Lotte Chilsung Beverage(005300) and Lotte Wellfood(280360) are teaming up with Thailand's largest retail company to target the Southeast Asian market.
Lotte Chilsung Beverage said on the 10th that it signed a memorandum of understanding on the 9th at CP Extra's Bangkok headquarters to cooperate on beverage and bottled water businesses.
CP Group is a major Thai conglomerate in food, retail, and telecommunications. Its retail affiliate, CP Extra, operates Makro and Lotus's, Thailand's hypermarkets and warehouse-style stores.
Shin Yoo-yeol, head of future growth at Lotte Corporation, and Tanit Chearavanont, CEO of CP Extra, attended the signing, along with other senior officials from both companies. Lotte Wellfood also took part in the agreement.
Under the agreement, Lotte secured a solid sales channel to place its products in bulk at large Thai retailers. Lotte Chilsung Beverage will expand sales of drinks such as Milkis, Chilsung Cider, and bottled water at Makro and Lotus's, broaden its export lineup, and pursue development of CP Extra–exclusive new products.
Lotte Wellfood and Lotte Chilsung Beverage plan to explore collaboration, including joint product development, by using CP Extra's distribution network and customer and market data in Thailand and Southeast Asia. The idea is to go beyond simply importing and selling goods by combining Lotte's brand strength with CP Extra's local distribution capabilities.
A Lotte Chilsung Beverage official said, "This agreement is meaningful in that it establishes a long-term foundation for cooperation with CP Extra, which has a local distribution network in Thailand," adding, "We will roll out a variety of products tailored to local consumer demand."
