SK Innovation has chosen battery and chemistry as its future sources of profit and is planning to invest more than $8.89 billion (10 trillion KRW) into these industries.
“Our goal is to secure 30% of market share in markets for electric vehicle batteries by 2025 and become the leading company in this field.” said President Kim Joon of Innovation at a press conference that was held at its company building in Seorin-dong on the 30th. “We are going to invest at least $8.89 billion (10 trillion KRW).”
“If we had been careful in the past about making investments into batteries, now we are going to make investments on full-scale.” said President Kim. “Based on our superiority of our technologies, we are going to secure performance and production cost and make proper investments.”
“Battery markets will reorganize based on oligopolistic system between few companies.” said President Kim. “Our technical skills are at top level globally and we have proven our performance just by providing our products to Hyundai Motor Company and Daimler.”
It is expected that battery markets will grow by 10 to 40 times within 10 years. According to market research companies, it is estimated that global battery markets will grow from 25GWh, 110GWh, and 350 to 1,000GWh in 2016, 2020, and 2025 respectively.
SK Innovation is planning to increase output of its batteries from 1.1GWh, which is based on end of last year, to 10GWh by 2020 and its goal is to secure 30% of market share in global markets for electric vehicle batteries by 2025. It is going to develop batteries that allow electric vehicles to travel 500km with just single charge and batteries that allow electric vehicles to travel 700km with just single charge by 2018 and early 2020 respectively.
“As a top global company, we are going to make investments into R&D and production facilities that are located in South Korea and other countries.” said President Kim. “We will be able to suggest our battery business as a new growth strategy when timing is right.”
“We lowered our debt to equity ratio from $7.11 billion (8 trillion KRW) in 2014 to $800 million (900 billion KRW) by end of last year.” said President Kim. “We are going to secure abilities to borrow additional loans based on our capabilities and we will be able to invest at least $8.89 billion (10 trillion KRW) by 2020.”
SK Innovation is also going to change business structure of its chemical business from a business structure centered on domestic production and basic chemical products to a business structure based on Chinese markets and packaging and automotive chemical products that bring high values.
SK Innovation is going to strengthen its battery and chemical businesses and increase percentage of non-oil refinery sector, which corresponds to 50% of current sales, to 70% in 2020. “We are going to grow as a leading company in energy and chemistry fields.” said President Kim. “We are going to ‘exit’ from areas that we are not successful with and carry out necessary M&A decisively when there are opportunities for investments.”
Staff Reporter Song, Hyeyoung | firstname.lastname@example.org