Lotte India, Havmor to merge to raise $722.4 mn in sales

South Korean confectionery giant Lotte Wellfood Co. will merge its Indian subsidiaries — Lotte India Co. and Havmor Ice Cream Pvt — to boost its brand awareness in the South Asian country, where it aims to rake in 1 trillion won ($722.4 million) in annual sales.  

The boards of directors of Lotte India and Havmor decided on their merger the day earlier, Lotte Wellfood said on Tuesday. 

According to the plan, Lotte India will absorb Havmor and the two companies will seek approval for their merger from their shareholders in the second half of 2024 to launch one integrated entity early next year.

Lotte Wellfood has decided to combine the two Indian units to improve their operational efficiency and optimize synergy so that the merged entity can achieve 1 trillion won in annual sales.

“We have decided to launch one integrated entity in India alongside the long-term goals to enhance Lotte brand awareness and drive growth,” said Yi Chang-yeop, CEO of Lotte Wellfood, adding that “We will expand our investment in India.”

In addition to sales growth, Lotte Wellfood aims to boost its brand reputation in India by integrating its scattered logistics and production sites and adding new products.

TWO DECADES SINCE LOTTE WELLFOOD’S VENTURE INTO INDIA

Lotte Wellfood entered the Indian confectionery market in 2004, a first for a Korean company, after acquiring India’s homegrown Parrys Confectionery. It later changed the Indian company’s name to Lotte India.

The Korean confectionery giant also took over Indian ice cream maker Havmor in 2017.

Lotte India reported 103.4 billion won in sales in 2023 versus 92.9 billion won in 2022. Havmor earned 165.6 billion won last year, retaining the top spot in the ice cream market in western India.

Lotte Wellfood has been expanding its investment in the country. It has poured 70 billion won into building an ice cream factory in Pune, Maharashtra state, which is due to begin production later this year.

The new factory is expected to enable Korean confectionery products to penetrate the central and southern regions of India.

Lotte India invested 33 billion won in its Haryana factory to add a Pepero production line due to launch operation in the second half of 2025.

The Pepero is a thin cookie stick enveloped in a chocolate outer layer. It is one of Lotte’s best-selling snacks in India along with Choco Pie.

To further bolster sales, the Korean confectionery company has introduced a series of new Pepero and Choco Pie snacks in flavors tailored to the Indian market.

Lotte India and Havmor each currently operate three factories in India.

Write to Hun-Hyoung Ha at hhh@hankyung.com
Sookyung Seo edited this article.