Message from the President

© L/KMP

Visiting Cocoa-Producing Areas in a Milestone Year

The year 2024 marked a milestone for us, celebrating 60 years in the chocolate business. Coinciding with this achievement, in October of that same year I visited cocoa farms and a local school in Ghana, one of our main sources of cocoa beans. Watching those children, bright-eyed and studying hard in conditions that could hardly be described as adequate, strongly reaffirmed in me the need to help remedy the problems facing these areas.
In recent years, the depreciation of the Japanese yen and a historic rise in cocoa prices following poor harvests in West Africa has led to increased discussions regarding the sustainability of our business both inside and outside the Company. We have built strong relationships with both producers and suppliers, primarily in Ghana, and have worked for many years to procure cocoa beans sustainably. In addition to our efforts to eliminate child labor and prevent deforestation, we also provide Good Agricultural Practices training to help increase cocoa production. Notably, I have heard that farmers who received this training were less affected by the poor harvest than farmers who did not receive it. These efforts have been successful; despite the impact of rising prices, they have helped us continue to secure the cocoa beans needed to produce our products. That being said, these times of greater and greater uncertainty have served as a strong reminder of the importance of sustainability, specifically as a means to maintain resilience in times of emergency.
Better productivity, coupled with better lives for farmers, will make cocoa farming a more attractive occupation, leading to greater number of cocoa producers in the future. Activities toward these ends are highly significant to the Sustainability of our chocolate business.
On the other hand, one company can only do so much. Therefore, in 2024 we started a biochar pilot project in collaboration with other cocoa related companies. This project involves taking cocoa pods that have been discarded in cocoa-producing areas, converting them into biochar, which locks in the carbon, and spreading them on farms. Not only does this improve production, it also helps with decarbonization. We will assess the effectiveness of this process, plus optimal application methods, onsite. I would like us to keep working with stakeholders to more impactfully resolve social issues.

A Human Resource Strategy Interlinked with Our Business Strategies

Our business strategy for sustainable growth has three pillars: 1) improve the profitability of existing domestic businesses, 2) accelerate the growth of overseas businesses, and 3) find and cultivate new businesses. As we start to see signs of a gradual recovery from a deflating economy, we are trying to raise the profitability of existing businesses, focused on domestic confectioneries and ice cream, through a brand-centric shift from quantity to value, and by increasing productivity. Then, to spur growth for the entire Group, we will use profits earned from our existing domestic businesses as the foundation for active investment in our businesses overseas. We will also actively seek out and cultivate new businesses, hoping to proactively sow seeds for future growth springing from these ventures and for synergies with existing businesses.

Human capital is of utmost importance when it comes to implementing these management strategies. Knowing this, we plan to promote a human resource strategy that is interlinked with our business strategies and will lead to the cultivation of a group of people with the necessary skills to help us grow. Accordingly, we will increase investment in acquiring and developing such talented people. We will also maintain our focus on raising employee engagement. This involves facilitating a variety of work styles and updating our corporate culture to better respect and cultivate diversity. In doing so, all employees will be able to show their full potential. Improving our engagement score is one of the goals set within LOTTE MIRAI CHALLENGE 2048. I see this score as a type of report card for us officers, written by the employees. Employee engagement forms a comprehensive assessment of officers based on whether employees have a positive work environment, how enthusiastic employees are about their duties, and whether management can be trusted. I promise that employee feedback will not fall on deaf ears—we will listen, take it seriously, and use it to improve. We will continue to evolve so that people will want to work at LOTTE and be satisfied with their choice.

For a Happier Future

In today’s rapidly changing and difficult-to-predict business environment, I feel it is increasingly important to state our purpose, our reason for being, clearly. So in 2023, working together with our employees, we developed a new Purpose: “To create a happier future by connecting people through original ideas and uplifting experiences.” The phrase “a happier future” reflects our determination to help realize a sustainable planet and society, and bring prosperity to the lives of all people.
Our business draws upon the many bounties of nature for support, for raw materials first and foremost. We also draw upon our many stakeholders, including the farmers who produce our products, our business partners, and our customers. This means that our work to resolve issues related to the environment and human rights, to realize our Purpose of a happier future, and to pass this future on to the next generation are the very definition of business activities for sustainable growth.
There are likely many challenges waiting for us beyond FY2025. However, change is not something we fear. Instead, we will continue to ask ourselves how to ensure a happier future and will work with stakeholders to achieve sustainable growth and increase corporate value. I sincerely appreciate your support as we move forward in this endeavor.

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