 |
| SK Innovation CEO Kim Jun speaks about the company's eco-friendly transition at an event held July 1. Courtesy of SK Innovation |
By Kim Bo-eun
SK Innovation (SKI) said Wednesday that it will separate its battery and petroleum development divisions into two new entities in October.
The spin-off is aimed at pushing for a successful initial public offering (IPO) of the battery unit by heightening the expertise of the business and improving its corporate value. The specifics regarding the IPO have yet to be revealed.
"We plan for the new battery affiliate to become the third largest player in the global electric vehicle (EV) battery market in 2022, based on (annual) sales volume," SK Innovation's head of strategy Kim Cheol-joong told investors in an earnings call for the second quarter.
SKI is the world's sixth largest EV battery maker, according to SNE Research. The company was late in entering the market, but is rapidly catching up with its chief rivals. SKI said in July its battery business has over 1 terawatt in book orders.
The battery maker's global battery production capacity currently stands at 40 gigawatt-hours. SKI is aiming to expand this to 85 gigawatt-hours by 2023, 200 gigawatt-hours by 2025 and 500 gigawatt-hours by 2030.
"The book order of 1 terawatt is equal to 13 trillion won in revenue. There were uncertainties but these have been resolved, and therefore we expect new orders to materialize," SKI's head of battery business support Yoon Hyung-jo said, referring to a dispute with its rival LG Energy Solution (LGES) which was settled earlier this year. Yoon said the company is in talks for orders from new clients.
The SK affiliate expects the battery business will turn to a profit on an annual basis in 2022, and starting 2025 be able to maintain a high single digit operating margin. SKI's battery division's operating loss came to 97.9 billion won for the second quarter of this year.
SKI's spin-off of its fast-growing EV battery business had drawn attention to how the remaining entity would ensure future growth. SKI said it would focus on its role on identifying and developing new green businesses, as a holding company.
"With the battery business as an anchor, we will seek to develop new businesses in the form of expanding the value chain," Kim said. "Along with the battery materials recycling business, we will develop new businesses in the battery materials and next-generation batteries sectors, along with eco-friendly future growth areas."
Kim said "We will continue to offer reasons for investors to invest in SKI."
SKI will retain ownership of the two spun off businesses' issued shares. The SK affiliate held a board meeting Wednesday and approved the move the same day. The company aims to obtain approval at a shareholders meeting, Sept. 16, and have the new entities launch, Oct. 1.
The battery affiliate will handle the mid- to large-size EV batteries and energy storage systems (ESS) sector while the petroleum development unit will cover the carbon capture and storage businesses. SK operates a diverse array of businesses in the fields of energy, petrochemicals, batteries and electronic materials.
SKI said it turned to the black in the second quarter from a year earlier on robust lubricant oil and battery sales. It booked a 415.9 billion won ($362.2 million) net profit in the April-June period, shifting from a loss of 345.8 billion won a year earlier. The company also saw an operating income of 506.5 billion won in the second quarter, from an operating loss of 456.3 billion won a year ago, it said in a regulatory filing.
![[INTERVIEW] Ecolab helps Korean partners profit from ESG management](https://img.koreatimes.co.kr/upload/thumbnailV2/7a924189dbb7426ab12275ba98702309.jpg/dims/resize/178/optimize)
![[INTERVIEW] 'Lifeline for migrant workers in Korea' - Rev. Kim fights for foreign employees' rights](https://img.koreatimes.co.kr/upload/thumbnailV2/8fb4b5d381da49df90276394550f2889.jpg/dims/resize/178/optimize)
![[INTERVIEW] Korea to work with US, Japan to fight climate change](https://img.koreatimes.co.kr/upload/thumbnailV2/800d9054a14b4a0f9cc576366cc1b914.jpg/dims/resize/178/optimize)
![[INTERVIEW] Hip-hop group Uptown returns after 13 years with new lineup](https://img.koreatimes.co.kr/upload/thumbnailV2/0eae35da5e9c40c38cf439e550a2eb3e.jpg/dims/resize/178/optimize)
![[INTERVIEW] ASTRO members aim to shine in musical theater](https://img.koreatimes.co.kr/upload/thumbnailV2/df16760dc50f469d93434f66a069465c.jpg/dims/resize/178/optimize)
