In a move to expand its footprint in the health care sector, CJ CheilJedang will spin off its health and wellness business, the Korean food maker said on Nov. 23.
Set to be launched on Jan. 1, the new subsidiary CJ Wellcare will be entirely controlled by CJ CheilJedang.
The move comes after CJ Group Chairman Lee Jay-hyun in early November pledged to invest 10 trillion won ($8.41 billion) over the next three years to boost four growth engines -- one of which is the health and wellness sector.
Since the announcement, CJ CheilJedang has been aggressively investing in bio firms.
The firm acquired Batavia Biosciences, a Dutch biotech firm providing drug development and manufacturing services for pharmaceutical companies, in early November. Before that, CJ acquired ChunLab, a Korean company that specializes in microbiome data and related products, in July to expand its health supplement portfolio.
At the moment, CJ’s health care business is at a nascent stage, and accounted for only 100 billion won in sales this year.
The firm said it will increase its specialty products portfolio and eventually develop CJ Wellcare into a customized health supplement provider in the long run.
As part of such efforts CJ Wellcare will increase the number of product categories for its BYO probiotics brand while strengthening research and development to add more functional foods to its product lineup. It also plans to develop customized health supplements and probiotics with its bio partners, the firm said.
Korea’s functional foods and health supplement market is growing due to a heightened interest in health and wellness since the onset of the COVID-19 pandemic.
According to the Korea Health Supplements Association, the market for health supplements grew 6.6 percent on-year, reaching 4.9 trillion won in 2020. Nearly 80 percent of Korean households said they take at least one type of health supplement last year, Agriculture Ministry data showed.
By Kang Jae-eun (firstname.lastname@example.org)