New Delhi: South Korean confectionery giant, Lotte Wellfood, has announced a strategic merger of its Indian subsidiaries, Lotte India and Havmor Ice Cream. This move is a cornerstone of its ambitious ‘One India’ initiative, aimed at bolstering Lotte’s brand prominence and accelerating growth within the lucrative Indian confectionery and ice cream market.
The combined entity is targeting an impressive annual revenue of 1 Trillion KRW (approximately INR 6000 crore) through strategic investments and innovative growth strategies.
As a first step under the ‘One India’ plan, Lotte Wellfood has committed to investing INR 400 crore in a new ice cream production facility for Havmor in Pune, Maharashtra. This expansion is set to significantly expand the company’s geographical reach, extending its footprint from western India to the south-central region.
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Chang-Yeop Lee, CEO of Lotte Wellfood, expressed enthusiasm about the merger, stating, “India is a key market for Lotte, given its massive population and robust economic growth. By merging our Indian operations, we aim to enhance efficiency, maximize synergies, and strengthen the Lotte brand through a diversified product portfolio.”
The merger, approved by the boards of both Lotte India and Havmor on July 29th, will see Havmor integrate with Lotte India while retaining its distinct brand identity. The integration process is expected to conclude by the end of 2023, with the newly formed entity launching its operations in early 2024.
Lotte India has already invested over INR 210 crore to establish its first overseas production base for Lotte Pepero in Haryana, scheduled to commence operations in the latter half of next year. The company plans to introduce localized versions of Lotte Pepero to cater to Indian tastes and preferences.
Lotte’s journey in India began in 2004 with the acquisition of Parrys, subsequently renamed Lotte India. The acquisition of Havmor Ice Cream in 2017 further solidified the company’s position in the market. Lotte India has reported double-digit growth in the past year, while Havmor is a market leader in the western Indian ice cream segment.
The merged entity aims to achieve a robust financial structure and aggressive growth, underpinned by strategic investments. This strategic move is expected to significantly enhance Lotte’s market share in both the confectionery and ice cream sectors, positioning the company as a formidable force in the Indian consumer goods landscape.
