VietNamNet Bridge – The marriage between local confectionery producer Bibica and Korea’s Lotte Confectionery Co. Ltd. turned from bad to worse as Bibica on last Wednesday raised its voice to reject information announced by its partner.

Bibica admits mistake when joining hands with Lotte

 Speaking at a press briefing in HCMC on Wednesday, spokesperson of Bibica said Lotte has deeply intervened in business strategies of Bibica since the two sides entered partnership. Therefore, Lotte’s information that it did not meddle in management over Bibica was wrong and seriously defamed Bibica trademark.

Therefore, Bibica held the press briefing to make clear the announcement. It is waiting for intervention from managing agencies to solve the problem.

Ngo Thi Phuong Thao, PR director of Bibica, said that Yang Seok Hoon, representative of Lotte Confectionery in Vietnam and Bibica’s finance director, was invited to the press briefing. However, Yang, who directly provided the information, did not attend the event.

Truong Phu Chien, CEO and legal representative of Bibica Corporation, said that Bibica and Lotte signed three contracts from 2006 to 2009, including a share trading contract, a strategic cooperation contract and a chocolate pie technology transfer deal.

It is completely wrong to say that Lotte does not play direct management role in Bibica. The Korean group has appointed two members to the board of directors of Bibica, including the chairperson.

Bibica has enough evidence to prove that Lotte has managed Bibica directly and signed many documents. Lotte actually has participated in strategic decisions of Bibica, Chien stressed.

He showed documents proving that Lotte asked Bibica to deploy enterprise resource planning (ERP) system with total investment cost of over US$500,000 and annual maintenance fee of nearly US$43,000, though Bibica was applying solutions of Oracle.

When Lotte requested Bibica to apply the ERP solution, the server was placed in Korea while Lotte was the administrator. Chien in his opinion disagreed at the solution but Lotte still proceeded with its plan which then failed.

For the pie production line, Lotte just makes a single one product branded Lottepie. However, materials are not suitable with weather conditions in Vietnam and Bibica has suggested Lotte to improve quality for many times, he said.

Right after the meeting, Lotte registered to buy an additional 4.4% stake to raise its ownership in Bibica from 38.6% to 43%. At the shareholder meeting on October 28, Lotte will hold this stake in its hand, Chien said.

Meanwhile, Saigon Securities Inc. (SSI), the second biggest shareholder after Lotte, has expressed hope to make long-term investment in Bibica.

SSI considers Bibica as common property and wishes to develop the enterprise, not turning Bibica into a private asset. The broker also has strong financial capability, human resources and wide relationship, Chien commented.

Source: SGT