South Korea’s SK Group is accelerating efforts to expand its presence in China by promoting joint projects with local enterprises that are familiar with the world’s second-largest economy.

According to SK Innovation Co., the holding company of SK Group, on Friday, the conglomerate’s chairman Chey Tae-won met with Wang Yupu, chairman of China Petrochemical Corporation (Sinopec Group) in Beijing on Thursday and discussed various measures to enhance their business ties. Key executives of SK Innovation affiliates including Kim Joon, president of SK Energy Co., Kim Hyung-geon, president of SK Global Chemical Co., and Lee Kih-wa, president of SK Lubricants Co. accompanied the group chairman.

It is the first time in four years for Chey to meet with the head of Sinopec Group since November 2012 when he met with Wang Tianpu, former president of Sinopec, in Beijing. Back then, Chey hammered out a deal with the China’s largest state-run energy company in establishing Wuhan Ethylene Corp., a joint venture engaged in the manufacturing of ethylene - a project that has been dragging on for six years. Under the deal, Sinopec and SK Global Chemical jointly invested 3.3 trillion won ($3 billion) to build an ethylene producing facility in Wuhan, the capital city of Hubei Province. Since 2014, the joint plant has been producing 2.5 million tons of petrochemical goods annually.

During the meeting, Chey was quoted saying to Chairman Wang of Sinopec that he expects their latest successful partnership to further enhance their business ties, according to the company.

Chey and Wang shared views on numerous ways to expand their business relationships in not only the petrochemical sector but also in oil refining, lubricants, and lubricating oil industries. Sinopec, in particular, is known to have expressed interest in cooperating with SK Group in obtaining the knowhow in oil refining and petrochemical facility operations as well as safety and environment technologies held by SK Innovation affiliates.

In the recent years, SK Group has been making all-out efforts to promote its affiliates’ business in China based on the so-called “China Insider” strategy introduced by Chairman Chey. The strategy was designed to encourage the group companies to become fully immersed in the Chinese market as a local player not as a foreign entity.

In line with the strategy, Chung Chul-khil, vice chairman of SK Innovation, visited SK Global Chemical’s China office in Shanghai early this year and also the office of SK Global Chemical-Sinopec joint venture to emphasize employees the importance of China to the group businesses.

SK Global Chemical has also set up a strategy planning division and global growth promotion office in China, and has allocated key executives including its president Kim Hyung-geon in China. SK Innovation aims to promote additional joint ventures in China through mergers and acquisitions or global partnerships with local petrochemical companies with high value and distinctive technology.

By Hong Jong-sung

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]