Japanese creator of the instant ramen eyes Hong Kong IPO, and promises hefty investment to spice up its products
China’s demand for low-priced instant noodles has plummeted – but the mighty Nissin Foods promises a shift to quality, with higher-priced ‘premium’ items
Japanese instant-noodle legend Nissin Foods Holdings – the maker of Cup Noodles and owner of big selling and well-known brands such as Demae Itcho – plans to spin off its China and Hong Kong business in an initial public offering (IPO) next month, expected to be worth up to HK$1.13 billion (US$145 million).
Pre-packed dried “ramen”, or Japanese-style instant noodles, have been staples for young and old for years across Asia, and the mainland still accounts for just over half of the offshoot’s revenues (53 per cent), according to the IPO document.
But as the country has become more affluent and health conscious, consumption patterns have changed, and the average instant noodle appears to be falling quickly out of favour.
Nissin promised on Tuesday, however, the new spin off will use the proceeds to upgrade the quality of its products, through improved manufacturing facilities, an expanded distribution and sales network, as well as establishing potential strategic partnerships and seeking mainland mergers and acquisitions.
The key ingredient to its new business’s direction, insisted Kiyotaka Ando – the grandson of the late Momofuku Ando, often referred simply as the “Father of Instant Noodles” who founded Nissin Foods Holdings in 1948 – will be more quality products.
“Demand is shifting towards premium,” Ando added. “We will be focused on selling premium instant noodles – a segment that just keeps on growing.”