Instant noodle makers' 2021 operating profits sink on rising costs

South Korea's three major instant noodle makers saw their operating profits tumble in 2021 due largely to increased costs, their regulatory filings showed Wednesday.

Nongshim Co., the leading maker of instant noodles, or "ramyeon" in Korean, said that its 2021 operating income plunged 33.8 percent from the previous year.

Ottogi Co. and Samyang Foods Co. also saw their operating profits for last year shrink 16.1 percent and 31 percent on-year, respectively.

The companies attributed the sharp drop to an increase in raw materials, distribution and other costs.

But industry sources said their operating income declined sharply last year due to a low base effect.

A Samyang official said consumption of instant noodles surged in 2020 as people experienced social distancing measures caused by the coronavirus pandemic, but demand returned to pre-pandemic levels due to the prolonged COVID-19 outbreak.

Indeed, Nongshim's operating profit more than doubled in 2020 from a year earlier as more people stayed home, causing demand for instant noodles to rise sharply. Samyang's 2020 operating income jumped 21.9 percent from the prior year, with that of Ottogi shooting up 33.8 percent.

Industry watchers painted a rather rosy outlook for the major instant noodle makers, saying their sales will likely get a boost from price hikes conducted in August and September last year. (Yonhap)