Korean Lotte group expands investment in Vietnam

VietNamNet Bridge – Korean retail giant Lotte plans to invest in coffee production in Vietnam and build factories in the country.



Korean Lotte group expands investment in Vietnam




After the handshake between Vietjet and the fast food chain Lotteria in March, the red logo and the slogan "I'm happy" of Lotteria have appeared on Vietjet aircraft. From now on, Vietjet passengers can order Lotteria dishes on flights, while Vietjet advertises on Lotteria.

This was just the first move of Lotte Group’s determination to expand in Vietnam. Also in March, Lotte was involved in a $250 million coffee planting project in Dak Lak Province.

The Korean giant wants to participate in cultivation and processing of coffee products. Lotte wants to be granted 4,000-5,000 hectares of land to build factories and grow coffee according to their standards.

Lotte representatives said this project was within their plan to produce finished coffee products of high added value, for example canned coffee.

With its chain of Lotteria fast food restaurants and an extensive retail network, it is easy for Lotte to launch canned coffee in Vietnam and other countries. Meanwhile, Vietnam is the second largest country in the world for coffee production and Korea is a big market for Vietnam's coffee. Lotte is holding many advantages in this project.

However, the land that Lotte needs is quite large. Dinh Van Khiet, Dak Lak’s deputy chairman, said the two sides were discussing to find the most suitable plan for the project.

The production and export of coffee in Dak Lak in the past few years have been falling so the province is trying to call for investment to improve the quality and increase exports of coffee.

"If this project is successful, Dak Lak will definitely get a new push to promote development," Khiet said.

This is not the first time Lotte has invested in the agricultural sector in Vietnam. In early 2014, when the Ca Mau Seafood Processing and Import-Export JSC (Camimex) faced difficulty, Lotte became a partner to support this business. The Korean group provided additional capital and technological support, and helped boost Camimex’s shrimp exports to South Korea.

This is a step in favor of Lotte because South Korea is the 3rd largest shrimp import market of Vietnam. Camimex is the largest shrimp raising and processing firm in Ca Mau and among the top biggest shrimp exporters of Vietnam.

In 1998, Lotte’s Lotteria fast food brand set foot in Vietnam. Lotte then caught public attention with its merger and acquisition affair with BIBICA confectionery manufacturer. The Korea group is also known in Vietnam with Lotte Mart, Lotte Cinema, and Lotte Home Shopping.

In the real estate business, Lotte is famous for Lotte Legend Hotel, Lotte Center Hanoi building and the Eco Smart City in Thu Thiem, Ho Chi Minh City.

Most noteworthy is its operations in the retail sector. Lotte Mart is expanding very quickly. Lotte Mart opened 10 supermarkets in Vietnam in 2008 – 2014 but since late 2014, five more supermarkets have been inaugurated.

This year Lotte Mart will open supermarkets in Can Tho, Nha Trang and Ho Chi Minh City to complete the target of having 60 supermarkets in Vietnam by 2020.

Lotte not only wanted to conquer the ordinary retail market but also the high-end segment, through the inauguration of the Center Hanoi shopping center and purchasing of shares in the Pico Plaza and Diamond Plaza buildings in Ho Chi Minh City.

Middle-class customers are also targeted by Lotte in the field of real estate. Recently, the group announced that it would build the Eco Smart City complex with a total capital of about $2 billion. The project covers an area of approximately 10 hectares, consisting of a trade center, a hotel, houses, offices and modern apartments.

Lotte is also investing in five-star hotels in Vietnam, starting with the acquisition of Legend Hotel in Ho Chi Minh City.

Meanwhile, Lotte Cinema believes that the Vietnamese market is relatively "fertile" and is trying to expand its cinema system in Vietnam. Park Sung Hoon, Lotte Cinema CEO, said the brand also has ambitions to "become a trademark of the Vietnamese people".

Lotte Cinema has been in Vietnam since 2008. The number of theaters of this brand has risen to 7 with 33 projection rooms.

According to Park, Lotte Cinema will open a total of 70 cinemas in the next five years following the expansion of Lotte shopping centers.

Son Nam

Korean Lotte group expands investment in Vietnam
 
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