SK Energy forms China asphalt joint ventureSK Energy established a joint venture with a Chinese company to expand business in the world’s largest asphalt market.
The SK Innovation subsidiary formed the venture with Zhejiang Baoying Materials Group, a Chinese distributor of asphalt. Named Zhejiang SK Energy Baoying Group, the new company officially opened its office in Hangzhou, China, on Friday.
SK Energy invested 450 million yuan ($64 million) in the entity, giving it a 49 percent stake. SK and Zhejiang Baoying will manage the venture together, the local company said. The relations between the two started in 1996 when SK first started exporting asphalt to the Chinese company.
On Friday, more than 200 executives from the two companies and regional government officials got together in Hangzhou to celebrate the new venture’s establishment.
“With the recent investment, we lay the grounds to boost our asphalt business in China, the world’s largest market,” SK Energy said in a statement. With the joint venture, SK will be able to expand its business in terms of sourcing, the production of polymer modified asphalt and distribution with the help of Zhejiang Baoying’s network in China.
SK Energy expects the deal will boost annual asphalt supply to the country from 1 million tons last year to 2 million tons by 2023 and 3 million tons by 2029. China’s asphalt market accounts for 30 percent of the global market and is expected to grow 3 percent annually.
The company added its ambition is to become one of the country’s top three asphalt suppliers, behind Sinopec and CNPC and eventually list on an exchange in China.
BY SONG KYOUNG-SON [email@example.com]
More in Industry
Transport Ministry permits 10 more flights to China
Government-led sales campaign ends Sunday
Traffic increased to pre-coronavirus levels in May