SK Innovation reshuffles units to raise value

SK Innovation Co., South Korea’s top energy company, is reorganizing its subsidiaries to boost their individual values through independent management for potential sales of stakes in them, industry sources said.

SK Incheon Petrochem Co., which handles the hydrogen business of South Korea’s No. 2 conglomerate SK Group, is seeking to establish its own marketing organization, according to industry sources on Wednesday. The wholly owned subsidiary of SK Innovation has been selling petrochemical products through SK Geo Centric Co., formerly SK Global Chemical, in which the group’s intermediate holding company holds a 100% stake.

SK IE Technology Co., a global top lithium-ion battery separator, has recently taken over research and development (R&D) staff and assets from SK Innovation, which had a 61.2% stake in the company as of end-2023, those sources said.

The move came after the group’s top executives asked subsidiaries to increase their corporate values through their own measures. SK Innovation, which has 26 subsidiaries and affiliates including the world’s fifth-largest electric battery maker SK On Co., has been urging the subsidiary heads to take measures to boost competitiveness, according to the sources.

Investment banking industry sources said the group may seek sales of stakes in its subsidiaries and affiliates to raise money from investors after ramping up their enterprise values.

TO REORGANIZE FURTHER


“We had a principle to maximize efficiency by concentrating R&D and sales networks under one organization,” said an SK Innovation official. “We will change this stance to strengthen the competitiveness of each subsidiary from now on.”

SK Incheon produces by-product hydrogen generated during production processes at the petroleum or chemical factories.

SK E&S Co., the group’s energy unit, uses the by-product hydrogen for its liquefied hydrogen plant slated to start operations in the first half. SK E&S plans to hydrogen fuels for commercial vehicles such as trucks and buses through the world’s largest liquefied facility with an annual capacity of 30,000 tons.

SK IE Technology, split off from SK Innovation in 2019, had relied on SK Innovation for its R&D as its battery separator technology stemmed from existing petrochemical studies.

The battery materials maker needed to strengthen its R&D capabilities to deal with the rapid changes in the cell industry, according to sources.

“SK IE Technology has established itself in the market by developing a separator for lithium-ion batteries for the first time in South Korea, but the market has been quickly changing with low-priced LFP batteries,” said a battery industry source, referring to lithium iron phosphate batteries.

“The company may need an organization specialized in separator research.”

Write to Hyung-Kyu Kim at khk@hankyung.com
 

Jongwoo Cheon edited this article.