"Overcoming Management Uncertainty with AI"... Lotte Holds 2nd Half VCM Today

Lotte Holdings CEO and Over 80 Attendees
Emphasis on Enhancing Competitiveness through AI
Showcase of 16 Startups Also Held

On the afternoon of the 19th, Lotte Group will hold the second half of the year 'VCM (Value Creation Meeting, formerly the Presidents' Meeting)' to discuss the group's management policies and mid- to long-term strategies. Chairman Shin Dong-bin plans to review strategies to overcome uncertainties in the management environment caused by the global complex crisis and to check the performance of each affiliate.

Lotte announced that it will hold the '2024 Second Half Lotte VCM' at Lotte Hotel World in Jamsil, Seoul, presided over by Chairman Shin. More than 80 people, including the CEO and heads of departments of Lotte Holdings, general representatives of business groups, and representatives of affiliates, will attend the VCM starting at 1 p.m. that day.

Shin Dong-bin, Chairman of Lotte.
[Photo by Lotte Holdings]

At the VCM, Chairman Shin is expected to deliver a message on the group’s management policies and the role of top executives, emphasizing ways to enhance competitiveness such as the utilization of AI and intellectual property (IP). In his New Year's address this year, Chairman Shin called for business innovation to embrace the era of 'AI Transformation.' In an April meeting related to content, he also urged strengthening the content business through collaboration with IP companies.

AI transformation is both a card for Lotte to enhance the competitiveness of its existing businesses and one of the industries designated as future growth engines. To this end, Lotte established and has been operating an AI task force under the ESG Management Innovation Office of Lotte Holdings since September last year. Each affiliate is also focusing on researching ways to utilize AI. The meeting will also review the management performance of the first half of this year and share management policies for the second half to achieve goals. Lotte Innovate, which is responsible for the group’s overall AI-based technology, will share strategies to strengthen execution capabilities using AI. Earlier, at the first half VCM this year, Chairman Shin presented 'strong execution capability' as a keyword to lead the global market.

Before the VCM, Lotte will hold a startup event called the '2024 Lotte Investment Showcase.' This event allows Lotte executives to directly experience the technologies of promising startups and explore new business or investment opportunities with them. Sixteen promising startups from various fields such as AI-based content creation, Internet of Things (IoT)-based micro stores, autonomous robots, and bio will participate. At the VCM, an external lecture on the theme of 'Startup Crisis Overcoming and Rebound Cases' is also prepared.

Representatives of each business group in food, distribution, and chemicals will present 'strategies to strengthen execution capabilities to regain leading positions.' In particular, the distribution group is expected to focus on management efficiency and provide a mid-term report on ongoing restructuring. Lotte’s distribution affiliates have been pursuing store closures and workforce reallocation. Last month, Lotte On accepted voluntary retirement applications from employees with more than three years of service, and Lotte Duty Free entered an emergency management system involving a 20% salary cut for all executives and company-wide workforce restructuring.

Discussions on new growth business groups such as bio are also expected. Along with AI, Lotte is accelerating the shift to core businesses in the 'four new growth areas' of bio, metaverse, hydrogen energy, and secondary batteries. Lotte Biologics, a bio affiliate, held a groundbreaking ceremony for the Songdo Bio Campus Plant 1 in Songdo International City, Incheon, on the 3rd. Lotte Chemical recently revealed a blueprint to achieve 4 trillion KRW in sales by 2030 by expanding its portfolio through securing overseas clean hydrogen and ammonia in the hydrogen energy sector.

Shin Yoo-yeol, Executive Director of Lotte Holdings’ Future Growth Office, who has been expanding management efforts centered on the group’s new growth engines such as bio and healthcare, is reportedly not expected to make a separate statement at the meeting. Shin, Chairman Shin’s eldest son, has been attending the VCM since the first half of this year in his capacity as head of the Future Growth Office.