Lotte Confectionery seeks 5% of its global revenues from India

After making India its global hub for Lotte Choco Pie, South Korean company Lotte Confectionery Co Ltd said it would hope India to contribute 5% to its global revenues from current 2% by the end of this decade following acquisition of Havmor Ice Cream Ltd. and introduction of India-specific products for the mass market.

“Choco Pie was built in India. Lotte invested in brand promotion and building an equity for itself over 10 years, grabbing 95% market share. However, this was not enough for us,” said president of Lotte Confectionery Co Ltd Yong su Kim.

“We invested $200 mn in India on Lotte Choco Pie. With Havmor, we expect to expand our India footprint with a new product. We see a huge consumer base in India’s 1.3 bn people and hope to see India contribute 5% to our global revenues by 2020,” Kim said.

“Since we offer 100% pure ice creams in other markets, we zeroed in on Havmor,” he said. The deal values HIL at more than 2.5 times its 2016-17 turnover of Rs 400 crore and enables Lotte to have an operational capacity of 3 lakh litres of ice cream in India. Lotte is exploring the possibility to export Havmor to South East Asia, Africa and Middle Eastern markets.

“While a new plant could be in the offing after two years, Lotte would take the Havmor outlet numbers to 500 from current 200 by 2021,” said Ankit Chona, the third-generation entrepreneur who handed over Havmor’s reins to the MNC.

HIL would eventually be renamed, he indicated adding that Lotte would eventually introduce its sorbets from South Korean and Japanese markets to the Indian consumer, he said adding by 2025 the company should have 15-20% marketshare in the organised ice cream market currently pegged at Rs 5000 cr. Havmor has 10% market share currently.