SK’s gas unit to sell production facility for $809 mn

South Korean conglomerate SK Group’s industrial gas-making unit is set to sell a local production facility for about 1 trillion won ($809 million) to invest in new businesses such as advanced materials.

SK Materials Airplus Inc., wholly owned by the group’s investment and holding company SK Inc., decided to unload a factory that supplies industrial gas via pipeline to SK Hynix’s DRAM chip plant in Icheon, Gyeonggi Province, said investment banking industry sources on Tuesday.

The producer of industrial and medical gas has narrowed bidders for the facility's sale to three candidates -- KKR, Brookfield and Macquarie -- according to the sources.

SK Materials Airplus is expected to sell an industrial gas production facility in Cheongju, about 110 kilometers southeast of Seoul for about 500 billion won, industry sources said. The facility also supplies industrial gas to SK Hynix Inc. through special trailers.

The company aims to use the proceeds from sales of those assets for new businesses, including advanced materials, with plans to receive gas produced by the facilities only, without owning its own factories.

Last year, SK Materials Airplus sold another facility in the Icheon complex to a local company for 58 billion won.

STABLE BUSINESS

The company decomposes oxygen, nitrogen and argon through air separation devices and delivers them to customers. Its industrial gas is essential for manufacturing processes in the semiconductor, display and solar cell industries. Recent growth in the global semiconductor industry has raised industrial gas demand.

SK Materials Airplus has been generating stable sales as its key customers are group affiliates such as SK Hynix, SK Energy and SKC, although the industrial gas market is often volatile in line with business conditions of other industries such as semiconductors and displays.

SK Materials Airplus is recognized for its competitive strength with its own plant design technology even as it is regarded as a relative latecomer in the industry.

The company, formerly known as SKC Air Gas, was established as a joint venture between SKC and Japan’s Taiyo Nippon Sanso Corp. in 2007. The JV became a wholly owned subsidiary of SK Materials that bought SKC’s stake in 2016 and Taiyo’s shares in 2018. Last year, SK Inc. took over SK Materials Holdings, which owns SK Materials Airplus.

Write to Si-Eun Park at seeker@hankyung.com
Jongwoo Cheon edited this article.