[THE INVESTOR] Swiss-based food and beverage company Nestle recently replaced all three board directors of LOTTE-Nestle Korea, a 50:50 joint venture that it established with Korean retail giant Lotte Holdings, according to industry sources on Sept. 27.
When the JV was established in 2014, the Korean company appointed four board members, while Nestle appointed two. The two companies changed the composition of the board in June 2015 to reflect their respective stakes in the firm and agreed to appoint three directors each.
Since then there have been no major changes to the board. This year, the Swiss firm decided to replace all three members including Erwan Vilfeu, CEO of Nestle Korea, replacing him with Karsten Kuehme, who joined the firm in 2006.
According to industry watchers the new appointments are aimed at improving its money-losing unit in Korea. The JV has been in the red since it was established and its accumulated losses reached more around 74.2 billion won (US$66.76 million) last year. LOTTE-Nestle Korea’s sales in 2017 also decreased to 282.9 billion won from 283.6 billion won in 2016, while posting an operating loss of 11.7 billion won.
By Song Seung-hyun (firstname.lastname@example.org)