[Photo provided by Orion Corp.]
South Korea’s confectionary giant Orion Corp. will invest 88 billion won ($81 million) to build a new manufacturing facility in Russia to meet insatiable demand for its chocolate-covered marshmallow biscuits.
Orion said on Thursday that it has signed an agreement with the federal subject of Tver Oblast in Russia to build a new factory with a total floor area of 38,873 square meters at a site of 106,950 square meters within an industrial park in Raslovo in Tver.
Manufacturing lines in the existing factory in Tver that was built in 2006 will be transferred to the new factory, which would be10 times larger, once its construction is completed.
The company will break ground for the new production facility next year with an aim to complete it by 2020. The new factory is expected to produce up to 200 billion won worth of snacks annually.
Orion made its first entry into Russia’s confectionary market in 1993 with its best-seller Choco Pie, a small round chocolate-covered snack filled with marshmallow inside. The snack was popularly sought by Russian consumers and led to a surge in local sales. Orion set up its first manufacturing facility in Tver in 2006 to meet increasing demand and a second one in Novosibirsk in 2008. Last year, more than 600 million pieces of Choco Pies produced in the two factories were sold in Russia. Orion plans to expand Choco Pie supply to more than 1 billion pieces in Russia once the new manufacturing plant starts operating.
An unnamed official from Orion expected that the new facility in Russia would pave the way to new markets in Europe, particularly eastern European countries. The company hopes to repeat the success that it has made in China and Vietnam in Europe and Eurasia.
By Lee Hee-soo and Lee Eun-joo
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