Lotte Group Chairman Shin Dong-bin 

(Photo: Lotte Group)

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his year, Lotte Group has suffered the worst crisis since its founding. The prosecution’s launching of an investigation into alleged slush funds in June has put on hold the ongoing restructuring of governance and new investment plans. 

Lotte Group Chairman Shin Dong-bin can continue to manage the business group as the prosecution’s writ to arrest him has been rejected. 

Lotte Group issued an official statement in which the group pledged to do its best to put management activities back on track as soon as possible to minimize damage to stakeholders, including clients and cooperative partners. Now it’s time to get down to business and deal with long-term tasks, including investments, which have been suspended by the prosecution’s probe.

Lotte Group’s ambition is to raise sales to 200 trillion won by 2018 to be a top-10 company in Asia.

The plan calls for redoubling sales, now standing at around 100 trillion won group-wide, through aggressive M&As. The group has managed to make strides through successful M&As. It has succeeded in carrying out 34 mergers and acquisitions since 2007.

Lotte Chemical ramped up its global competitive edge by acquiring Titan Chemical of Malaysia, one of the biggest petrochemical companies in Asia, in 2010. The company has expanded its overseas production centers by taking over such companies as Artenius UK and Pakistan PTA of Pakistan. 

Lotte Confectionary is also expanding its global presence as the company acquired a Vietnamese confectionery company in 2007. The company set up a platform to enter the European market by acquiring Belgian chocolate maker Guylian in 2008. 

The company took over Kazakh confectionery company Rahat in 2013 to enter the Central Asian market in earnest. 

The group plans to restart a plan to list Lotte Hotel on the Korea Exchange and come up with steps to innovate management. It is also concentrating on the completion of Lotte World, now under construction, and a bid to acquire a license to set up a duty-free shop in the Lotte World.

Lotte Chmn. Shin Strives to Ensure Job Security of Seongju CC Staff

Lotte Group Chairman Shin Dong-bin ordered his staff to ensure the job security of Seongju Country Club employees, which has been designated as the site of the installment of the Terminal High Altitude Area Defense (THAAD) system designed to counter North Korea’ ballistic missiles. 

The order has come since the installation of the THAAD system will force the closure of the country club, also known as Lotte Sky Hills, threatening the jobs of 150 employees. 

It was learned that Lotte Group has drawn up a plan to retain the officials of the golf country club by relocating them at the nearby expansion sites of the group’s subsidiaries. 

Chairman Shin issued the order to attach top priority to ensure job security of the employees affected by the installation of the THAAD system, after receiving a recent briefing on the golf country club, the group said on Oct. 9.

As earlier as Sept. 30, the Ministry of National Defense MND) announced the Seongju Golf Country Club as the site of the installation of the THAAD system. 

Lotte Group said it was considering it positively, given the rigid situation of national defense security. 

Chairman Shin’s order reflects his keen interest in securing job security of group employees, a group official said. As a duty-free shop at the Lotte World Tower folded after it failed to renew its business license last November, Chairman Shin ordered his staff to take steps to retain the employment of about 3,000 workers there, including employees of its cooperative companies. 

Chairman Shin’s philosophy on job security has been clear through the course of M&As Lotte Group has carried out. 

Last October, Lotte Group took over three chemical units of Samsung Group for 3 trillion won. As affected Samsung officials raised job insecurity issues, Chairman Shin promised them job security, saying that there would be no irrational restructuring and treatment considered unfavorable to employees.

The business group has begun to work out steps to ensure the job security of the Seongju Golf Country Club employees at the behest of Chairman Shin. 

Among the possible ways of rehiring the golf club employees under consideration are an expansion of the Lotte Ham plant in Gimcheon, Gyeongsangbuk-do. The golf country club is within the jurisdiction of Seongju, but it is located near Gimcheon. 

Considering the fact that most of the country club employees live in a dormitory or in nearby places, they cannot move to distant places easily, so it is more desirable to create new jobs in the Gimcheon area, a group official said. Lotte Ham’s plant in Gimcheon now employs about 400 people and produces ham products worth about 200 billion won annually. 

Lotte plans to rehire displaced golf country club employees after expanding the plant on the idle site. 

Lotte Group is bracing for the possibility of the MND and U.S. military authorities’ request for using part of the golf country club for physical training of their military personnel. For instance, Lotte said it will strive to continue the employment of part of the golf club staff in case the course’s nine holes are reopened.