Lotte Pumps Another 255 Billion Won Into Biologics Arm Days After Chairman's Visit

Lotte Group is channeling about 255.3 billion won of fresh capital into Lotte Biologics, the drug-manufacturing affiliate it is grooming as a future pillar. According to a regulatory filing on July 12, the company approved a rights offering worth 255.3952 billion won, issuing roughly 4.2 million new shares to fund construction of its first bio campus plant in Songdo, Incheon.

The timing drew attention: the decision came only two days after Chairman Shin Dong-bin personally inspected the Songdo Plant 1 site on July 3, where he reviewed production readiness and global order strategy and called biopharma "a core industry to lead the group's new leap." Lotte Biologics' board approved the capital raise the same day as the visit, before disclosing the plan publicly.

Unlike an outside financing round, the offering is a stock-allocation deal backed entirely by existing shareholders. Group holding company Lotte Corporation, Hotel Lotte and Japan's Lotte Holdings are all participating. A group official said the funding ratio would resemble a March round, when Lotte Corporation contributed six parts against two each from the Japanese and hotel arms, adding that further investment is planned toward a total commitment of about 4.5 trillion won.

This is the seventh rights offering since Lotte Biologics was founded in 2022, lifting the group's cumulative equity injections to around 1.5 trillion won. The company has moved aggressively, acquiring a Bristol Myers Squibb plant in Syracuse, New York, building its Songdo campus and developing an antibody-drug conjugate platform. The group has also provided financial backstops, including a liquidity pledge tied to a 900 billion won loan.

The bet on biologics reflects strain in Lotte's traditional businesses. Retail, long the group's backbone, faces polarizing consumption and slowing growth, while petrochemicals grapple with a prolonged global oversupply. Under Shin, Lotte has been steadily shifting its portfolio away from a distribution-centered model toward future industries.

The Songdo Plant 1 recently secured use approval and has entered full-scale commercial-production preparation, roughly six months ahead of the original schedule. Lotte Biologics plans to complete validation and GMP certification within the year and aims to begin commercial output next year. Analysts caution that biologics is a capital-intensive contract-manufacturing business where early losses are unavoidable, meaning success will hinge on how quickly the firm can win global clients and build a stable order book.