SK seeks to expand petrochemicals in China
Chey Tae-won, chairman of the Korean conglomerate, and Wang Yupu, chairman of China’s state-run oil company Sinopec, met in Beijing to strengthen business ties, SK Innovation, the company’s petrochemical arm, said on Friday.
The company has been stressing the so-called China Insider strategy, which aims to make the China the second home base for the group after Korea. As domestic markets become saturated, Chey is pushing petrochemical and telecom business to China.
The group has tried to penetrate the Chinese petrochemical market by establishing Sinopec-SK Wuhan Petrochemical, a joint venture of SK Global Chemical and Sinopec, in Wuhan, Hubei Province, which began operations in 2014. SK invested 3.3 trillion won ($3 billion) into the ethylene manufacturing facility, which produces 2.5 million tons of petrochemical products annually. In the first year of operation the facility made 147.7 billion won in profit. Last year, it posted a profit of more than 400 billion won.
“Based on our experience of successfully managing Sinopec-SK Wuhan Petrochemical we hope the two companies’ business cooperation can grow deeper and broader,” Chey said. While the existing partnership has concentrated on the petrochemical business, this week’s meeting was expected to widen the scope of cooperation into oil and lubricants, the company said in a statement.
SK Group’s petrochemical subsidiaries include SK Innovation, SK Energy, SK Global Chemical and SK Lubricants. These companies also have been examining their Chinese businesses.
SK Innovation Vice Chairman Chung Chul-kil visited Shanghai, home of SK Global Chemical’s Chinese headquarters, and Sinopec-SK Wuhan Petrochemical earlier this year to promote growth in China. SK Global Chemical also established strategic divisions dedicated to penetrating the Chinese market.
“SK Innovation will focus on discovering companies with unique technologies to produce high value-added chemical products, especially in China, and expand business via M&A and global partnering,” an SK spokesperson said.
BY KIM JEE-HEE [firstname.lastname@example.org]