BUSSINESS
LOTTE DUTY
Regardless of the worsening economic situation
in and out of the country in 2012, the Lotte Group realized consistent growth
in each business sector. Specifically, the overseas business grew enough to
earn 10 trillion won of profit based on the secured new markets and joint
promotion with affiliates. Although the emergency management system was
instituted at the first half of the previous year as a way to preemptively cope
with the unstable economic situation, an investment to secure the new growth
engine was actively promoted. As a consequence, it was possible to reach the
‘Hi-mart.’
Recovery of the world economy is under a cloud
of pessimism; however, Lotte plans to exert efforts to break through the
low-growth era based on a prepared management against all potential crises in
2013 while searching for new opportunities for growth. Also, strengthening the
core competence as well as the investment for the discovery of the new growth
engine will continue by thoroughly observing the changing economic condition in
and out of the country. Moreover, Lotte plans to go a step closer toward the
realization of the vision of ‘2018 Asia Top 10' by consistently reinforcing the
overseas business and promoting the value of Lotte as a global brand.
Plans for the distribution of the Lotte Group
in 2013 include the consistent expansion of the overseas market based on each
business type while reinforcing the new growth engine. Following the second
branch in Tianjin, China in 2012, Lotte Department Store will open branches in
Weihai and Chengdu in April and August, 2013, respectively, to institute the
multi-branch system in China. In May, the Lotte Department Store in Jakarta,
Indonesia will be opened to target the markets in East Asian countries. As a
new growth engine in Korea, Lotte focuses on outlet businesses. First of all,
the ‘Lotte Outlet Seoul Station branch’, the first urban outlet in Seoul, will
open in January and premium outlets in Buyeo and Icheon will be opened in
August and October, respectively. The Premium Outlet in Gimhae will be opened
in June next year as the largest in Korea.
Plans for the Lotte Mart include the
domination in the local market to be reinforced by actively targeting the
overseas markets in 2013. As of today, more Lotte Mart branches are being
operated in overseas countries, such as in China, Vietnam, and Indonesia than
in Korea. In 2013, about 20 more stores are planned to be opened in the
afore-mentioned three countries. Also, businesses, like the ‘Digital Park’, a
store exclusive for home appliances and the killer category, ‘Toys-R-Us’ will
be taken as new growth engines to be consistently expanded in the future. Plans
for the Lotte Hi-mart, a new member of the Lotte Group include the continuous
opening of new stores while seeking a measure to create a synergy effect based
on the mutual assistance of the affiliates in 2013. Presently, more than 320
Lotte Hi-mart stores are being operated throughout the country and more than 10
stores are planned to be opened this year. In addition, the measure for the
overseas promotion of Lotte Hi-mart is being considered to focus on East Asian
countries where many Lotte affiliates are being promoted, such as in Indonesia
and Vietnam.
In anticipation of welcoming 10 million
foreign tourists, the Lotte Group is taking the initiative to join the tourism
business. Lotte Hotel plans the opening of business hotels in Jeju, Daejeon,
Guro, and Ulsan by 2014. In Hanoi, Vietnam and Shenyang, China where
multipurpose complexes of Lotte Group are being constructed, five-star hotels
will be opened in 2014 and 2017. Lotte Hotel plans to grow as one of the top
three global hotels in Asia by 2018 by accelerating the overseas promotion in
the Asian market, specifically, in Cebu. The Lotte Duty Free Shops launched in
Singapore and Indonesia last year are expected to steadily dominate the
overseas market in 2013 by opening a downtown duty free store in Jakarta, a
first in the business.
Lotte Confectionery is exerting efforts to
realize the vision, ‘Number 1 confectionery business in Asia by 2018’. It will
concentrate on the security of medium- to long-term growth engine while
reinforcing the value of the Lotte brand in the domestic and overseas market in
2013. Meanwhile, plans for the businesses in China, India, Vietnam, and Russia,
include stabilizing the sales organization and reinforcing market domination
through consistent upgrade of the current production line. Also, the markets in
East Asian countries possess high growth possibility, thus, the existing
businesses will be reinforced focusing on Singapore, while searching for new
opportunities. Lotte Chilsung Beverage plans to enhance the value of the brand
to existing beverage products like soda and juice while exerting efforts to
reinforce the competitiveness in the spring water, sport and energy drinks, and
instant coffee markets that show consistent growth. It is also considering
plans to open an overseas branch in consideration of the market promotion in
overseas countries. In the alcoholic beverage market, the brand value of
‘Cheo-eum-cheo-reom’ will be continuously reinforced while focusing on the
expansion of the market share for Cheongju (Clear rice wine)/wine/imported
beer. Lotte Chilsung Beverage plans to strengthen its status as a comprehensive
beverage and alcoholic beverage company through consistent product development
and search for an opportunity toward a new market.
In 2013, the Lotte Group started a
petrochemical business, with the name, ‘Lotte Chemical Corporation.’ It was
launched last year with the merger of Honam Petrochemical Corporation and KP
Chemical. This move is expected to reinforce the competitiveness in the global
market through a large-scale economic potential and derive synergy for the
discovery of a new growth engine. Lotte Chemical Corporation completed
construction of an additional naphtha cracking center (NCC) in Yeosu last year.
As a consequence, it secured the no. 1 rank in the domestic ethylene production.
Currently, it is promoting a joint-venture business for polypropylene catalyst
in the Yeosu factory and the PET/PP adhesive polymer business in the Ulsan
factory. In 2013, Lotte Chemical Corporation plans to exert efforts for the
realization of the vision as the largest chemical company in Asia by 2018 with
40 trillion won of sales by reinforcing the overseas and mega-trend businesses
while continuing facility expansion without problems.
Lotte Engineering & Construction plans to
reinforce the competence for high value-added business and actively promote
business expansion in overseas countries to realize continuous growth in 2013.
The investment on a plant business is considered to be the new growth engine of
the business and will be continuously expanded while taking the initiatives to
develop new markets by actively promoting the private power generation business
in Africa. Also, the construction of Lotte World Tower that aims to be
completed by 2015 will be pursued as planned and based on the technology for
high-tech high-rise construction through this construction project, it will
exert utmost efforts to take the pioneering role in the high-rise construction
market in and out of the country.
Lotte pays attention to mega-scale projects that are promoted in
and out of the country as another growth engine for the future. Such mega-scale
projects are considered to be the area that can create synergy effect that
gathers the capability of Lotte, accumulated in the fields of food,
distribution, construction, and service. Also, it reinforces the brand image of
Lotte in the local markets through overseas promotion and joint projects with
other affiliates.
The ‘Lotte World Tower’ started actual
construction with basic concrete work. This project has a total of 3.5 trillion
won investment and is composed of high-rise buildings including department
stores, shopping malls, hotels, and offices. Upon the completion of the Lotte
World Tower in 2015, it is expected to contribute to the expansion of the
tourism industry as a landmark of Seoul and revitalization of the local
economy.
Also, the ‘Vietnam Hanoi Lotte Center’ is
being constructed in Hanoi, Vietnam. It is expected to open in 2014 as a
large-scale complex composed of a department store, five-star hotel, and
offices, with a total of 400 million dollars investment. A Lotte Group complex
is being constructed in Shenyang, in the northeastern part of China. Including
a theme park, this construction project integrates the know-how of Lotte in the
field of tourism and distribution through a shopping mall, hotel, and
residential complex, aiming at its completion by 2017.
