460 Billion KRW Investment in the US This Year
SK Innovation America
Acquires 100% Stake for 101.3 Billion KRW
Holding Company SK Inc. Provides Investment Support
Energy Solution Company Atom Power
Joint Investment with SK Energy, 50% Each
Establishes SPC 'Energy Solution Group'
Kim Jun, Vice Chairman of SK Innovation, introduced SK Innovation's direction for building an eco-friendly business portfolio and its commitment to business model innovation during the keynote speech at the 'SK Innovation Global Forum' held on June 11 (local time) in San Jose, California, USA. Photo by SK Innovation
[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, equity investments in local companies are also active. 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. Analysts say that SK Group Chairman Chey Tae-won’s U.S. investment plan, which declared, "By 2030, half of the $52 billion (about 68 trillion KRW) to be invested in the U.S. will focus on eco-friendly sectors such as electric vehicle batteries and energy solutions," is gaining momentum.
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, the equity acquisition has been completed, and the company is now proceeding with the 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 said, "There are many startups in the U.S. with high technological capabilities related to energy solutions or utilizing future eco-friendly energy sources such as ammonia, so there are abundant business opportunities." He added, "The investment corporation is just being established, so specific business plans are not yet finalized, and a CEO has not been appointed."
Following the directive from SK Innovation Vice Chairman Kim Joon to be recognized as an ‘eco-friendly energy and materials company’ through portfolio expansion, 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 100% subsidiary of SK Innovation, established a special purpose company (SPC) to lead investment projects in U.S. energy solutions. This is the ‘Energy Solution Group,’ into which $81 million (about 106.6 billion KRW) was invested. SK Inc. and SK Energy each hold 50% equity.
The purpose of establishing the Energy Solution Group was to acquire the U.S. energy solution specialist company Atom Power, and on the 17th, the acquisition contract for management rights was signed, making it the largest shareholder of Atom Power. The acquisition scale is $150 million (about 200 billion KRW).
Founded in 2014, Atom Power develops ‘solid-state circuit breaker (a circuit breaker controlled by power semiconductors)’ technology and operates energy solution and electric vehicle (EV) charging businesses in the U.S. The Energy Solution Group plans to explore an integrated future energy business by linking Atom Power’s EV charger development capabilities with eco-friendly mobility and energy solutions.
This will be led by Lee Jae-ho, Vice President of SK Energy, who is the CEO of the Energy Solution Group. Vice President Lee joined SK Energy in June last year and was in charge of the mobility platform business TTS (Total Transportation Service) as an executive of the Solutions and Platform Promotion Division at SK Energy. Prior to that, at Kakao Mobility, he was responsible for various future new business projects such as autonomous driving services, data business, and platform business for three years starting in 2018.
In May, Amogy conducted a test run of a tractor equipped with an ammonia-based fuel cell system. Photo by SK Innovation
Equity investments in local companies to build an eco-friendly portfolio are also active. In June, SK Innovation invested $30 million (about 39.5 billion KRW) in Amogy, a U.S. ammonia-based fuel cell system specialist, and last month invested $20 million (about 26.3 billion KRW) in Fulcrum BioEnergy, a waste gasification company in the U.S.
The group holding company SK Inc. also supports investment efforts. At the end of last year, SK Inc. co-invested $50 million (about 65.5 billion KRW) with a domestic private equity fund in Fulcrum, in which SK Innovation had invested, and in May, SK Inc. and SK Innovation jointly made a $250 million (about 328 billion KRW) investment in TerraPower, a U.S. next-generation small modular reactor (SMR) company.
The electric vehicle battery business, a key pillar of the eco-friendly portfolio, is also expanding. SK On invested $139 million (about 182.9 billion KRW) to acquire 50% equity 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 once BlueOvalSK’s plants are completed, the annual battery cell production capacity will increase to 150 GWh.
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