Mumbai: Lotte Wellfood, a South Korean international confectionery company, today announced the merger of its Indian subsidiaries Lotte India and Havmor Ice Cream to establish an integrated entity in India. The company has announced this move as part of its strategic initiative, One India, that aims to enhance Lotte’s brand presence and secure growth momentum in the Indian confectionery and ice cream market. With this merger, the integrated entity will aim to achieve an annual sales of 1 Trillion KRW (Approximately Rs. 6000 crores) through a series of investments and secure future growth drivers.
As its first investment under the One India initiative, Lotte Wellfood also announced its plans to set up a new ice-cream production facility for Havmor with an investment of Rs. 400 Crores in Pune, Maharashtra. This expansion is expected to extend the company’s regional coverage from the west to the south-central regions of India.
Chang-Yeop Lee, CEO Lotte Wellfood, said, “With the launch of ONE INDIA, we aim to solidify Lotte’s brand presence and secure growth momentum in the Indian market. Our long-term vision includes substantial investments in India, a key emerging market with the world’s largest population and robust economic growth. The merger of our Indian subsidiaries is a strategic move to enhance management efficiency and maximize synergy. Beyond strategic growth, our focus is on strengthening the local Lotte brand through diversified product portfolios and the integration of logistics and production bases. The merger will play a crucial role in achieving greater market share and increasing sales. This union will enable us to offer a more comprehensive range of products to our consumers, meeting their diverse preferences and needs.”
On 29 July, the board of directors of Lotte India and Havmor each approved the merger plan. The merger will take the form of Havmor Ice Cream integrating with Lotte India and both the brands will continue to retain the individual identities for seamless operations. The merger process is expected to be completed by second half of this year, with the new integrated entity set to launch early next year. Also, in line with the localisation strategy, Lotte India had earlier invested over Rs. 210 crores to establish the first overseas production base for Lotte Pepero at its Haryana factory, aiming to start operations in the second half of next year. Following Lotte Choco Pie, the company plans to develop and introduce localised versions of Lotte Pepero that it said reflects local eating habits and climate conditions.
Lotte Wellfood entered the Indian market in 2004 by acquiring Parrys, an Indian confectionery company, and renaming it Lotte India. In December 2017, Lotte acquired Havmor Ice Cream, an ice cream brand. Lotte India recorded double digit growth last year. Havmor said that it holds the top market share in the ice cream sector in western India. The unified Lotte India entity aims to secure a virtuous financial structure.
