Recognition for Daring Biz Leadership

Lotte Chairman Shin wins 2011 CEO of the Year Award for his daring and intelligent business management

Chairman Shin Dong-bin of Lotte Group, one of the fastest growing conglomerates in Korea, won the 2011 CEO of the Year Award from the Korea Management Association, the KMA said recently.
KMA cited Chairman Shin's daring reform of the group's operation, boosting the group's overseas sales last year to 6.8 trillion won, helping to expand the group's total annual sales to 61 trillion won, up 29 percent from the previous year. Encouraged by that record, the group is aiming for 70 trillion won in sales this year.
Behind the fantastic record has been Chairman Shin, who always stresses the importance of M&As for the group's sustainable growth. In 2010, the group took over Seven Eleven and Buy the Way, both chain convenience stores; Lotte Shopping took over GS Retail, the department store and mart sectors from GS Group; Honam Petrochemical took over Titan Chemicals Co. in Malaysia; and Lotte Shipping merged with Lucky Pie in China, bringing the group's total M&As to nine cases last year.
Lotte's annual sales growth has been led by its retail affiliates such as Lotte Department Store, large marts and convenient stores, while large manufacturing plants backed them with huge turnovers, such as Honam Petrochemical and Lotte Construction.
The group's retail sector posted 22 trillion won in sales last year, up from 17.3 trillion won the previous year, with Lotte Department Store leading the way with 10 trillion won in sales, followed by Lotte Mart with 8.7 trillion won and Honam Petrochemical at 14 trillion won, up from 9.5 trillion won in 2009, which is owed to the takeover of Titan Chemicals, a Malaysian petrochemical maker and raw materials seller.
Chairman Shin will continue to search for M&As overseas to expand the group's operations with the target to increase the group's total annual sales to 200 trillion won by 2018. They will look at such countries as India, Indonesia, Vietnam and Russia, among others, for M&A targets.
Chairman Shin has extensive and varied corporate management experience, beginning his career with Lotte as a standing director with Honam Petrochemical back in 1990. In 1997, he was promoted to vice chairman of Lotte Group and to chairman in February following his stint as the group's strategy headquarters manager in 2004.
Shin said the group will continue to expand its petrochemical business through M&As, hinting at more deals in such countries as Malaysia, Indonesia, Vietnam, Russia and India.
He also doubts anything will come of the investigation of Lotte Construction by the National Tax Service, adding that if anything comes up, he will take appropriate measures then.
Shin engineered the largest M&A for the group in July when he took over a Malaysian petrochemical company, Titan, for 1.5 trillion won, and he has been continuously active in looking for further M&A targets ever since.
Lotte Group officials said the petrochemical sector has become a key sector, for the group with the vice chairman paying a lot of attention to it lately.
Shin declared "Vision 2018" in March, which says the group will be active in M&As in order to achieve their target of 200 trillion won in total sales, bringing it among the top 10 business groups in Asia.
In order for the group to achieve the ambitious target, all affiliates should grow together doing their part, but the petrochemical sector will play a key role in boosting the total sales revenue for the group.
Lotte Group's total sales last year amounted to 49 trillion won, with the petrochemical sector chipping in 8.1 trillion won, or about 17 percent. In order to expand the petrochemical sector' revenues to as large as that of the retail sector, Shin decided to take over petrochemical companies in Southeast Asia, where they have been growing fast.
The group took over from three to four companies on average for the past several years, but this year the group has already taken over eight companies, three of them petrochemical companies. The situation means that the group wants to have its functional basic resources business grow, led by Honam Petrochemical and KP Chemical, with a focus on the expansion of the production of ethylene, among other products.
Honam Petrochemical took over a company that produces multiple radiocarbons to enter the radiocarbon market in August, showing the group's strategy to expand its resources material business. nw

Chairman Shin Dong-bin of Lotte Group who won the 2011 CEO of the Year award from the Korea Management Association for his outstanding management of the group, boosting its annual sales substantially to 61 trillion won in 2010, up 29 percent from the previous year


Photo on Courtesy of Lotte .