“The transition to electric cars is an ‘expected future’ that won’t change. Let’s overcome the current challenges with SK’s unique spirit of challenge.”
Park Sang-kyu, the CEO of SK Innovation, recently emphasized the value of the company’s mid- to long-term business strategy, ‘Carbon to Green (From Carbon to Environmentally Friendly),’ during a relay workshop with employees. His expression of determination to continue investing in SK On, despite the crisis among members due to the poor performance of the secondary battery subsidiary, is interpreted as a signal.
According to SK Innovation, during the session with employees, they stated, “Since earlier this year, we have been conducting portfolio reviews to enhance the competitiveness of SK Innovation affiliates, and once the policies are established, we will share them.” They also conveyed a message that with the confidence in the strategic direction and the technological capabilities and talents within SK Innovation, there is nothing that cannot be achieved if all employees are united.
Park’s communication efforts are analyzed as a move to express a commitment to continued investment in struggling subsidiaries related to secondary batteries, such as SK On and SK iET, amidst the downturn in demand due to the electric car market’s pre-mass-market slowdown.
Battery manufacturer SK On recorded an operating loss of 581.8 billion won on a consolidated basis last year. SK iET, which produces battery materials such as separators, is expected to see an operating profit of 3.1 billion won in the first quarter of this year, an 88% decrease from the previous quarter’s 26.9 billion won.
At a joint training session for SK Innovation team leaders, it was acknowledged that “the recent downturn in demand, worsened global business environment, and other factors mean that the electric car market situation is not favorable.” However, it was emphasized that “despite these circumstances, the shift to electric cars is an expected future that won’t change, especially considering the global climate crisis.”
Furthermore, it was added, “Especially in times like these, SK On needs to enhance competitiveness in five areas: price, technological capabilities, quality, customer management, and a good corporate culture with excellent talent.”
It was also stated, “Green tech businesses such as SK On and SK iET are like facing an uphill climb around the 35 km mark in a marathon, and since other competitors are in similar situations, this could be an opportunity for us.” If efforts to strengthen internal capabilities are focused even during the electric car downturn, it can firmly establish the secondary battery business, which is being nurtured as a future growth engine.
CEO Park stated that the vision of ‘Carbon to Green,’ presented as SK Innovation’s future direction in 2021, remains unwavering. He emphasized, “Corporate management requires investment in the future, not just for 2-3 years, but looking 5-10 years ahead,” and urged employees to face the current challenges with enthusiasm and courage, considering that even the mainstay businesses of the SK Group, such as petroleum and chemicals, have gone through difficult times and that ‘Carbon to Green’ also requires accumulated time.
SK Management System (SKMS), established by the late SK Group Chairman Chey Jong-hyun, was also emphasized. CEO Park pledged, “Chairman Chey persevered for over 10 years in the face of skepticism toward the vertical integration from fiber to petroleum,” and expressed determination, “Just as the SK Group has achieved greater results in crises based on SKMS, as the top management of SK Innovation, we will definitely produce results.”
