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Lotte is a conglomerate in the top 10 largest firms in Korea with sales over $ 50 billion this year.
Lotte is a conglomerate in the top 10 largest firms in Korea. The purchase of more than 30% share of the BBC in early 2008 as market penetration steps Vietnam Food Group has revenues of more than $ 50 billion this year.
Cooperation was signed with the expectation that the growth of the BBC will reach over 30% / year. Benefits each party quite sharply. Lotte help the BBC to build 2 plants including Phase 2 BIBICA Eastern and Northern BIBICA plant. This unit also supports trade to BBC import and distribute products in Vietnam Lotte, as well as products exported to South Korea. To the BBC, the available factory BIBICA Eastern and 20,000 points of sale support for Lotte in production and distribution.
The belief was reinforced when the initial commitment was made. Profit in 2009 increased more than 170% of the BBC from 2008. Not long after that, Lotte has ownership rate increased by nearly 6% in the BBC again.
But the situation was altered since 2010. That year, though revenue rose more than 23%, but profits decreased to 27%. In 2011, revenue increased to 26% but profit rose 11%. Many shareholders believe that this increase is not really commensurate with the potential of the food sector, which has around 30% growth per year. Meanwhile, the BBC is the company second confectionery market, just behind Kinh Do (KDC). Clearly, the effect of strategic partnerships at the BBC is not high.
Speaking closer, doubts about Lotte transfer pricing was enough to give shareholders confused. In the past year, the BBC must enter Lottepie from partner companies in Korea Lotte (Lotte Confectionery) the cost of selling price (import price is $ 7.4 / barrel, the period from January to March 2.2012 5.2011 due Eastern BIBICA factory burnt). At the same time, the export price of products to Asian countries in 2012 are proposed at Lotte $ 6.9 / barrel. BBC estimates prices will cause the company losses of about 18% of the selling price. It is noteworthy that from 2010 onwards, the BBC has exported at $ 6.9 / barrel. Therefore, the question is that Lotte Current export price calculated on the basis of two years ago, while the price of raw materials has increased quite nhieu.Nhan comment on this, Mr. Truong Phu Chien, vice president and general Director of BBC, saying only: "We are in talks with Lotte to ensure fairness for both the 2".
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