SK Innovation Co., the refining and petrochemical arm of SK Group, is set to take up the challenge from structural economic slowdown and unprecedented business environment at home and abroad through “preemptive” restructuring and aggressive expansionary campaigns through mergers and acquisitions, its Vice Chairman Chung Chul-khil said in a press conference on Wednesday.

He met the press after convening a meeting of chief executives of energy-related subsidiaries of SK Group and senior officials from SK Innovation.

He said companies would have to brace up for the “New Normal”, the conditions in the business and economy referred by economists and policymakers following the global financial crisis of 2008 such as the lengthy slowdown with limited and sporadic recoveries.

Chung said the company would have to come up with a strategic plan to survive in the structurally slow-moving economy.

One strategy would be “global partnering’, or joint ventures with overseas counterparts as its own research and development resources would not be enough to keep the company competitive.

The main target would be the China market through mergers and acquisitions and partnering up with foreign or Chinese enterprises to establish bigger presence in China, he said.

The company is considering creating a joint-venture electric battery plant in China and expanding lithium-ion battery separator factory to become the largest supplier of the key component in secondary battery.

SK Innovation formed a joint venture Beijing BESK Technology with Beijing Automotive Group and Beijing Electronics Holdings and has been manufacturing EV batteries from China. Chung said he was not worried about lagging behind local rivals LG Chem and Samsung SDI in the field of EV battery. “We’ve just passed 1 kilometer of a 41-km-long marathon,” he said referring to the competition in the recharging technology.

On the energy front, the company is mulling investment in oil explorations in China and Vietnam and stake in a U.S. shale gas field. But the shale gas investment needs more study due to current murky business outlook, he said.

By Chung wook

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