Confectionery manufacturer Lotte India Corporation Ltd plans to set up its second manufacturing plant near Chennai. The company will invest close to Rs 200 crore for its expansions.
K V Ramachandra, managing director, Lotte India, said, the company’s board has approved the proposal to go for a rights issue. The company hopes to raise about Rs 175 crore through the issue and the rest will come through internal accruals, he added.
Lotte has purchased 21.5-acre land near Chennai and about 18,000 sqft to 19,000 sqft will be allotted to reasearch activites, he said. In the next 16 to 17 months, when the new facility becomes operational, Lotte India could export to Africa, South Asia and Middle East, he added. About 14 to 16 new products will be added to Lotte’s existing product line when the facility is ready, he said.
At present, Lotte imports few of its gum and baked products from its parent company in South Korea. “It is far more cheap to manufacture here than in Korea and export to South Asia, Africa and Middle East. The Chennai facility will produce high-technology and high-value confectioneries,” he added.
Lotte’s existing plant near Puducherry manufactures about 15,000 tonne of confectioneries and this would be doubled with the new facility in place, Ramachandra said. The company also has tie ups with third-party manufacturers – one in Kerala and two in Maharashtra. One more will be partnered in Chennai within three months, he said. The company’s low-end products will be outsourced to contract manufacturers, he added.