Nestlé and Lotte Wellfood are winding down their joint venture in South Korea.
Lotte-Nestlé Korea, which was established over a decade ago, will cease operations in the first quarter of the next year, as confirmed by a statement from Nestlé’s subsidiary in the region.
Founded in 2014, Lotte-Nestlé Korea has focused on marketing pet-food products alongside coffee and culinary lines intended for the foodservice sector.
Thomas Caso, the CEO of Nestlé’s operations in South Korea, stated, “Nestlé and Lotte have collectively made this decision after comprehensively considering various factors. These factors include: our overall global priorities, as well as domestic market conditions and our shared abilities to win. Both companies will strive to ensure stable operations and change management until the end of joint venture operations.”
In an exciting development, Nestlé will establish a new pet-food business in South Korea called Nestlé Purina PetCare next month.
The company declined to elaborate about potential job impacts and whether the new pet-food unit would oversee coffee and culinary brands locally, beyond the official statement.
Earlier this month, Nestlé, the world’s largest food group, revealed its acquisition of full control of the Chinese confectionery business Hsu Fu Chi.
Nestlé purchased a 60% stake in Hsu Fu Chi in 2011 and subsequently acquired the remaining 40% shareholding from the founding Hsu family.
In its statement, Nestlé announced that the transaction will “enable wider and easier access to Nestlé global brand and product resources for Hsu Fu Chi to achieve its growth agenda.”
Recently, the KitKat maker reported its 2024 financial results, noting that organic net sales grew by 2.2% year-on-year to SFr91.4bn ($100.8bn). This growth was driven by strong performances in coffee, confectionery, and pet care, particularly within emerging markets and Europe. However, net profit experienced a decline of 2.9% to SFr10.9bn.
Moreover, Nestlé reported that its “real internal growth” – which excludes pricing impact from organic sales – increased by 0.8%.
The company has launched a robust three-year cost-saving strategy aimed at achieving SFr2.5bn in savings by the end of 2027.
CEO Laurent Freixe – who assumed the role in September – remarked, “We are on a journey. It will take time until we are firing on all cylinders.”
