Lotte's Shin Yoo-yeol to Lead New Joint Venture in Singapore

Lotte plans to launch a joint venture in Singapore next month, combining its food subsidiaries from Korea and Japan. This move marks a significant step in Chairman Shin Dong-bin's 'One Lotte' strategy for the food sector.

On June 30, Lotte announced that Lotte Wellfood and Japan's Lotte Confectionery have received board approval and regulatory clearance to officially establish the joint venture next month. The new entity will oversee the Asian operations of both companies, streamlining management and decision-making processes that were previously divided by business lines.

Shin Yoo-yeol, head of Lotte Holdings' Future Growth Division, will chair the board and lead efforts to create synergies between the two countries' food companies and develop overseas business strategies. The joint venture aims to enhance operational efficiency by integrating production, sales, and logistics infrastructures, while also fostering global mega brands, launching new products through joint research and development, optimizing raw material procurement and marketing, and entering new markets.

The establishment of this joint venture comes as domestic market growth in both countries slows, prompting a strategy to cultivate overseas business as a key growth driver. Chairman Shin has regularly chaired 'One Lotte Food Strategy Meetings' to emphasize the importance of collaboration between the two companies to strengthen global competitiveness.

Indeed, the two companies have expanded their collaboration in areas such as raw material sourcing, joint marketing, and cross-selling products. As a result, Lotte Wellfood's overseas sales reached 1.2047 trillion won last year, a 14.4% increase from the previous year. Japan's Lotte Confectionery also reported approximately 900 billion won in overseas sales, primarily from markets like Vietnam and Indonesia. The global mega brand Pepero, selected as the first of its kind, saw its overseas sales grow by 24% last year and an additional 33% in the first quarter of this year.

Lotte is not only expanding cooperation in the food sector but also in various fields such as hotels, biotechnology, and startup development. In September of last year, Lotte Hotel & Resort and Japan's Lotte Holdings established a joint venture, 'Lotte Hotels Japan,' to jointly pursue hotel operations in Japan.

A Lotte official stated, "We will combine the strengths of both companies to nurture mega brands and explore new markets, enhancing our global competitiveness."

Meanwhile, Chairman Shin emphasized during a VCM meeting in the first half of last year that, considering the domestic economic and demographic outlook, expanding into overseas markets is the most critical goal for the group's growth.