Nongshim Co., South Korea's top instant noodle maker, is establishing its second factory in the United States by investing US$200 million (240 billion won), the largest investment since its founding. The company will start construction of the new plant early next year for completion at the end of 2021. Nongshim aims to generate sales of US$600 million (730 billion won) in the United States by 2025, more than double its current sales.
The planned factory will be built on a site of 154,000 square meters in Corona, California, 77 km southeast of Los Angeles. It is three times larger than its first factory.
South Korea's exports of ramen, or instant noodles, had more than tripled over the past decade from US$129.52 million (157.40 billion won) in 2008 to US$413.09 (502 billion won) in 2018, according to data from the Korea Customs Service (KCS). The figure between January and June this year came to US$219.93 million (267.20 billion), surpassing the half-yearly average last year.
The KCS’ statistics don’t include quantities produced and sold overseas by Nongshim. The global sales of South Korean ramen last year are estimated at US$1 billion (1.20 trillion won), including the ones produced and sold in local areas by Nongshim.
Nongshim is planning to build four production lines in its second plant in the United States, including two for instant fried noodles, one for dried noodles and one for raw noodles. This is the first time for the company to construct its production lines for dried noodles and raw noodles abroad.
Corona is located about 40 kilometers south from the company’s first factory in Rancho Cucamonga, California. Nongshim has decided to build its new plant not far from its first one considering the supply and demand of various ingredients and raw materials for production, efficiency of logistical costs and synergy effects through cooperation between the two factories. It also has a geographical advantage to supply products to South America, including Mexico.
An official from Nongshim said, “Currently, we have a logistics center in Chicago and New Jersey in the East Coast and will open our new logistics center in Dallas in October. We are planning to make the West Coast our production base and build logistics bases in major cities in the East Coast to raise efficiency of production and distribution.”