SK Innovation, South Korea’s leading oil refiner, is seeking to turn into a total energy chemical company with “Deep Change 2.0” strategy this year. The Deep Change strategy has been emphasized by Chey Tae-won, chairman of SK Group, to bring radical reform.
During a press conference at the SK headquarters in Seorin-dong, Seoul, on May 30, SK Innovation president Kim Jun said that the company plans to expand its share of the global battery market to 30 percent by 2025 and turn SK Global Chemical into one of the world’s 10 largest chemical companies with sales of 33 trillion won (US$29.36 billion) in 2024. SK Innovation aims to become a company with sustainable growth by strengthening its main oil business and promoting batteries and chemicals as new growth engines at the same time.
To this end, the company will increase its battery production capacity from the current 1.9 gigawatt hours (GWh) to 10 GWh by 2020 and develop batteries that can run 700 kilometers by early 2020. It will also establish a new battery plant in Europe by the end of this year. The global battery market is expected to grow from 25 GWh in 2016 to 300 to 1,000 GWh in 2025.
For the chemicals business, SK Innovation will secure its production capacity in the Chinese market and focus on packaging and automotive chemical products which are the high value-added sectors. The company also plans to secure its ability to develop new chemical products through merger and acquisition (M&A) and open innovation. It has been seeking to acquire Dow Chemical’s ethylene acrylic acid (EAA) unit in order to secure high value-added packaging technologies and markets.
President Kim said, “China is expected to account for more than 60 percent of the global chemical market. We will set up a specialized subsidiary to boost our marketing capabilities in China and make various efforts to foster a second SK Global Chemical in China.” SK Innovation will improve the competitiveness of its core businesses, such as oil, lubricating oil and petroleum development, by expanding global partnerships and seek for additional business opportunities. Kim said, “We will expand the operating profit share of non-oil businesses from the current 50 percent to 70 percent in 2020. To this end, we will invest at least 10 trillion won (US$8.9 billion) by 2020.”
Meanwhile, SK Innovation reduced its net debts from 8 trillion won (US$7.12 billion) at the end of 2014 to less than 1 trillion won (US$890.31 million).