Sajodaerim

Sajo Daerim is the core food affiliate of Sajo Group, a traditional processed-food company producing processed meats, seafood products and cooking oil.

It absorbed Sajo Haepyo in 2019 to integrate its cooking oil and sauce business, and Sajo Daerim has pursued external growth and strengthened cost and distribution competitiveness through the 2019 merger with Sajo Haepyo, the 2023 acquisition of starch maker Ingredion Korea, and the June acquisition of food-service company Foodist.

Notably, in June, Sajo CPK and Sajo Ohyang announced they would acquire 68.16% and 31.7% stakes in Foodist, respectively, meaning Sajo Daerim indirectly absorbed the food-service and distribution business through its subsidiary Sajo CPK.

Its core product lines include processed meats such as ham and sausages, seafood products like fish cakes, frozen seafood such as tuna and salmon, cooking oil, and industrial food materials such as starch syrup produced by Sajo CPK.

Sajo Foodist, a Sajo Daerim affiliate, aims to become a 'total food solution' company and is pursuing sales growth through a name change along with expansion into online retail and care-food business.

The FS (contracted food service and concession) segment is Sajo Foodist's core business, providing food materials and catering services to large contracted clients, and has recently served as a key growth driver.

Competitively, the company faces CJ CheilJedang, Daesang and Dongwon F&B in processed foods, Daesang, Samyang and CJ CheilJedang in starch sweeteners, and CJ Freshway and Hyundai Green Food in food-service distribution.

The controlling family and related parties hold a large stake, with governance increasingly centered on the third-generation owner, and while successive M&A has rapidly expanded scale, cost-structure changes and integration risk from newly consolidated affiliates have also grown.

Annual revenue rose steadily from KRW 2.019 trillion in 2022 to KRW 2.063 trillion in 2023, KRW 2.643 trillion in 2024 and KRW 3.500 trillion in 2025, driven by full-year consolidation from M&A.

However, the operating margin actually declined from 4.8% in 2022 to 6.2% in 2023, 5.0% in 2024 and 2.7% in 2025, reflecting a mix shift toward businesses with higher cost and fixed-cost ratios even as sales volume grew.

Indeed, it has been noted that Sajo Daerim's revenue increased while net income declined, as cost risk grew after the earnings of acquired Ingredion Korea and Foodist were consolidated.

Owner net income stayed positive at KRW 71.2 billion in 2022, KRW 91.3 billion in 2023 and KRW 91.8 billion in 2024, but turned negative at KRW -73.6 billion in 2025.

On a quarterly basis, both operating profit and net income remained positive through Q3 2025 (revenue KRW 937.0 billion, operating profit KRW 31.7 billion, owner net income KRW 26.1 billion), but in Q4 2025 owner net income deteriorated sharply to KRW -126.6 billion despite an operating profit of KRW 16.1 billion on revenue of KRW 848.6 billion.

After returning to a KRW 14.3 billion profit in Q1 2026, the company again posted a large net loss of KRW -114.5 billion in Q2 2026; notably, concerns that Sajo Daerim's financial strength was weakening, with cash flow shrinking and the risk of a fine materializing from subsidiary Sajo CPK's starch price-fixing case, had already been raised around March 2026, suggesting the two large losses coincide with this issue.

As a result, the trailing four-quarter (Q3 2025-Q2 2026) owner net income totals a loss of KRW -200.6 billion, even as 2025 annual operating cash flow of KRW 62.7 billion remained positive. The debt ratio also rose sharply, from 93.5% in 2022 to 174.7% in 2025, underscoring the financial burden tied to M&A funding.

The food industry faces persistent domestic consumption softness alongside cost volatility in grains, fats and labor, exposed simultaneously to downstream consumption cycles and upstream raw material prices.

The starch sweetener market in particular has an oligopoly structure where Daesang, Sajo CPK, Samyang and CJ CheilJedang together control 95.7% of the domestic B2B starch market and 86.4% of the starch sweetener market, a capital-intensive industry that is difficult for new entrants to penetrate.

This oligopoly was significantly shaken in July 2026 when the Fair Trade Commission decided to impose a total fine of KRW 747.58 billion for price-fixing of starch and starch sweetener products from May 2018 to October 2025, with individual fines of KRW 234.14 billion for Daesang, KRW 210.34 billion for Samyang, KRW 200.13 billion for Sajo CPK and KRW 102.97 billion for CJ CheilJedang.

This was the largest fine the Fair Trade Commission has ever imposed in a collusion case. Separately, the regulator determined that Daesang, Sajo CPK and Samyang colluded on prices for starch sweetener byproducts and sent an examination report, though a final ruling has not yet been made.

The government has applied a zero-percent quota tariff on about 2 million tons of imported industrial corn since 2021 to stabilize prices, but investigators found that starch sweetener prices rose by as much as 73% compared to the start of the collusion in May 2018 during a period of surging international corn prices, suggesting the policy benefit was not fully passed through.

In food service and distribution, the company competes with large players such as CJ Freshway, Hyundai Green Food and Ourhome, a segment characterized by stable, contract-based revenue.

Overall, 2025-2026 has been a period where both grain input costs and regulatory risk have come to the fore, with collusion-related cost burdens emerging as a new variable for industry earnings despite raw material stabilization.

Sajo Daerim has continued building a food value chain linking manufacturing, raw materials and distribution/food service through the 2019 Sajo Haepyo merger, the 2023 Sajo CPK acquisition and the 2024-2025 Foodist acquisition.

Sajo Foodist is pursuing a strategy to broaden its revenue base through new businesses such as online retail and care food, and the FS (contracted food service/concession) segment has been cited as a recent growth driver.

The remaining payment for the Sajo CPK acquisition is scheduled to be completed with installments of KRW 18 billion in February 2025, February 2026 and February 2027, meaning some additional funding burden could persist over the coming months.

Under the Fair Trade Commission's order for independent price re-determination, Sajo CPK and the other three firms must reset prices to pre-collusion competitive levels and report price changes to the regulator semi-annually for the next three years, which is expected to change pricing policy and margin structure in the starch business.

In addition, the Fair Trade Commission's review of the alleged byproduct price collusion is still ongoing, leaving room for further cost recognition depending on the outcome.

Continued share purchases by the controlling shareholder group (including Sajo Industries and Sajo Landertech) keep governance change and potential reduction in free float as points to watch.

Within the group, Sajo Daerim's role as a stable cash-generating affiliate has been emphasized, and realizing M&A synergies while improving cost structure is likely to be the key variable for earnings recovery.