Delfi announces Indonesia JV with South Korea's Orion Corp.
Orion Corp owns the Choco-Pie brand
Delfi, the Singapore-based confectioner formerly known as Petra Foods, is entering into a 50:50 joint venture with South Korean snack and candy manufacturer Orion Corp. to develop and sell a range of joint-branded products in Indonesia.
Both partners will have equal stakes in the joint venture called Delfi-Orion with a total initial capital commitment of US$3m.
Delfi said it brought "strong sales, marketing and distribution capabilities together with extensive market knowledge...of chocolate confectionery [and] other FMCG categories".
Choco-Pie owner Orion "will contribute product knowledge and manufacturing expertise; and the experience of having successfully grown their business globally, especially in China and Vietnam", Delfi said.
The Delfi-Orion venture will use Delfi's local distribution arm, while Orion will manufacture the products. The venture's main lines will be the Choco-Pie and a soft cupcake product. The two companies believe the growth potential of these products will be driven by Indonesia's young and growing population, increased urbanisation and by the growing demand for convenience products.
"We are very excited about this alliance with Orion, said John Chuang, Delfi's CEO. "It will allow us to extend our portfolio into the soft biscuit and cake category that has been developed and perfected by Orion over the years. With this synergistic Delfi-Orion partnership, which combines the respective strengths of both partners, we believe this collaboration will allow the joint venture to capitalise on the growth opportunities presented.
"I think a key advantage that the joint venture already has is that both partners are aligned in the vision of creating a successful venture. This combined with the expertise and infrastructure that the joint venture can tap on right from the beginning gives me confidence in the long term potential of the business. Through this relationship, we believe there is always the potential of both partners working together in other areas."
Hur Innchul, Orion's vice-chairman, added: "This is Orion's first-ever overseas joint venture partnership. We are very pleased to team up with the top confectionery company in Indonesia. It gives Orion a great opportunity to develop this fast growing market."
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