Lotte Group Chairman calls for innovation to survive uncertain environments

Lotte Group Chairman Shin Dong-bin [Photo provided by Lotte Group]

Lotte Group Chairman Shin Dong-bin highlighted an innovative strategy to ensure sustainable growth amid growing uncertainty in the corporate environment.

On Tuesday, Shin attended the Value Creation Meeting, a bi-annual event for the heads of group affiliates, and discussed mid-to long-term visions and agendas. The meeting was attended by 80 officials from the group, including Vice Chairman Lee Dong-woo.

Shin called on the participants for a shift in strategy to enhance corporate value. In particular, he stressed the importance of global and new businesses.

“In an era of uncertainty, the economy becomes vulnerable to low growth due to the aging population and low birth rate, which explains why global expansion is essential,” Shin said.

“While a shift toward approaches of environmental, social, and corporate governance is necessary, we need to enhance our management capabilities concerning cash flows and capital spending in addition to focusing on expanding revenue and profit.”

Shin urged the adoption of artificial intelligence (AI), noting that “finding new opportunities and adopting them in practice is of importance in that the historic inventions of the Internet and wireless devices shaped the world.”

He cited the term Unlearning Innovation as a keyword for the next quarter, which suggests a growing need for innovative business strategy to be apart from old-fashioned thinking and action that hinder further growth.

Lotte Group has faced several external challenges, such as global economic polarization, high inflation and interest rates, and rapid technological advances.

Under the circumstances, Lotte Chemical Corp. has logged an operating loss for a fourth straight quarter and the group‘s retail sector has suffered slow growth amid sluggish consumption.

Despite the hardships, however, Lotte Group has continued large-scale investments.

While Lotte Biologics Co. bought a bio-pharmaceutical plant in New York for $160 million, Lotte Chemical completed the acquisition of Iljin Materials, a prominent battery material producer, for a substantial amount of 2.7 trillion won ($2.1 billion).

Lotte is also gearing up to unveil its largest shopping mall, Lotte Mall Westlake Hanoi, in Vietnam, with the grand opening scheduled for September.

Lotte Biologics, which has driven the push for new businesses, is set for record investment to become one of the world’s top 10 contract development and manufacturing organizations (CDMO) by 2030.

It aims to build 3 mega-plants and a production facility with a total capacity of 360,000 liters. Each plant will be able to produce 120,000 liters of antibody medicines.

Lotte Healthcare will launch a healthcare platform Cazzle in September. The service is designed to offer customers recommendations for supplements or diets based on health condition data.