Willing to Sell Underperforming Businesses
비지니스코리아 Jung Min-hee (pr@businesskorea.co.kr)
Lotte Group Chairman Shin Dong-bin has expressed his commitment to focusing on nurturing new business ventures while also considering the possibility of selling underperforming businesses. Regarding the management dispute, he stated, “It has been resolved,” adding, “I want to make it clear through an initial public offering.”
In an interview with the Japanese newspaper Yomiuri Shimbun on Jan. 30, Chairman Shin mentioned, “In the past, we utilized the capital market to fuel growth,” citing examples such as the listing of Honam Petrochemical (Lotte Chemical) and mergers and acquisitions (M&A) in the convenience store and liquor businesses. He explained, “Up until now, we have acquired around 60 companies, both large and small.”
However, Chairman Shin said, “At present, we are changing our strategy to not only focus on acquisitions but also to partially proceed with divestments.” Lotte Group sold Lotteria in Japan last year. In South Korea, it had previously divested itself from TGIF, a family restaurant under Lotte GRS; shares in the Vietnamese pastry company Bibica; and the boiler business division of Lotte Aluminum in 2020.
For the businesses to be fostered in the future, Chairman Shin narrowed it down to four categories: biotechnology, metaverse, hydrogen energy, and secondary battery materials. Chairman Shin said, “One of the significant differences in the business environment between Japan and Korea is the mobility of talent. Even if we say that we will focus on biotechnology in Japan, it is difficult to attract top talent from other companies. However, in Korea, it is possible,” expressing the intent to move away from the traditional Japanese management approach and actively recruit specialized professionals.
Regarding the past management conflicts with former Japan Lotte Holdings Vice Chairman Shin Dong-joo, Chairman Shin stated, “It has been resolved, but I want to make it clear as a public company,” expressing his intention for an IPO. Lotte Group had attempted to improve its group governance structure through the listing of Hotel Lotte in 2015. However, the plan has been indefinitely postponed due to the impact of the deployment of the Terminal High Altitude Area Defense system by the U.S. military in South Korea and the COVID-19 pandemic.
Chairman Shin also addressed the challenges faced in Lotte Group’s business in China. He mentioned, “We had department stores, supermarkets, and beverage and manufacturing factories in China, but we had to withdraw due to the backlash after the deployment of THAAD.” He further stated, “The overseas business is mainly focused on emerging Asian countries, but it needs to be reviewed, considering geopolitical issues with other factors.”