The soup is prepared simply by pouring boiling water and stirring. It has been growing at a high rate of about 30 percent over the past five years and is expanding its brand awareness. Vono soup has logged annual sales of 17 billion won with a market share of 32 percent.
“Through this JV, we expect to prepare for the growing domestic instant soup market and to exchange know-how of history and tradition with each other to create positive synergy,” said Nongshim CEO Park Jun.
Ajinomoto is a leading food company established in 1909. The Japanese firm started with seasoning and expanded its business to bio and medicine. The company has offices in more than 30 countries around the world. Its annual sales are around 10 trillion won, of which soup accounts for more than 60 percent in the Japanese market.
By Alex Lee (firstname.lastname@example.org