“Being riveted to short-term business performances like sales and operating profit could lead to a greater crisis,” Lotte Group Chairman Shin Dong-bin said while presiding over the Value Creation Meeting (VCM) for the second half of the year.
The event, which included CEOs, was held in Busan on July 14. Chairman Shin repeatedly stressed the need for change.
For Lotte Group, which had pinned its hopes that the COVID pandemic would become endemic, things have not exactly turned out as planned.
The reason is that the group is now grappling with “three ‘high’ crises” — high interest rate, high prices and high foreign currency rates.
Lotte Chairman Shin pondered how to overcome multiple crises, as worries about global stagflation mounted during the VCM.
Among about 80 people on hand at the meeting were Lotte Corp. CEO-Vice Chairman Song Yong-dok, Lotte Corp. CEO-Vice Chairmen Lee Dong-woo, heads of four business headquarters, and each subsidiary CEO.
Chairman Shin Taking Stock of Future Growth Engines
Chairman Shin suggested capitalization as the most objective index for measuring corporate values.
“You have to ponder how the financial market evaluates, and what things you have to do to attain growth and profit you want,” Chairman Shin told the CEOs. Shin told them to “do the right thing, at the right time.”
His remarks may be construed as Chairman Shin pulling on the reins of the group, which saw the “lost five years,” in comparison to its competitors’ aggressive investments.
Chairman Shin took stock of preparations for nurturing the group’s future growth engines, including bio and mobility. The bio sector is one of the businesses the group is devoting itself to nurturing.
Chairman Shin believes that for Korea, having already entered a super aging society, bio and health care have emerged as the most promising industries.
In May, Lotte came up with a massive plan to invest 37 trillion won over the next five years. More than 40 percent of the total is slated for investing in new businesses.
During the meeting, each of the four business headquarters revealed its mid- and long-term strategies for the first time.
The Food Business Headquarters aims to nurture mega brands to secure global competitiveness and upgrade value chains.
The Distribution Business Headquarters decided to purse innovation in overall business areas ranging from corporate culture to business and portfolio under the new vision “Customers’ 1st Shopping Destination.”
The Chemical Business Headquarters revealed its willingness to implement new businesses such as hydrogen energy, battery materials, recycling and bio plastic.
The Hotel Business Headquarters, which suffered a setback due to the COVID pandemic, came up with restructuring of business portfolio and reorganization to reinvent fundamentals.
Lotte discussed ways of providing support to attract the 2030 Expo to Busan. It was the first time Chairman Shin presided over the VCM in Busan.
Lotte formed a task force team to back the attracting of 2030 World Expo to Busan, headed jointly by Lotte Corp.
Vice Chairman Song and Lee. Lotte will join forces in attracting the World Expo by making the most of its business infrastructure and networks in Korea and abroad with the task force team playing a leading role.
Chairman Shin met with Busan Mayor Park Hyeong-joon at Busan City Hall prior to the VCM.
The two talked about the matter related to the construction of Busan Lotte Tower.
Chairman Shin was quoted as saying that Lotte Tower would be built by 2025 as planned and a project to reconstruct the Sajik Baseball Stadium would be implemented without interruption.
Industry analysts said attention was focused on Chairman Shin, which resumed his outside business activities in earnest, ending a long-time hiatus.