[Edaily Reporter kim mi-kyung ] CJ CheilJedang Corp expanded its revenue in the second quarter of this year, driven by strong sales in its overseas food business and biotech division, but its profitability declined. The company was unable to prevent the erosion of profitability as prices for raw materials and supplies rose due to a strong exchange rate and high oil prices. CJ CheilJedang Corp’s strategy for the second half of the year is to improve profitability by expanding global sales of K-Food and strengthening its portfolio with a focus on high-margin products.

CJ CheilJedang Corp(097950)The company announced on the 11th that its consolidated revenue for the second quarter of this year, excluding its subsidiary CJ LOGISTICS, reached 4.195 trillion won, a 10.2% increase compared to the same period last year. In contrast, operating profit fell 18.4% to 161.9 billion won. Although revenue grew at a double-digit rate, profits actually declined as the cost burden from raw materials, packaging, and logistics expenses increased.

By business division, revenue from the flagship food business reached 2.8441 trillion won, a 5.8% increase from the previous year, but operating profit fell 21.3% to 70.9 billion won. The overseas food business drove sales growth. Thanks to expanded sales of Global Strategic Products (GSPs) such as dumplings and Haetban, second-quarter overseas food sales reached 1.5072 trillion won, a 10.1% increase compared to the same period last year. In the Americas, sales of dumplings and Haetban rose by 31% and 49%, respectively, driving growth. In Europe, revenue increased by 19% thanks to strong sales of key GSPs such as dumplings, chicken, and noodles, while in the Asia-Pacific (APAC) region, revenue grew by 21% as sales of ambient and frozen products—including dumplings, rolls, and seaweed—increased.

Revenue from the domestic food business rose by only 1.4% to 1.3369 trillion won. While processed food revenue increased by 4% compared to the same period last year, revenue from the ingredients business—including starch—declined by 2% due to cost pressures from high exchange rates and falling selling prices. Meanwhile, the Bio Business Division posted second-quarter revenue of 1.3509 trillion won, a 20.8% increase year-over-year, driven by higher sales volumes of specialty products and key items such as lysine. However, operating profit fell 15.9% to 91 billion won as competition in the sector intensified and the recovery of selling prices was delayed.

Based on its recent business division reorganization, CJ CheilJedang Corp plans to accelerate efforts to strengthen its competitiveness starting in the third quarter. Previously, on the 1st of last month, the company reorganized its business structure—which had been divided into “Food” and “Bio”—into three divisions: “Lifestyle Foods,” “Technology Materials,” and “Core Materials,” to proactively respond to the rapidly changing business environment and future uncertainties. It also announced a policy to boldly divest from marginal businesses with low growth potential and profitability.

In line with the global growth of K-Food, the company plans to further expand sales of its flagship GSP products and defend profitability in the domestic market through sales strategies targeting high-margin categories. The bio business will also pursue sales growth while reducing manufacturing costs and fixed expenses. Non-core assets and businesses will also be divested. The company is proceeding with the sale of non-core real estate assets, such as the Incheon Plant No. 3 and the Nonsan Plant No. 3 in South Chungcheong Province, while also reviewing the spin-off and sale of the Starch Division as a separate legal entity.

A CJ CheilJedang Corp official stated, “We will accelerate the expansion of K-Food into new global markets by leveraging global strategic products such as dumplings and Haetban, and focus on improving profitability by expanding sales in the bio business and reducing manufacturing costs and fixed expenses.”