SCPE buys controlling stake in Korean meat importer

The company is Korea’s fourth-largest importer, processor, and distributor of meat – primarily beef. It sources in bulk from the likes of Cargill and JBS and supplies a network of more than 1,000 restaurant chains, franchises, wholesalers, and meat processors. A café-style butcher shop was recently opened where customers can taste their purchases on site with rice balls and drinks.

According to SCPE, Sunwoo’s profit margins were on average five times larger than those of its peers over the last three years because the company does not use intermediaries such as supermarkets. The company has posted compound annual revenue growth of 37.3% since 2014. Revenue for 2018 is up 26.5% year-on-year, while operating profit is up 63.8%.

“It is not just the outstanding profitability that makes Sunwoo special,” said Taeyub Kim, representative director for SCPE in Korea, in a statement. “It’s also Sunwoo’s ability to source such a key staple directly from large packers. Not everyone can do that. With this sourcing stability, we can readily explore new possibilities, from a retail butcher shop franchise to an online mall.”

He added that there is scope for further growth, driven by the increasing number of single-person households and Korea’s aging population. The home meal replacement (HMR) market is still one eighth that of Japan. Sunwoo may also launch its own HMR brands.

The SCPE team manages around $1 billion worth of PE investments held on Standard Chartered’s balance sheet and approximately $2.1 billion that was spun out into stand-alone vehicles through a set of secondary transactions. Standard Chartered wants to exit the principal investment business and last year, SCPE relaunched an effort to spin out its team and the balance sheet assets.

The firm’s most recent previous investment in Korea came in December 2017 with the purchase of a controlling interest in Sung Gyung Food, the country’s second-largest toasted and seasoned seaweed producer, for $123.5 million.

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• Topics
• North Asia
• Buyouts
• Consumer
• South Korea
• Standard Chartered Private Equity