[Edaily Reporter SIN SOO-JUNG ] Lotte is establishing a joint venture in Singapore to centrally manage the overseas operations of its food subsidiaries in South Korea and Japan. The plan is to consolidate the production, sales, and logistics capabilities of the food companies in both countries in response to slowing growth in domestic markets and to accelerate its expansion into Asian markets.

LOTTE WELLFOOD(280360)Lotte WellFood and Lotte Confectionery of Japan announced on the 30th that they will launch a joint venture in Singapore in early July. Both companies have completed board approvals and antitrust reviews in the relevant countries.

The joint venture will oversee the Asian operations of Lotte food companies in both South Korea and Japan. It will integrate the management and decision-making systems, which had previously been divided by business unit, and serve as a hub to link the production, sales, and logistics infrastructure of both companies.

Shin Yu-yeol, Head of the Future Growth Division at Lotte Corporation, will serve as chairman of the joint venture’s board of directors. Mr. Shin is expected to lead the overseas business strategies and synergy creation efforts for the food subsidiaries in both countries.

The establishment of this joint venture can be seen as a result of the “One Lotte” strategy for the food business, which Lotte Chairman Shin Dong-bin has been promoting. Chairman Shin has presided over “One Lotte” food business strategy meetings and has called for expanded collaboration between the food affiliates in both countries.

LOTTE WELLFOOD and Lotte Confectionery Japan have been expanding their collaboration in areas such as raw material procurement, joint marketing, and cross-selling of products. Last year, LOTTE WELLFOOD’s overseas sales reached 1.2047 trillion won, a 14.4% increase from the previous year. Lotte Confectionery Japan also generated approximately 900 billion won in overseas sales, primarily in Vietnam and Indonesia.

The overseas growth of its flagship brand, Pepero, is also continuing. According to Lotte, Pepero’s overseas sales rose 24% last year and increased by 33% in the first quarter of this year.

Through the joint venture, Lotte plans to foster global mega-brands, streamline raw material procurement, logistics, and marketing, conduct joint R&D, and enter new markets.

Lotte is also expanding Korea-Japan collaboration beyond the food sector. Lotte Hotel & Resorts and Japan’s HANILHOLDINGS established Lotte Hotels Japan, a joint venture for the Japanese hotel business, in September of last year. Other examples of Korea-Japan collaboration include Lotte Biologics’ fundraising and Lotte Ventures’ operation of L-Camp Japan.

A Lotte official stated, “With the establishment of this joint venture, we have consolidated the Asian business capabilities of Lotte Food in both Korea and Japan,” adding, “By combining the strengths of both companies, we will jointly cultivate mega brands and pioneer new markets to enhance our global competitiveness.”