SK Innovation shifts to battery, chemicals
Top refiner tries to expand footing in global markets
SK Innovation is shifting its focus to car batteries and petrochemicals to strengthen its competitive edge and bolster its bottom line, the company CEO said Tuesday.
Korea’s largest refiner plans to increase its car battery production to capitalize on the rapidly growing electric vehicle segment, while expanding its petrochemical business in China, which accounts for 40 percent of the global demand.
SK Innovation CEO Kim Jun also said the company will continue to enhance its core competence in refining, lubricants, natural resources exploration and other oil-related businesses. Toward that end, it plans to partner with other global leaders in acquiring promising firms.
“We will pursue deep change by focusing on the car battery and petrochemical industries. These two sectors possess huge growth potential,” Kim said.
“We have been cautious about expanding our battery business. But we will take an aggressive approach by boosting our production capacity and reinforcing our sales network,” he said. “For the petrochemical business, we will shift to producing premium, high-value-added products and make the best use of the rapidly-expanding Chinese market.”
SK Innovation aims to capture about 30 percent of the global electric car battery market by 2025, which is projected to grow to at least 300 gigawatt hours (GWh), up from 25 GWh in 2016. One GWh is equivalent to covering batteries for 40,000 electric cars a year.
“The car battery market will likely be dominated by a few players with technological prowess and mass-production capability. We would like to be one of them,” Kim said.
“As far as technological knowhow is concerned, we are already one of the global leaders. What we have to do is to bolster our output capacity and secure more orders from carmakers. We expect to capture about 10 percent of the global demand by 2020 and increase the ratio further to 30 percent by 2025.”
The company also plans to develop a battery capable of powering vehicles to travel up to 700 kilometers on a single charge by 2020. It currently supplies lithium-ion batteries for electric cars by Hyundai Motor, Mercedes-Benz, Kia Motors and other global automakers.
To create a more balanced and stable business portfolio, SK Innovation will also expand its petrochemical business, particularly in China, which will account for more than 60 percent of global demand in 2020.
“We have been producing mostly basic chemical products. But we would like to upgrade our facilities to produce packaging materials and automotive parts,” the CEO said.
“China will become the most important market for our chemical business. So we will build more plants and boost our sales network on the mainland to become one of the global top 10 chemical firms. We will look for more opportunities to acquire other chemical companies.”
SK will also continue to build its refining business by partnering with other refiners.
“We will boost our presence in Asia and the Middle East, and look for new business opportunities in North America,” Kim said. “SK Innovation will continue to strengthen its leadership in the global lubricant market and improve its bottom line. It will continue to explore and produce crude oil and natural gas around the world.”