Lotte Confectionery of South Korean retail giant Lotte Group is seeking to step up cooperation with its Japanese sister company in a bid to elevate its global status, according to the confectionery unit chief.

“We have been stepping up collaboration with the Japanese operation with the goal of becoming the world’s fifth-largest confectionery manufacturer by 2020,” Lotte Confectionery CEO Kim Yong-soo told Korean media Thursday. 

Kim said the company would be forging closer ties with Tokyo-based Lotte Holdings, which are now both under the Lotte Group leadership.

Tokyo-based Lotte Holdings and Seoul-based Lotte Confectionery currently rank 17th and 18th place in the global confectionery market, respectively. Their combined sales stand at around 8th place.

Lotte Confectionery has subsidiaries in eight nations, including China, India, Russia and Belgium, while Lotte Holdings has subsidiaries in Thailand, Malaysia, Indonesia and Philippines.

Kim said Lotte Confectionery would tap into new markets and share a global sales network with the Japanese unit.

“We will purchase main ingredients together and share information on clients and overseas factories,” Kim said. “We will also unify the package designs of five mega brands and jointly conduct R&D.”

Lotte chairman Shin Dong-bin has been tightening his grip on units in both Korea and Japan after his elder brother Dong-joo was forced out of succession last year. Dong-joo was formerly the vice president of the Japanese operation.

This month, Lotte Confectionery in Seoul had announced a plan to conduct a 10-for-1 stock split to lower the price of Korea’s most expensive equity.

Its share price ended at 2.588 million won ($2,224) on Thursday, down 0.15 percent from Wednesday.

When shares are relisted on the Seoul bourse on May 17, the face value of common stocks will start at 500 won a share. The number of outstanding stocks will rise tenfold to 14.21 million.

Lotte founder Shin Kyuk-ho started a small confectionery business in postwar Japan in 1948 and later developed that business in South Korea, making it into a business empire that owns 74 affiliates in 20 countries.

(khnews@heraldcorp.com)