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Batteries

SK Innovation officially launches battery, E&P split-offs

The business separation aims to strengthen each new company’s competitiveness and pursue green growth

By Oct 01, 2021 (Gmt+09:00)

Logos of the separated entities
Logos of the separated entities

South Korea’s SK Innovation Co. on Friday officially launched its battery and petroleum exploration and production businesses as separate entities in a corporate restructuring aimed at sustainable growth.

Its new battery company, SK On, and the E&P company, SK Earthon, will be led by Jee Dong-seob and Myeong Seong, respectively, who currently run these businesses at SK Innovation.

The separation plan was approved at SK Innovation’s shareholders’ meeting in mid-September.

The two separate entities will be wholly owned by SK Innovation.

“Through the split-off, we aim to strengthen each new company’s competitiveness and pursue quality growth,” SK Innovation Chief Executive Kim Jun said at the shareholders’ meeting.

SK On Chief Executive Jee, who earned a bachelor’s degree in physics and a master’s in economics at Seoul National University, joined SK Innovation in 1990. He previously served as head of the strategy and planning office at SK Telecom Co. and the chief executive of SK Lubricants Co.

SK On CEO Jee Dong-seob
SK On CEO Jee Dong-seob

He took the helm of SK Innovation’s battery business in December 2019.

On Friday, Jee reiterated the company’s goal to become the world’s top battery maker by 2030.

To achieve that goal, SK On plans to increase its battery production capacity from the current 40 gigawatt-hours (GWh) to 220 GWh by 2025 and over 500 GWh by 2030.

SK Innovation has said it currently has a battery order backlog of 1,000 GWh worth 130 trillion won ($110 billion).

The new battery company said it will be responsible for medium-to-large size electric vehicle batteries, battery as a service (BaaS) and energy storage system (ESS) business.

As part of SK’s efforts to expand its US presence, it said last month the company and Ford Co. will invest a combined $11.4 billion to build an assembly and battery complex and two additional battery factories in the US.

The investment is double the amount announced in May.

SK Earthon CEO Myeong Seong
SK Earthon CEO Myeong Seong

CARBON TO GREEN STRATEGY

SK Earthon CEO Myeong is an E&P veteran with some 26 years of work experience in the oil business.

Capitalizing on SK’s long-accumulated experience and competency in the oil exploration business, he said the new company will build an environmentally friendly green portfolio to minimize carbon emissions.

SK Earthon will also expand its carbon capture and storage (CCS) business, he said.

SK Innovation’s corporate restructuring comes as it aims to transform into an eco-friendly company by investing 30 trillion won ($26.5 billion) in green projects by 2025.

SK Innovation's corporate structure after split-offs of battery and E&P businesses
SK Innovation's corporate structure after split-offs of battery and E&P businesses

The energy and chemical subsidiary of the country’s third-largest conglomerate, SK Group, said in July its green projects will account for 70% of its entire business portfolio by 2025 from the current 30% to reduce its carbon footprint and create new sustainable business opportunities.

SK Innovation, which owns Korea’s largest refiner SK Energy, currently generates most of its revenue and profit from the exploration and petroleum (E&P) business.

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

In-Soo Nam edited this article.

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