Lotte Group announced a plan to invest 37 trillion won in the next five years in Korea to reinvigorate the sagging national economy, which was undermined by the spread of the COVID-19 pandemic.
The plan, announced on May 24, calls for investing in not only bio, health care and mobility sectors — designated as new growth engines — it will also invest in eco-friendly projects mindful of sustainability and core businesses such as distribution, chemical and food.
The group plans to concentrate investments in the core businesses to speed up growth momentum, which has been stagnated so far.
Early this year, Lotte Group designated the health and wellness sector and mobility segment as its next-generation growth engines. For instance, Lotte recently acquired U.S. drug firm Bristol Myers Squibb (BMS)'s pharmaceutical factory in Syracuse, New York, for $160 million (200 billion won) to expand a contract development and manufacturing organization (CDMO) business. The group also plans to spend an additional 1 trillion won on building a production plant in Korea.
As for the mobility sector, Lotte plans to make investments focusing on urban air mobility (UAM) and EV charging infrastructure. The group targets verification of flights in the UAM sector this year. Lotte Group plans to build domestic transportation infrastructure connecting land and flight transportation based on offline centers, owned by the group.
The group plans to expand investments into facilities related to EV battery charging. It plans to increase charger production capacity to more than 10,000 units annually. Lotte Rental plans to invest 8 trillion won to introduce 240,000 EVs.
Lotte Chemical plans to pour more than 1.6 trillion won into the hydrogen fuel cell material business. Lotte Chemical plans to establish joint ventures with Korean and foreign strategic investors with the goal of building Korean hydrogen infrastructure.
It targets to expand businesses such as the hydrogen charging station business, electrolyte business and next-generation ESS business.
Lotte will produce 100 tons of eco-friendly recycling products by investing 1 trillion won in recycling and bio plastic business sectors by 2030, in compliance with the trends of virtuous cycling of resources.
The group’s chemical business unit will make facility investments and expand capacity to raise the competitiveness of the value-added specialty business and general use petrochemical business by investing 7.8 trillion won.
Lotte Group also prioritizes the supporting and investing Korean startups. The group plans to expand the size of domestic startup investments to 360 billion won by 2026.
Lotte Ventures is expected to expand investments to cover not only “L-CAMP,” a program to nurture and invest startups but also expertise areas related to public health such as food tech and health care.
The company plans to help Korean startups make their overseas market entry by making the most of the infrastructure and expertise the company has accumulated through global venture capitals such as Vietnam and Japan.
The number of Korean startups nurtured through Lotte Ventures’ L-CAMP, stood at 152, and the combined size of values amounted to 1.6 trillion won, a 3.7-fold jump over the company’s support to L-CAMP.
Lotte Group had suffered multiples of management hardships since 2015. Subsidiaries of Lotte Group withdrew their operations from China in the wake of ramifications of economic sanctions China imposed against Korea in retaliation of the installation of the U.S. Terminal High Altitude Area Defense (THAAD) systems into Korea. Lotte Group is displaying its willingness to overcome so-called “lost five years.”
The group plans to pour 8.1 trillion won into the distribution sector. Lotte plans to prioritize in the development of large-scale, multi-purpose malls in areas such as Sangam-dong, Seoul, and Songdo, Incheon, with higher employment effects. Lotte Department Store plans to carry out renewals of its main and Jamsil outlets.
Lotte Mart plans to expand specialty outlets such Zeta Flex, MAXX and Bottle Bunker, a wine shop, by investing 1 trillion won.
The group plans to invest 2.3 trillion won in hotel and duty-free facilities to resurge the tourism industry, buffeted by the pandemic and attract inbound tourists. The food business units plan to expand portfolios focusing on wine and whiskey.
They plan to spend 2.1 trillion won to develop future foods and new products, such as alternative meat products and health functional foods.
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