SEOUL -- South Korean companies are aggressively increasing their investments in India, drawn by the country's fast-expanding economy and youthful demographics.
Lotte Confectionary has agreed to acquire a 100% stake in Indian ice cream maker Havmor for 164.5 billion won from Ankit P. Chona and six other individuals. Havmor is the second-largest ice cream maker in the northwestern province of Gujarat by market share, with 69.8 billion won ($64.3 million) of sales for the 2016 fiscal year which ended in March 2017.
"We expect to create synergy by combining Havmor's business skills and our own sales channels," said Lotte in a statement on Thursday. "We plan to expand Havmor's market dominance ... nationwide [in India] from its base of the northwestern province."
Lotte group is expanding into the Indian market under the leadership of Chairman Shin Dong-bin, attracted by its growth potential and positive demographic profile. India's economy expanded 7.1% in 2016, and has grown at a rate of over 7% for three consecutive years.
GS is another Seoul-based conglomerate gearing up for investment in Asia's third-largest economy. The group, which focuses on energy, construction and retail, hosted its top management meeting in New Delhi earlier this month, discussing growth strategies in India and the Southeast Asian market.
"To have more successful business in the Indian market, we need to make our efforts in localization by understanding its culture more deeply as well as hiring excellent local talents with specialties in related industry," GS Chairman Huh Chang-soo told chief executives of its affiliates at the meeting. "I ask you to expand revenues in our business here and find out new projects actively."
GS E&C is running an architecture affiliate in Delhi with 300 professional architects. They have successfully completed more than 40 projects for large-scale refinery and petrochemical plants in Asia, the Middle East, the Commonwealth of Independent States and North Africa since its launch in 2006. GS Shop is a key shareholder and a co-operator of Home Shop 18, the largest home shopping channel in India, which airs to 100 million households nationwide, including New Delhi, Mumbai, Hyderabad and Bengaluru.
Economists say that India will continue to offer many business opportunities to South Korean companies, not only in the consumer market but also in infrastructure building.
"India is becoming more urbanized and its cities are growing bigger, providing business chances to foreign companies," said Kang Seon-koo, an economist at LG Economic Research Institute. "They need to find out new projects in promising states, such as Maharashtra, Andhra Pradesh and Tamil Nadu, where more than 10 million middle-class people are living."