SK Innovation to Establish First Overseas Investment Corporation in the US... Investing 460 Billion KRW This Year Alone

Expansion of Eco-Friendly Portfolio
Group Holding Company SK Inc. Provides Investment Support
Subsidiaries SK Energy and SK On Join Efforts

[Asia Economy Reporter Choi Seoyoon] SK Innovation is establishing its first overseas investment corporation in the United States. This move aims to explore new business opportunities in real-time across all sectors related to eco-friendly energy locally. In addition to setting up the corporation, SK Innovation is actively investing in local companies. Since the beginning of this year, the investment amount poured into new business sectors in the U.S. is approximately 460 billion KRW (including subsidiaries). When combined with joint investments with SK Inc., the total reaches 980 billion KRW, approaching 1 trillion KRW. This is seen as an acceleration of SK Group Chairman Chey Tae-won's U.S. investment plan, who declared, "Of the $52 billion (about 68 trillion KRW) to be invested in the U.S. by 2030, half will be focused on eco-friendly sectors such as electric vehicle batteries and energy solutions."

According to industry sources on the 18th, SK Innovation acquired 100% equity of the U.S.-based investment corporation ‘SK Innovation America’ by investing $77 million (about 101.3 billion KRW) on the 9th. Following the board resolution to establish the corporation in March, SK Innovation has completed the equity acquisition and is now proceeding with the official paperwork for establishing the corporation in the U.S. Once established, it will become SK Innovation’s first overseas investment corporation.

An SK Innovation official stated, "There are many startups in the U.S. with advanced technologies related to energy solutions or utilizing future eco-friendly energy sources such as ammonia, providing abundant business opportunities." He added, "The investment corporation is still in its initial establishment phase, so specific business plans are undecided, and a CEO has not yet been appointed."

Following Vice Chairman Kim Joon’s directive to expand the business portfolio and be recognized as an ‘eco-friendly energy and materials company,’ not only SK Innovation but also its subsidiaries focused on refining and chemicals are moving swiftly. On the 29th of last month, SK Energy, a wholly-owned subsidiary of SK Innovation, established a U.S. investment corporation called the ‘Energy Solution Group’ with an investment of $81 million (about 106.6 billion KRW).

The CEO is Vice President Lee Jae-ho, who joined SK Energy in June last year. At SK Energy, he served as an executive in the Solution and Platform Promotion Division, overseeing the mobility platform business TTS (Total Transportation Service). Prior to that, at Kakao Mobility, he managed various future new business projects such as autonomous driving services, data business, and platform business for three years starting in 2018. He is expected to focus on discovering new eco-friendly energy platform businesses in the U.S. within the Energy Solution Group.

Local equity investments to build an eco-friendly portfolio are also active. In June, SK Innovation invested $30 million (about 3.95 billion KRW) in Amogy, a U.S. ammonia-based fuel cell system specialist, and last month invested $20 million (about 2.63 billion KRW) in Fulcrum BioEnergy, a waste gasification company in the U.S.

The group holding company SK Inc. is also providing investment support. At the end of last year, SK Inc. co-invested $50 million (about 6.55 billion KRW) with a domestic private equity fund in Fulcrum, in which SK Innovation had invested. In May, SK Inc. and SK Innovation jointly invested $250 million (about 328 billion KRW) in TerraPower, a U.S. next-generation small modular reactor (SMR) company.

Recently, SK Energy and SK Innovation jointly acquired management rights of ‘Atom Power,’ a U.S. company engaged in energy solutions and electric vehicle (EV) charging business, for $150 million (about 200 billion KRW). The electric vehicle battery business, a key part of the eco-friendly portfolio, is also expanding. SK On invested $139 million (about 182.9 billion KRW) to acquire a 50% stake in the joint venture with Ford, ‘BlueOvalSK,’ which was launched on the 13th of last month. Over six years until December 2027, Ford and SK On will each invest 5.1175 trillion KRW to build one battery plant in Tennessee and two in Kentucky. Upon completion, the total annual battery cell production capacity will be 129 GWh. Currently, SK On owns its 1st and 2nd plants (21.5 GWh) in Georgia, and with the completion of BlueOvalSK plants, the annual battery cell production capacity will increase to 150 GWh.

Kim Jun, Vice Chairman of SK Innovation, is presenting the company's core strategy, "From Carbon to Green," at the 'Story Day' held in July last year. Photo by SK Innovation