"Just Two Days After the Chairman's Visit"... Lotte Injects Another 250 Billion Won 'Here'

All Funds Allocated to Songdo Plant 1 Construction
Seventh Capital Increase, Total Investment Reaches 1.5 Trillion Won
'All-In on Bio' as Petrochemical Growth Slows

Lotte Group is injecting another 250 billion won in capital into its bio business, which it has designated as a future growth engine. This marks the seventh paid-in capital increase for Lotte Biologics since its establishment, following major investments in acquiring a U.S. production site and building the Songdo Bio Campus. With its traditional core businesses such as petrochemicals entering a period of slowing growth, the group is pressing ahead with large-scale investments to foster bio as its next growth pillar.

In particular, industry observers note that this large-scale capital injection demonstrates the group's commitment to nurturing its bio business, as it was announced just two days after Chairman Shin Dong-bin personally visited the construction site of Plant 1 in Songdo, Incheon.

According to the Financial Supervisory Service’s electronic disclosure system on July 12, Lotte Biologics announced a paid-in capital increase of 255,309,520,000 won through a shareholder allocation method to raise facility funds. The newly issued shares amount to 4,209,000, and all funds raised will be invested in the construction of Plant 1 at the Songdo Bio Campus. Existing shareholders—including Lotte Corporation, Hotel Lotte, and Lotte Holdings Japan—will participate in this capital increase. The structure once again sees group affiliates, rather than external investors, providing the funds.

A Lotte Group representative stated, “During the previous capital increase in March, Lotte Corporation contributed 60%, while Lotte Holdings Japan and Hotel Lotte each contributed 20%. This time, the capital infusion will be similar. As the group has announced plans to invest about 4.5 trillion won in Lotte Biologics, additional investments will follow in the future.”

This disclosure drew attention as it came immediately after Chairman Shin Dong-bin’s on-site visit to Songdo Bio Campus Plant 1. During his visit on July 3, Chairman Shin reviewed the preparations for production and global order strategies, emphasizing that “bio is a core industry that will drive the group’s new leap forward.” On the same day, Lotte Biologics’ board of directors resolved to carry out this capital increase, and the investment plan was subsequently announced through a public disclosure. The simultaneous on-site management and financial support underscore the group’s strong commitment to the bio business.

The background to Lotte Group’s focus on bio lies in the growth limits of its existing core businesses. The group's mainstay distribution sector has seen slowing growth as consumer sentiment slumps and polarization intensifies, making it increasingly difficult to expect profitability at previous levels amid delays in the recovery of Chinese group tourism and a decline in Daigong sales. Petrochemicals have also been impacted by a prolonged global supply glut and sluggish market conditions.

In recent years, Chairman Shin has worked to shift the group’s business portfolio from a ‘retail-centric’ focus to future industries. Since the launch of Lotte Biologics in 2022, the group has made aggressive investments in the bio sector, including the acquisition of the Bristol Myers Squibb (BMS) Syracuse plant in the U.S., the construction of the Songdo Bio Campus, and the establishment of an Antibody-Drug Conjugate (ADC) platform.

Including this latest capital increase, the group’s total investment in Lotte Biologics has reached approximately 1.5 trillion won. In addition, Lotte Corporation has provided a capital replenishment agreement for a loan of about 900 billion won, further demonstrating group-level financial support. These numbers clearly illustrate the group’s strategy to foster bio not just as a new business, but as a core pillar that will drive Lotte’s future growth.

With such large-scale funding injected, market attention is now focused on how quickly Lotte Biologics can achieve actual order results. Songdo Plant 1 recently received approval for use, completed its production facility buildout, and has entered full-scale commercial production preparation. The company plans to complete trial operations and production system validation in the second half of this year and obtain GMP certification by year-end—about six months ahead of the initial schedule. A Lotte Group representative stated, “Our goal is to begin commercial production starting next year.”

An industry official commented, “Bio is a capital-intensive process industry that inevitably incurs initial losses due to large upfront investments. Lotte’s repeated capital increases show that the company is focused on long-term growth rather than short-term profits. Ultimately, the key lies in how quickly it can secure global clients and establish a stable order pipeline.”

This content was produced with the assistance of AI translation services.