SK Innovation will invest some 3 trillion won in chemical, oil exploration and battery projects this year as decided at the management meeting at the end of last year, the energy affiliate of SK Group said on Jan. 1.
The company plans to hire some 1,200 new employees, including technology-related positions, in the next five years to support the company’s growing ambitions in the coming years, the energy company said. This year, the company will hire around 100 college graduates and some 150 technology-related employees. President Kim Joon, who will take charge of the group’s entire energy sector (announced in the group’s personnel moves at year-end) said the company will set out to seek new growth engines with daring investments this year.
The company’s ambitious plans reflect Chairman Chey Tae-won’s request that every affiliate CEO make sure all of the company’s global projects are successful. To that end, he suggested they tour jobsites as soon as possible and be more hands-on until they have the results that are required.
The energy company’s investments this year will be directed to such vital areas as M&As, the expansion of battery plants and the battery separation business (a new business area that the company will enter) and other new businesses, the company said.
The biggest share of the investment will go toward taking over a majority stake in Shanghai Secco from British Petroleum’s stake by SK Integrated Chemical. The British oil major set up the project, which has a production capacity of 900,000 tons of ethylene annually, jointly with Sinopec of China. Other partners are Shanghai Petroleum (20 percent) and Sinopec (30 percent). Weighing heavily in SK Global Chemical’s decision to take over the Sinopec’s stake was SK Innovation’s record operating profit in 2016. The third quarter operating profit is expected to hit 2.379 trillion won, bringing annual profit for the year to 2.842 trillion won, the largest annual profit so far on record.
SK Innovation, in a conference call during Q3 last year, said it will communicate with the market over its plan to take over a stake in Shanghai Secco from Sinopec in early 2017. SK Innovation had continued to uphold its connection with Sinopec on a desire to set up a joint venture petrochemical entity in China, which may have led the company to pursue the stake from BP. The company is also in the middle of expanding its Nos. 5 & 6 battery plants in Seosan, South Chungcheong Province. Last year, company decided to expand the battery separation lines by adding two new lines.
The assignment of personnel overseas has been expedited to back up the company’s marketing offensives. The company relocated its head office for overseas oil exploration to Huston, Texas at the end of last year based on changes in the company’s operational setup, while SK Global Chemical moved its management to China in 2015.
Managing Director Ahn Soo-gil said the investments this year by SK Innovation would also be a great help to South Korea’s national economy.
SK Innovation Co Ltd, which owns South Korea's top refiner SK Energy, said on Sept. 9, 2016, that it was seeking to expand into the refining and lubricant sectors in cooperation with China's Sinopec Corp.
Chey Tae-won, the chairman of SK Innovation's parent firm, SK Holdings, and Sinopec president Wang Yupu discussed ways to strengthen their strategic partnership in a meeting in Beijing on Sept. 8, SK Innovation said in a statement.
Through a joint venture with Sinopec in 2013, SK Innovation subsidiary SK Global Chemical invested a total of 3.3 trillion won ($3 billion) into the Sinopec-SK Wutan Petrochemical joint venture.
The joint venture, in which SK Global Chemical has a 35 percent stake, operates petrochemical plants which produce about 2.5 million tonnes of ethylene and other petrochemical products annually.
"Building on the success of the joint petrochemical project, we hope business cooperation between the two companies to be stronger," Chey said in the statement. SK Innovation also aims to bolster its businesses in China through a joint venture or mergers and acquisitions of Chinese chemical companies, the statement added.
A view of the battery plant for electric cars of SK Innovation located in Seosan, South Chungcheong Province.(Photos: SK Inno)
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