Nongshim to Start Operating Second Plant in the U.S. Next Month

Nongshim announced on March 17 that it will start full-fledged operations of its second U.S. factory built in Rancho Cucamonga, California in April. The 26,800-square-meter factory is equipped with two high-speed production lines for container noodles and one for bag noodles and can produce 350 million ramen a year. Once the second plant goes live, Nongshim’s production capacity in the United States will reach 850 million units per year, including that of the first plant that became operative in 2005.

“We will achieve a 20 percent annual growth rate by expanding supply following the operation of the second plant, and increase annual sales in the North American market to US$800 million (about 972.5 billion won) by 2025,” a Nongshim official said. 

The United States is the world's 6th-largest ramen market, consuming more than five billion ramen noodles a year. In 2021, its market size stood at about 1.5 trillion won.

Nongshim is competing with Nissin for second place after Japan's Toyo Suisan. Nongshim's market share hit 15 percent in 2017 and has recently risen to the mid-20 percent range thanks to the K-food craze. Nongshim's sales in North America, including the United States and Canada, surged 55.5 percent from US$254 million (about 308 billion won) in 2019 to US$395 million (about 480 billion won) in 2021.

Premium product Shin Ramyun Black is driving Nongshim's growth in the U.S. market. Its sales in the United States were US$32 million (about 39 billion won) in 2021, up 25 percent from the previous year. The product is selling well, although its price is six times higher than those of Japanese products. Nongshim is also expanding its vegan product lineup to target local consumers.

Nongshim is also planning to expand its presence in the Latin American market. Mexico is the first target country. Mexico’s ramen market is worth US$400 million a year, dominated by low-priced Japanese ramen. Nongshim expects high growth potential considering the characteristics of Mexican consumers, who consume a lot of peppers and like a spicy taste. It is looking to grow into one of the top three ramen brands in the Mexican market within five years.

Nongshim is operating six production bases around the world. Based on a stable production and supply system, it plans to pump up its efforts to target overseas markets.

“We will continue to ramp up global sales by attaining double-digit growth every year and increase the proportion of overseas sales from the current 40 percent level to more than 50 percent within a few years,” the official said.