Lotte to expedite $5.2 bn overseas investment following its chief’s pardon

Lotte Group Chairman Shin Dong-bin

South Korea's Lotte Group has budgeted about 7 trillion won ($5.20 billion) to expand global operations mainly in chemical and battery materials after Chairman Shin Dong-bin has been cleared of judiciary restrictions from a presidential pardon earlier this month.

According to industry sources on Monday, the fifth largest conglomerate in Korea will invest 7.17 trillion won in four countries - the U.S., Vietnam, Hungary, and Indonesia. Its biggest investment, worth $3.9 billion, will go to the Lotte Chemical Indonesia New Ethylene (LINE) project to add a petrochemical complex in Banten, Indonesia. After completion in 2025, the complex can produce 1 million tons of ethylene and 520,000 tons of propylene per year, which are expected to generate an annual revenue of $2.06 billion.

Lotte also plans to invest $1.2 billion in Vietnam, of which $900 million will be used to build the Eco Smart City complex in Thu, Thiem, Ho Chi Minh, and $244.49 million on Lotte Mall Hanoi.

Concept for Eco Smart City complex in Ho Chi Minh, Vietnam [Image provided by Lotte Engineering & Construction]

In North America and Europe, Lotte will enhance material business. Targeting the electronic vehicle (EV) materials market in the U.S. and Europe, it will invest $244.49 million in building a plant in Kentucky to produce anode foils, one of the core materials for lithium-ion batteries. Lotte Chemical and Lotte Aluminum’s joint venture Lotte Aluminum Materials USA will lead the project, with an aim to complete its construction in 2025.

Lotte will invest an additional $81.48 million in its anode foil plant in Hungary. Built in the Lotte Cluster with an investment of 110 billion won in 2020, the plant that is the only anode foil factory in Europe. It churns out 18,000 tons of anode foils a year. and the capacity would be doubled to 36,000 tons after ramp-up by 2024.

The overseas investment plans underscore the Korean conglomerate's shift away from China to other markets after bearing the biggest burn from a diplomatic row between Seoul and Beijing over U.S.’s anti-missile system deployment in Korea. With the new overseas investment, Lotte also focuses more on new growth engines such as lithium-ion battery materials business and large-scale complex construction following the special pardon of its chief Shin by South Korean President Yoon Suk-yeol.

Lotte in May announced five-year investment plan totaling 37 trillion won, of which 15.2 trillion won will be used in grooming new business areas, including bio, healthcare, and mobility, and 21.8 trillion won in its existing portfolios, such as logistics, foods, and chemicals.

Lotte Corp. shares rose 0.75 percent to 40,400 won in the early trading on Tuesday.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]