South Korean food conglomerate CJ Group has embarked on the task of streamlining its eatery operations in China, joining other Korean retailers in retiring from the world’s largest market where foreign brands are quickly losing ground due to rapid localization.

Park Keun-hee, vice chairman of CJ Group, said Wednesday the company would shutter its VIPS buffet restaurant in China as of Mar. 29. Plans are also underway to gradually downscale its 165 Tous Les Jours bakery outlets, 21 A Twosome Place cafes and nine Bibigo restaurants in the country, he added.

CJ Foodville’s Chinese entity has seen its losses balloon over the years as it failed to turn a single profit since its launch in the country in 2008.

This is Park’s first restructuring attempt since his appointment to chief executive of CJ Group in October 2018.

He instead expressed interest in M&As as new sources of growth, saying the company is on the lookout for potential deals around the world. One company of particular interest is the U.S. additives company Prinova, he added.

The Korean food giant has been snatching up a string of companies – mostly in developed markets – in recent months in an effort to brand itself as a global food name. In November 2018, CJ CheilJedang, the food manufacturing unit of CJ Group, closed a deal to buy a controlling 80 percent stake in the U.S. food distributor Schwan’s Company for $1.84 billion, its biggest overseas M&A ever. This came on the heels of two other acquisitions, one of U.S.-based Kahiki Foods and the other of Germany’s Mainfrost.

Park, who doubles as the CEO of CJ Logistics, also vowed to shore up the profitability of its logistics business. He said the company, which has 18,000 deliverymen on its payroll, is forced to raise delivery costs following the steep hike in the minimum wage and the shortened workweek enforced in Korea last year. Earlier this month, the company raised the delivery unit cost per box by 100 won ($0.09) for corporate customers.

By Kim Gi-jung and Kim Hyo-jin

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]