By Park Si-soo
CJ Group said Wednesday its logistics and retail businesses outperformed its food unit, the long-standing driving force of the company in the first half of this year for the first time in the company’s history.
This outcome indicates the mid-tier conglomerate has successfully diversified its revenue sources and the dual industries will accelerate the firm’s growth.
CJ said its four logistics and retail affiliates — CJ Mall, CJ Korea Express, CJ LGLS, and CJ Olive Young — posted 4.57 trillion won ($4.02 billion) in sales in the January-June period, accounting for 39.8 percent of the group’s combined sales during the period. Its three food companies — CJ Cheil Jedang, CJ Foodville, and CJ Freshway — recorded 4.26 trillion won, accounting for 37.1 percent of the combined sales.
The group’s entertainment and media units — CJ E&M, CJ CGV, and CJ Hellovision — posted 1.47 trillion won in sales, accounting for 12.8 percent of the group’s entire sales, while its bioengineering unit earned 999 billion won, accounting for 8.7 percent.
CJ officials said the logistics and retail segment’s portion in the combined sales jumped nearly 10 percent this year thanks largely to the group’s acquisition of a cash-strapped logistics firm last December, and was renamed CJ Korea Express. The food business segment’s portion dropped by nearly 7 percent from last year’s 44.4 percent, they explained.
Officials said this outcome is evidence that the group’s long-term growth strategy is progressing smoothly.
“Our strategy puts focus on balanced growth of the four segments,” a CJ spokesman said. “In the past, the group relied heavily on the food business, but this is not the case. The group will put more resources towards entertainment and bioengineering segments in order to get them, in the long run, to the same level of the food and logistics segments.”
Analysts raised a rosy outlook on CJ’s entertainment business. The group’s sales in that area have continued to increase thanks to growing demand for Korean firms and TV programs in Asian countries such as Japan, Thailand, and the Philippines. This is quickly spreading to the United States, Europe and as far away as Brazil and Argentina.
The group is taking advantage of the trend in promoting Koran food worldwide. CJ Foodville recently opened a restaurant in London specializing in the country’s signature dish, “bibimbap” (steamed rice mixed with meat, vegetables and red pepper paste). CJ plans to open up to 20 such restaurants in eight countries by the end of this year.