Lotte Wellfood's Pepero lineup includes original, almond, white cookie and chocofilled varieties. (Lotte Wellfood)

Lotte Wellfood announced Tuesday it plans to merge its Indian subsidiaries, Lotte India and Havmor Ice Cream, to improve operational efficiency and enhance its presence in the Indian market.

According to the company, the boards of both affiliates approved the decision in meetings held Monday. Under the merger agreement, Lotte India will acquire Havmor Ice Cream, and both brands will continue their product lines.

"Lotte Wellfood has decided to create a combined entity in India to enhance our presence in the country and drive further growth," said Lotte Wellfood CEO Lee Chang-yup.

"We are increasing our investments in the Indian market, which is becoming a key area for us due to its large population and strong economic growth."

The merger process, including securing stakeholder approval, is expected to be completed within this year, with the combined entity launching early next year.

Lotte Wellfood explained that the merger aims to boost business efficiency and create synergies between the two units, such as diversifying product offerings and enhancing logistics and manufacturing capabilities, with the goal of achieving annual sales of 1 trillion won ($720 million).

Lotte Wellfood entered the Indian market in 2004 by acquiring local confectionery company Parrys, later renamed Lotte India. Lotte India’s sales marked 103.4 billion won in 2023, up from 92.9 billion won in 2022.

In 2017, Lotte Wellfood acquired Havmor Ice Cream, which reported sales of 165.6 billion won last year. Havmor Ice Cream’s new manufacturing facility, built with an investment of about 70 billion won, is expected to begin operations in the second half of this year.

Looking ahead, Lotte Wellfood said it intends to expand its presence from western India to the central and southern regions. Additionally, the company aims to open a new manufacturing facility in the second half of next year for its flagship product, Pepero, tailored to local tastes.