Doosan said that it was divesting the division, which makes Chongga brand kimchi as well as tofu, seaweed and soy sauce, to reduce debt.

The business accounted for almost half the sales of its human and animal feed unit's annual 240 billion. However profits made on animal feed had been eroded by losses at the food unit, a Doosan spokesman told AP-Foodtechnology.com.

The company has seen increasing competition in the food sector from CJ Corp, Pulmuone and low-priced Chinese imports, according to Reuters.

The firm is also getting ready for a transition into the group's holding company and therefore needs to streamline underpeforming units and focus on its growing construction and machinery business. The company has been undergoing difficulties in the transition due to a debt ratio as high as 300 per cent, it said.

For Daesang, the food giant will add the country's leading kimchi brand to its large portfolio.

Kimchi is almost a staple food in Korea, eaten as a side dish with most meals. The market is currently seeing double-digit growth as young consumers turn to processed products rather than making it at home. Doosan estimates the kimchi market at KW150 billion in sales.

The food is also increasingly exported to markets like Japan and even Western countries.