The Hindu Business Line : Lotte’s new facility to make high-end snacks and gums

Chennai, Feb. 4 Lotte India Corporation Ltd (formerly Parry Confectionery) plans to start work on a new facility at an investment of Rs 200 crore in the next couple of months. The company has acquired a 22-acre parcel of land for the purpose at Nemam in Tiruvallur near Chennai.

According to Mr K.V. Ramachandra, Managing Director, Lotte India, the company is working out the funding for the project. Earlier, in May 2007, the company’s board announced that it would come out with a rights issue. But, on January 24, 2008, it decided not to proceed with the rights issue and said that it would weigh other options instead.

The proposed 3-lakh sq ft facility will, in all likelihood, have a production line for ‘Chocopie’, a chocolate coated pie, in the first phase. “This may be followed by lines for other high value-added products in the snacks category and gums the company is planning to bring into the country from its Korean parent,” said Mr Ramachandra.

The company is already seeding the market for Chocopie in the country. “The product has been well received in the market,” he says.

In the year 2004, the Lotte Group of Korea acquired 60.39 per cent stake in the Murugappa Group’s Parry Confectionery for a consideration of Rs 64.48 crore (at Rs 283.12 per share). It later acquired another 20 per cent stake from the market through an open offer at Rs 283.25 per share. Now the Lotte Group holds 80.39 per cent in the company. However, the company needs to bring down its stake to 75 per cent before April to conform with the listing agreement with the stock exchanges.

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