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BUSINESS PLAN

Overcoming the era of uncertainty through a prepared management
In search for a bigger growth opportunity through a determined constituent and strengthened brand-
Regardless of the worsening economic situation in and out of the country in 2012, the Lotte Group realized consistent growth in each business sector. Specifically, the overseas business grew enough to earn 10 trillion won of profit based on the secured new markets and joint promotion with affiliates. Although the emergency management system was instituted at the first half of the previous year as a way to preemptively cope with the unstable economic situation, an investment to secure the new growth engine was actively promoted. As a consequence, it was possible to reach the ‘Hi-mart.’
Recovery of the world economy is under a cloud of pessimism; however, Lotte plans to exert efforts to break through the low-growth era based on a prepared management against all potential crises in 2013 while searching for new opportunities for growth. Also, strengthening the core competence as well as the investment for the discovery of the new growth engine will continue by thoroughly observing the changing economic condition in and out of the country. Moreover, Lotte plans to go a step closer toward the realization of the vision of ‘2018 Asia Top 10' by consistently reinforcing the overseas business and promoting the value of Lotte as a global brand.
  • DISTRIBUTION AND TOURISM

    Distribution and tourism

    Plans for the distribution of the Lotte Group in 2013 include the consistent expansion of the overseas market based on each business type while reinforcing the new growth engine.

    Following the second branch in Tianjin, China in 2012, Lotte Department Store will open branches in Weihai and Chengdu in April and August, 2013, respectively, to institute the multi-branch system in China. In May, the Lotte Department Store in Jakarta, Indonesia will be opened to target the markets in East Asian countries. As a new growth engine in Korea, Lotte focuses on outlet businesses. First of all, the ‘Lotte Outlet Seoul Station branch’, the first urban outlet in Seoul, will open in January and premium outlets in Buyeo and Icheon will be opened in August and October, respectively. The Premium Outlet in Gimhae will be opened in June next year as the largest in Korea.

    Plans for the Lotte Mart include the domination in the local market to be reinforced by actively targeting the overseas markets in 2013. As of today, more Lotte Mart branches are being operated in overseas countries, such as in China, Vietnam, and Indonesia than in Korea. In 2013, about 20 more stores are planned to be opened in the afore-mentioned three countries. Also, businesses, like the ‘Digital Park’, a store exclusive for home appliances and the killer category, ‘Toys-R-Us’ will be taken as new growth engines to be consistently expanded in the future.

    Plans for the Lotte Hi-mart, a new member of the Lotte Group include the continuous opening of new stores while seeking a measure to create a synergy effect based on the mutual assistance of the affiliates in 2013. Presently, more than 320 Lotte Hi-mart stores are being operated throughout the country and more than 10 stores are planned to be opened this year. In addition, the measure for the overseas promotion of Lotte Hi-mart is being considered to focus on East Asian countries where many Lotte affiliates are being promoted, such as in Indonesia and Vietnam.

    In anticipation of welcoming 10 million foreign tourists, the Lotte Group is taking the initiative to join the tourism business. Lotte Hotel plans the opening of business hotels in Jeju, Daejeon, Guro, and Ulsan by 2014. In Hanoi, Vietnam and Shenyang, China where multipurpose complexes of Lotte Group are being constructed, five-star hotels will be opened in 2014 and 2017. Lotte Hotel plans to grow as one of the top three global hotels in Asia by 2018 by accelerating the overseas promotion in the Asian market, specifically, in Cebu. The Lotte Duty Free Shops launched in Singapore and Indonesia last year are expected to steadily dominate the overseas market in 2013 by opening a downtown duty free store in Jakarta, a first in the business.

  • FOOD

    Food

    Lotte Confectionery is exerting efforts to realize the vision, ‘Number 1 confectionery business in Asia by 2018’. It will concentrate on the security of medium- to long-term growth engine while reinforcing the value of the Lotte brand in the domestic and overseas market in 2013. Meanwhile, plans for the businesses in China, India, Vietnam, and Russia, include stabilizing the sales organization and reinforcing market domination through consistent upgrade of the current production line. Also, the markets in East Asian countries possess high growth possibility, thus, the existing businesses will be reinforced focusing on Singapore, while searching for new opportunities.

    Lotte Chilsung Beverage plans to enhance the value of the brand to existing beverage products like soda and juice while exerting efforts to reinforce the competitiveness in the spring water, sport and energy drinks, and instant coffee markets that show consistent growth. It is also considering plans to open an overseas branch in consideration of the market promotion in overseas countries. In the alcoholic beverage market, the brand value of ‘Cheo-eum-cheo-reom’ will be continuously reinforced while focusing on the expansion of the market share for Cheongju (Clear rice wine)/wine/imported beer. Lotte Chilsung Beverage plans to strengthen its status as a comprehensive beverage and alcoholic beverage company through consistent product development and search for an opportunity toward a new market.

  • PETROCHEMICALS AND CONSTRUCTION

    Petrochemicals and construction

    In 2013, the Lotte Group started a petrochemical business, with the name, ‘Lotte Chemical Corporation.’ It was launched last year with the merger of Honam Petrochemical Corporation and KP Chemical. This move is expected to reinforce the competitiveness in the global market through a large-scale economic potential and derive synergy for the discovery of a new growth engine. Lotte Chemical Corporation completed construction of an additional naphtha cracking center (NCC) in Yeosu last year. As a consequence, it secured the no. 1 rank in the domestic ethylene production. Currently, it is promoting a joint-venture business for polypropylene catalyst in the Yeosu factory and the PET/PP adhesive polymer business in the Ulsan factory. In 2013, Lotte Chemical Corporation plans to exert efforts for the realization of the vision as the largest chemical company in Asia by 2018 with 40 trillion won of sales by reinforcing the overseas and mega-trend businesses while continuing facility expansion without problems.

    Lotte Engineering & Construction plans to reinforce the competence for high value-added business and actively promote business expansion in overseas countries to realize continuous growth in 2013. The investment on a plant business is considered to be the new growth engine of the business and will be continuously expanded while taking the initiatives to develop new markets by actively promoting the private power generation business in Africa. Also, the construction of Lotte World Tower that aims to be completed by 2015 will be pursued as planned and based on the technology for high-tech high-rise construction through this construction project, it will exert utmost efforts to take the pioneering role in the high-rise construction market in and out of the country.

  • COMPLEX DEVELOPMENT PROJECT

    Complex development project

    Lotte pays attention to mega-scale projects that are promoted in and out of the country as another growth engine for the future. Such mega-scale projects are considered to be the area that can create synergy effect that gathers the capability of Lotte, accumulated in the fields of food, distribution, construction, and service. Also, it reinforces the brand image of Lotte in the local markets through overseas promotion and joint projects with other affiliates.

    The ‘Lotte World Tower’ started actual construction with basic concrete work. This project has a total of 3.5 trillion won investment and is composed of high-rise buildings including department stores, shopping malls, hotels, and offices. Upon the completion of the Lotte World Tower in 2015, it is expected to contribute to the expansion of the tourism industry as a landmark of Seoul and revitalization of the local economy.
    Also, the ‘Vietnam Hanoi Lotte Center’ is being constructed in Hanoi, Vietnam. It is expected to open in 2014 as a large-scale complex composed of a department store, five-star hotel, and offices, with a total of 400 million dollars investment. A Lotte Group complex is being constructed in Shenyang, in the northeastern part of China. Including a theme park, this construction project integrates the know-how of Lotte in the field of tourism and distribution through a shopping mall, hotel, and residential complex, aiming at its completion by 2017.