SK’s exports hit record high in first two months

SK Group, Korea’s third-largest conglomerate, said yesterday exports by its manufacturing affiliates reached a record high in the first two months of the year, helped by strong overseas sales of oil products and semiconductors.

The group, which owns Korea’s largest oil refiner and other chemicals and energy companies, said the combined exports of its manufacturing units reached 10.6 trillion won ($9.51 billion) in the January-February period, up 36 percent from a year earlier.

The exports accounted for 71.1 percent of the group’s total revenue of 14.9 trillion won from manufacturing subsidiaries.

SK has seven manufacturing companies including SK Innovation Co., SK Energy Co., SK Global Chemical Co., SK Lubricants Co., SKC Inc., SK Chemicals Co., and Hynix Semiconductor Inc.

Exports surged on the back of higher overseas demand for petroleum products as well as improved sales of polyester films, the group said.

SK Group expects exports by its manufacturing affiliates to surpass 16 trillion won in the first quarter, more than double the 8.97 trillion won from the corresponding period in the previous year.

“Given that Hynix earned a total of 10.3 trillion won in sales last year and 95 percent of it was generated from exports, we believe exports of our manufacturing affiliates could reach 60 trillion won this year for the first time in our history,” an official at SK said.

Market watchers estimate SK manufacturing arms’ dependency on overseas sales is expected to increase further given that SK Group last month completed a 3.37 trillion won deal to buy a major stake in Hynix Semiconductor, the world’s No. 2 memory chipmaker.

In 2002, exports from SK’s manufacturing companies weren’t all that strong at 5 trillion won. Performance started to improve after SK Group Chairman Chey Tae-won aggressively pushed global expansion starting in 2007.

In 2007, SK’s manufacturing affiliates exported 20 trillion won, followed by 23 trillion won in 2009 and 29 trillion won in 2010.

In 2011, the SK manufacturers’ exports jumped 57.6 percent on-year to 45.5 trillion won, or 62.9 percent of its total annual sales.

SK Group plans to invest a record 19.1 trillion won this year, which is more than double last year’s 9 trillion won, in fuel growth.

Chey emphasized to employees that the group can achieve sustainable growth only when it makes aggressive investments.

“Although the current export environment isn’t that good due to the euro zone debt crisis, we expects SK Group will become a driving force contributing to Korea’s exports through aggressive investment and global expansion efforts,” said Lee Man-woo, a public relations official at the group.

By Kim Mi-ju, Yonhap [mijukim@joongang.co.kr]