Lotte looks to future with new identity and new leaders

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Lotte looks to future with new identity and new leaders

Lotte Chairman Shin Dong-bin escorts LVMH Chairman Bernard Arnault at Lotte Department Store's Jamsil branch in southern Seoul on Monday. [NEWS1]

Lotte Chairman Shin Dong-bin escorts LVMH Chairman Bernard Arnault at Lotte Department Store's Jamsil branch in southern Seoul on Monday. [NEWS1]

 
Lotte is reestablishing its brand identity and is unprecedentedly hiring a CEO from outside the group, while simultaneously pushing the group chairman's son into the business. 

 
Lotte Confectionery, which was named by late founder Shin Kyuk-ho in 1967, will be renamed Lotte Wellfood from April. 
 
The board voted on the agenda at a general shareholder meeting held at Lotte headquarters in western Seoul on Thursday.
 
The decision comes “as our determination to expand our brand as a global food company, breaking away from the previous brand image as a company limited to confectionery business,” the company said.
 
After merging with Lotte Food last July, the company grew into a food manufacturer with annual revenue of 4 trillion won ($3.1 billion) last year.
 
The company aims to expand its business to convenience foods, processed-meat products, dairy products as well as vegan and health products. It also set a goal to ultimately expand the proportion of global business to 50 percent from the current 20. The food company announced in January that it will invest 70 billion won over the next five years in Havmor Ice Cream, its Indian ice cream subsidiary, to build a massive ice cream plant in Maharashtra in western India.
 
A new wind of change blew when Lotte Confectionery appointed former Coca-Cola Korea’s CEO Lee Chang-yeop as its new CEO last December. It’s the first time the company recruited an outside leader as CEO.
 
At Lotte Chilsung Beverage, Lotte Group Chairman Shin Dong-bin was reappointed as an internal director and CEO of the company at the general shareholder meeting Wednesday.
 
Shin was appointed as an internal director in 2017 but withdrew from the position in 2019 after receiving a suspended jail sentence of 30 months for bribery.
 
Shin’s return to the board for Lotte Chilsung Beverage signals a move for “speedy decisions on global investment, mergers and acquirement and business expansion,” according to the beverage company.
 
Lotte Chilsung’s annual sales and operating profit each jumped 13.4 percent and 22.3 percent on year to 2.8 trillion won and 222.8 billion won last year.
 
Lotte Shopping also signed a deal with British online retail company Ocado last November to invest 950 billion won to build fulfillment centers for grocery deliveries.
 
Shin is also pushing to have his eldest son Shin Yoo-yeol, vice president of Lotte Chemical, participate in company events. When LVMH Chairman Bernard Arnault visited Korea this week, Shin Dong-bin and Shin Yoo-yeol were both there to greet him at Lotte Department Store’s Jamsil branch in southern Seoul.
 
Sources say Lotte’s shift to change is an attempt to find a way to grow its business amid global economic slowdown. Lotte Engineering & Construction (E&C) suffered a liquidity crunch in November stemming from the Legoland-related default, while the need to grow a competitive edge in the retail business grows amid contestants such as Shinsegae and e-commerce operator Coupang.
 
“The contemporary era is one of permanent crisis,” Shin said at a biannual value creation meeting in January. “There is no tomorrow if we do not pursue new challenges. We need to raise our company value by becoming a company with global competitiveness.”
 

BY BAEK IL-HYUN [lee.jaelim@joongang.co.kr]
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