Lotte Wellfood to Appoint Kim Dosik as Outside Director at Regular Shareholders' Meeting on the 25th
Former Head of External Cooperation at Hyundai Motor India
Accelerating Full-Scale Push into Indian Market This Year
Lotte Wellfood is accelerating its push into the Indian market. India is a strategic country that Shin Dong-bin, Chairman of Lotte Group, is deeply committed to, and Lotte Wellfood appears to be making a full-scale drive in the Indian market by recruiting a former Hyundai Motor executive known as an "India expert" as an outside director.
According to industry sources on the 13th, Lotte Wellfood plans to newly appoint Kim Do-sik, an advisor at Hyundai Motor, as an outside director at the regular general meeting of shareholders scheduled for the 25th of this month. Kim served as head of management support at Kia Motors India for two years from 2018 and then handled external cooperation at Hyundai Motor India for three years starting in 2020. Until last year, he was the Chief Marketing Officer (CMO) of the Planning and Coordination Office at Hyundai Motor.
Kim's experience in India is cited as the reason he received a love call from Lotte Wellfood. A Lotte Wellfood official explained, "We expect to receive various consultations related to India when discussing management issues at the board of directors."
Lotte Wellfood has bet its life on expanding in the Indian market this year. The company announced a value-up plan to increase the global sales ratio to 35% by 2028, thereby enhancing corporate value, with the performance in the Indian market being a key part of this plan.
India is a region where Lotte Wellfood has invested effort for about 20 years. In 2004, Lotte Wellfood entered the Indian market as the first domestic food company by acquiring Paris (Lotte India), an Indian confectionery company. Later, in 2017, it expanded its business by additionally acquiring the local ice cream company Havmor. As a result, sales grew more than threefold from 18 billion KRW in 2004 to 58.2 billion KRW in about 10 years. Last year, sales reached 290.5 billion KRW, growing fivefold. Last year, Lotte Wellfood’s Indian subsidiary accounted for about 34% of global sales, making it the largest share.
This year, Lotte Wellfood plans to solidify its position as a comprehensive confectionery company by launching an integrated corporation along with the operation of a new factory, in which it invested 70 billion KRW. The company set a higher target growth rate of 15% through expanded production facilities and management efficiency from the integrated corporation establishment. The sales target for this year is 338.3 billion KRW, with a goal of achieving annual sales of 1 trillion KRW by 2030.
To this end, Lotte Wellfood officially started operating the new Havmor factory in Pune, India, last month. The strategy is to increase market dominance in western India while using it as a foothold for entry into southern India. Production volume has also increased. Hyun-jung Son, a researcher at Yuanta Securities, analyzed, "With the operation of the Pune new factory, ice cream production capacity has expanded 2.5 times compared to before."
In the second half of the year, the first overseas production facility for Pepero will also be established in India. Pepero is being nurtured by the company as a global 1 trillion KRW mega brand, and Lotte Wellfood plans to invest 33 billion KRW in India to produce original Pepero and Crunch Pepero. Researcher Son analyzed, "Starting in July, Lotte Wellfood plans to add a new Pepero production line at its factory in Haryana, India, and begin full-scale sales growth."
The "One India" strategy, which integrates the confectionery corporation Lotte India and the ice cream corporation Havmor into one, is also gaining momentum. The plan is to increase production and logistics efficiency through the integrated corporation. The One India integrated corporation aims to achieve annual sales of 1 trillion KRW. There is also growing anticipation that the integrated corporation will be listed locally in India.
Lotte Wellfood’s focus on the Indian market is due to its growth potential. India is considered a high-potential market for food categories including ice cream and snacks because of its hot climate and large young population. Last year, India surpassed China to become the most populous country in the world. Statistics Korea forecasts India’s population to reach 1.68 billion by 2050, maintaining its position as the world’s number one in population.
The fact that India is a "young country" with a large youth population is another reason why its consumption potential is highly valued. Last year, Korea’s population under 14 years old was 10.6%, and the elderly population accounted for 19.2%. However, in India, the youth population is 24.6%, and the elderly population is 7.1%.
Chairman Shin Dong-bin’s affection for India is also exceptional. India was the country Shin entered during the early 2000s when he was designated as the successor to Honorary Chairman Shin Kyuk-ho and began overseas business expansion. It is considered one of Shin’s core businesses. At that time, entering the Indian market was the first among domestic food companies. Last month, Shin personally attended the completion ceremony of the Pune new factory with his eldest son, Vice President Shin Yu-yeol, showing his support. In his congratulatory speech at the ceremony, Shin said, "The completion of this new factory will be an important milestone for Lotte’s global food business," and added, "We will produce the highest quality products and make Havmor the most beloved brand in India."
An industry insider said, "In the Indian market, Choco Pie is so firmly established that it is associated with Lotte Wellfood rather than Orion," and added, "There is sufficient growth potential in India’s confectionery and ice cream markets, so additional investment moves to strengthen market dominance may continue."
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