SK Group Chairman Chey Tae-won

SK Innovation President Kim Joon

SK Telecom President Park Jung-ho

K Hynix President Park Sung-wook. (Photos: SK Group)

SK Group plans to shift into a “practicality mode” to break through the fixated low growth rate trend. 

The group has deployed “practical” manpower at the forefront of developing new businesses and recently carried out optimal reorganizations. 

These moves may be construed as being a reflection of Group Chairman Chey Tae-won’s bid to double down on and innovation despite a special counsel’s probe into the group, business analysts said.

The group’s focus on practicality is a peek into the overhaul of the SUPEX Council, the group’s de facto governing body. The chairman of the council and most heads of the committees under the control have been replaced. CEOs of the group’s major subsidiaries have been filled with professional managers specializing in the development of new businesses or with global business experiences.

SK Innovation, which is hitting the accelerator to propel innovation, is devoting itself to M&As and expanding businesses. 

The company declared its vision of rising to a global energy and chemicals leader by making the most of petroleum and chemical production facilities with the highest-ever capacities the company had secured last year. The improving of some facilities, which recently coincided with regular maintenance and repairs, has led to a rise in the production of petroleum and chemicals facilities. 

This brings SK Innovation’s daily crude oil refining and annual para-xylene (PX) production capacity to 1.115 million barrels and 2.8 million tons, respectively. 

New SK Innovation President Kim Joon announced a New Year’s plan to invest huge 3 trillion won in such businesses as chemicals, petroleum development and exploration, and battery. 

In particular, SK Innovation is steeping on the gas to make vigorous inroads into overseas markets. The head office of the resources development E&P business and key manpower have been relocated to Houston. The move is part of the company’s efforts to acquire shale gas production fields in the United States and expand petroleum businesses in North America. 

SK Innovation’s subsidiaries are now contemplating M&As. The company is apparently trying to acquire a stake in Shanghia Seco Petrochemical Co. 

SK Innovation said in an electronic filing that it is considering diverse business opportunities, including the acquisition of Chinese companies, but nothing has been decided yet. 

SK Innovation is trying to make its way into foreign markets through partnerships with global players under a global partnering strategy the company has embraced. A few outcomes this strategy has yielded included are the establishment of a para-xylene plant in Ulsan, a joint venture with JX Energy of Japan and the Nexlene joint-venture project involving SAVIC of Saudi Arabia.

Sinopec-SK Wuhan Petrochemical, a joint venture between SK Innovation and Sinopec is the Korean company’s overseas success story, as it posted more than 400 billion won in operating profit after it was put into commercial production in 2014.

SK Telecom is spearheading massive innovation and changes to tap the ICT convergence eco-system, such as mobile communications, IoT, media, and platforms. The artificial intelligence service NUGU that made its debut last September is showing signs of potential for success. 

The company sold 2,000 units in two days after the release of the service and topped about 30,000 units as of the end of last month. The nation’s largest telecom service provider plans to expand the ICT business with tips from customers and experts under the concept of “growth-oriented artificial intelligence.”

New SK Telecom President Park Jung-ho unveiled a massive plant on Jan. 11 to pour 11 trillion won in investments, including 5 trillion won in new investments to secure an upper hand in the global ICT market. 

SK Hynix plans to continue massive investments to maintain a leader in the years to come and brace for the advent of the 4th Industrial Revolution. 

The company has already announced plans to spend 2.2 trillion won to build an advanced semiconductor plant in Cheongju, Chungcheongbuk-do, and pour 950 billion won in improving facilities in Wuxi, China. These moves are designed to upgrade the ICT environment to meet rising chip demand and maintain leadership in DRAM production.