South Korea's fifth-largest conglomerate, Lotte Group, ruled out a possible pullout from China despite a consumer strike and other retaliatory steps caused by a US missile shield that has seriously undermined the group's business in Asia's largest economy.
However, Hwang Kag-gyu, head of Lotte's control tower, the corporate innovation office, said the group's holding unit, Hotel Lotte Co., would put off initial public offering (IPO) for some time due to sagging duty-free sales. "It's been 20 years since we advanced into China, but our business there is still at at an early stage that needs continuous investment," he said.
China has taken a series of retaliatory steps, arguing the Terminal High Altitude Area Defense (THAAD) system would "seriously" hurt strategic interests of China and other countries as well as the security balance in Northeast Asia.
Lotte has been the target of a Chinese onslaught since the retail giant pushed ahead with a land swap deal to let US troops install a THAAD battery in its golf course southeast of Seoul. Lotte's duty-free business at home suffered a setback as it heavily depends on Chinese consumers and tourists.
"As our duty-free business, the mainstay of Hotel Lotte, is in trouble. "(IPO) will be done after our duty-free business is fairly under way," he said. "We have no other choice to watch because China did not speak out its mind."
Hwang's comment came as Lotte opened the Lotte World Tower, a new 123-story shopping and living tower complex in southern Seoul. The THAAD dispute has affected Lotte's attempt to woo rich Chinese investors into the tower's expensive residential space.
Lim Chang-won = firstname.lastname@example.org