Lotte enters into India with the Havmor acquisition which will give the company a larger geographic presence
Lotte Confectionery Co. Ltd, will be acquiring Ahmedabad based ice cream maker Havmor Ice Cream Ltd for Rs.1,020 crore. The South Korean company will be entering India with a strong acquisition of Havmor. This deal is expected to be closed within a week.
Havmor was founded in 1944 and manufactures 150 kinds of products today. It has two plants and sells from about 30,000 dealers. Its ice creams are sold in 14 states. Pradeep Chona, chairman at Havmor Ice Cream Ltd. mentioned that it was a difficult decision since the brand has been nurtured by the team for more than 73 years. But Lotte Confectionery is the right brand to take the company to the next level. Havmor had also received interest from various multinationals like Hindustan Unilever Ltd and Nestle India Ltd. It is the seventh largest ice cream and frozen desserts maker in the country with a market share of 3.5%.
The value of the frozen desserts and ice cream segment in the country grew 20% in 2016 and reached to Rs.10,200 crore in terms of sales and is forecast to see a constant value compound annual growth rate of 11% over 2016-21.This could lead to sales of Rs.17,000 crore according to a report by market researcher Euromonitor International. The Gujarat Cooperative Milk Marketing Foundation Ltd sells the Amul brand and is the leading firm in ice cream and frozen desserts segment with a market share of 17%. Second largest is HUL with a market share of 9.7%, according to the report.
With the acquisition, it will be easier for Lotte to enter into India and the company will be able to have a larger geographic presence. It plans to expand the market power from the northwest region to all across the country with their entry into the Indian ice cream market. Lotte entered India in 2004 and has established large scale Choco pie factories in Delhi and Chennai. It achieved a market share of 90% last year.
Havmor will continue its operations of the signature chain of restaurants and eateries all across Gujarat as its signature brand and concept café-Huber and Holly.