The JV would have enabled Lotte to begin manufacturing its world-famous chewing gum and bubble gum brands at Solan, Himachal Pradesh.
NEW DELHI: It’s official. The 70:30 joint venture between Lotte Japan and the Delhi-based D S Group is off.
Envisaged early last year, this JV was planned to be housed in a separate company called Lotte DS India, and would have enabled Lotte to begin manufacturing its world-famous chewing gum and bubble gum brands at Solan, Himachal Pradesh. The two partners had agreed to pump in Rs 75 crore in the initial phase of expansion.
With the breakup, the D S Group has abandoned any immediate plans to enter the confectionery segment. A D S Group spokesperson confirmed that the JV has been called off on “technical reasons. So, while we will not be entering the hard-core confectionery segment in the near future, we have existing strengths in the FMCG sector”.
Lotte, whose global product basket includes brands such as Lotte Xylitol, Lotte Juicy & Fresh and Lotte Spearmint chewing gums, Spout Café Coffee Candy and Booproo bubble gum, is already present in India as Lotte India (the erstwhile Parry’s).
The JV with the D S Group would have been its second parallel operation in India, giving the confectionery major not only the manufacturing muscle, but also a much wider distribution network.
The D S Group has access to 10 lakh retailers in what is known as the paan-beedi channel and another 15,000 dedicated wholesalers for its tobacco branda ‘Baba’ and ‘Rajnigandha’ paan masala, and this distribution network would have been put to good use by Lotte.
Interestingly, the domestic confectionery industry - which has been sluggish for the last few years - is heaving a collective sigh of relief at the breakup of the Lotte-DS JV, since this lessens competition.
And even as the Lotte-DS JV has been undone, Lotte India says it has successfully launched Booproo bubble gum and Spout chewing gum brands across the country.
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