South Korea’s Lotte earmarks 50tril won for expansion drive
SEOUL: South Korea’s Lotte Group has reset a five-year investment plan just two years after its initial announcement, saying it now aims to spend 50 trillion won (RM183.32 billion) through 2023.
The group had previously pledged US$35.2 billion (RM146.49 billion) through 2021 after chairman Shin Dongbin apologised for a corruption probe involving his family.
However, in the intervening years, the chairman’s own legal battles stalled that plan.
The plan follows other longterm spending pledges from Samsung Group and Hyundai Motor Group, made after the liberal government assumed office in May last year calling on major firms to invest more in the local economy and create jobs.
“Lotte’s investment plan is typical of a South Korean family-run conglomerate,” said Park Ju-gun, head of research firm CEO Score.
“When a family member emerges from a scandal, the firm announces an investment plan as a sort of gesture.”
Samsung similarly announced a major investment plan in the months after the release from jail of heir Jay Y. Lee, who had also been convicted of bribery.
“It’s also a tradition to announce big investment plans usually within months of a new government, to respond to its the administration’s call for support to boost in strengthening the economy,” said Park.
The new plan includes about 12 trillion won to be spent next year to expand chemical plants in South Korea, Indonesia and the United States.
The amount represents the group’s largest investment for a single year, exceeding the 11.2 trillion won spent on the purchase of a petrochemical firm in 2016.
“The plan reflects our will to quickly normalise management activities that recently slowed, secure competitiveness for future growth and to contribute to revitalising the national economy,” said holding company Lotte Corp .