Lotte Wellfood’s headquarters building in Seoul, South Korea (Courtesy of Lotte Wellfood)
South Korean confectionery giant Lotte Wellfood Co. will merge its Indian subsidiaries – Lotte India Co. and Havmor Ice Cream Pvt – to enhance its brand awareness in the South Asian country, where it aims to rake in 1 trillion won ($722.4 million) in annual sales.
The boards of directors of Lotte India and Havmor decided on their merger a day before, Lotte Wellfood said.
According to the plan, Lotte India will absorb Havmor under its wings, and the two companies will seek approval from their shareholders for their marriage in the second half of this year to launch one integrated entity early next year.
Lotte Wellfood has decided to combine the two Indian units to improve their operational efficiency and maximize synergy creation so the merged entity can achieve 1 trillion won in annual sales.
“We have decided to launch one integrated entity in India with long-term goals to enhance Lotte brand awareness and drive growth,” said Yi Chang-yeop, Lotte Wellfood chief executive officer. “We will expand our investment in India.”
Havmor’s ice cream ad (Courtesy of Lotte Wellfood)
In addition to sales growth, Lotte Wellfood is striving to strengthen its brand reputation in India by strategically integrating scattered logistics and production sites and adding new products.
TWO DECADES AFTER LOTTE WELLFOOD’S VENTURE INTO INDIA
In 2004, Lotte Wellfood entered the Indian confectionery market for the first time as a Korean company after acquiring India’s homegrown Parrys Confectionery. Later it changed the Indian company’s name to Lotte India.
The Korean confectionery giant also took over Indian ice cream maker Havmor Ice Cream in 2017.
Lotte India reported 103.4 billion won in sales for 2023 versus 92.9 billion won in 2022, while Havmor earned 165.6 billion won last year, retaining the top position in the ice cream market in Western India.
Lotte India’s Choco Pie-manufacturing factory in Haryana (Courtesy of Lotte India)
Lotte Wellfood has been expanding its investment in the country. It poured about 70 billion won to build an ice cream factory in Pune, Maharashtra, due to start operation in the latter part of this year.
The factory is expected to enable the Korean confectionery products to penetrate Central and South India.
Lotte India invested 33 billion won in its Haryana factory to add a Pepero production line due to be operational in the second half of next year.
Pepero is a thin cookie stick with compound chocolate dipped in the outer layer, and it is one of Lotte’s best-selling snacks in India along with Choco Pie.
To further bolster their sales, the Korean confectionery company has introduced a series of new Pepero and Choco Pie snacks added with India market-tailored special flavors.
Lotte India operates three factories in India, while Havmor runs three other factories in the country.
By Hun-Hyoung Ha
hhh@hankyung.com
Sookyung Seo edited this article.
