Lotte Wellfood, a South Korean international confectionery company, has announced the merger of its Indian subsidiaries Lotte India and Havmor Ice Cream for creating one integrated entity in India. This announcement has been called One India, a strategic initiative of Lotte Wellfood that eyes enhancing brand presence and securing growth momentum in the Indian confectionery and ice cream market. In the process, with this merger, the integrated entity will target an annual sales of 1 Trillion KRW (approximately Rs 6000 crore) through a series of investments and secure future growth drivers.
Lotte Wellfood announced its plan for a new ice cream manufacturing facility for Havmor, its first investment under the One India initiative, with an investment of Rs 400 crore in Pune, Maharashtra. Through this, it will likely extend regional coverage from west to south-central regions of India.
Commenting on this very strategic move, Chang-Yeop Lee, CEO Lotte Wellfood said, “With the launch of ONE INDIA, we intend to consolidate Lotte’s brand presence and expedite growth momentum in the India market. Our long-term vision includes sizeable investments in India, one of the emerging markets that hold the world’s largest population and strong economic growth. This merger of Indian subsidiaries is one of the strategies to enhance management efficiency and maximize synergies. Apart from strategic growth, we are currently developing the local Lotte brand with diversified product portfolios and the integration of logistics and production bases. In this respect, the merger will definitely play a large role in winning greater market share and climbing sales. This will help us to offer an entire range of products to the consumers in order to meet diversified preference and need.
The Board of Directors of Lotte India and Havmor approved a merger plan on 29 July. In the proposed merger, Havmor Ice Cream will merge with Lotte India and both brands will retain their individual identities for smooth operations. Merger is likely to get completed by the second half of this year, and plans are to launch the new integrated entity early next year. Lotte India had earlier invested over Rs 210 crore in setting up the first overseas production base for Lotte Pepero at its factory in Haryana as part of its localisation plan, which will start operations from second half of next year. Following on the success of Lotte Choco Pie, the firm will introduce localized versions of Lotte Pepero appropriate to each country’s eating habits and climate.
Lotte Wellfood entered the Indian market in 2004 through the acquisition of Parrys, an Indian confectionery company, renaming it Lotte India. In December 2017, Lotte acquired Havmor Ice Cream, one of the most beloved ice cream brands in India. Last fiscal year, Lotte India recorded a double-digit growth. The consolidated entity of Lotte India targets achieving a virtuous financial structure to secure 1 Trillion KRW annual sales with aggressive investment in future growth.
