Over 1 Trillion Won Invested in Copolyester Expansion and More
White Bio Value Chain Also Expanded
Jeon Gwang-hyun, President of SK Chemicals, is announcing the eco-transition strategy including the plastic circular ecosystem. Photo by SK Chemicals
[Asia Economy Reporter Choi Seoyoon] Jeon Gwanghyun, President of SK Chemicals, stated, "By 2030, we aim to achieve sales of 2.6 trillion KRW in the green materials business," adding, "We will invest more than 1 trillion KRW in expanding copolyester (fiber made from eco-friendly materials) production capacity, establishing a global infrastructure for chemical recycling, and developing new bio-materials."
On the 7th, at SK Chemicals headquarters in Bundang-gu, Seongnam, Gyeonggi Province, Jeon made these remarks during the third-quarter earnings announcement and an online corporate briefing for institutional investors and analysts, mentioning the 'Eco Transition' strategy.
Eco Transition is a management strategy to transform the chemical business portfolio through chemical recycling, bio-materials, and green energy businesses, and to expand the market and customer base globally based on this.
The goal is to become the world's number one copolyester producer by 2030. Copolyester can be safely used without concerns about bisphenol A, a type of environmental hormone.
President Jeon said, "We plan to increase SK Chemicals' core business copolyester production capacity by more than 50% by 2030," adding, "We will determine the optimal timing and location by comprehensively considering the global copolyester market situation and various external environments." To this end, in April, SK Chemicals decided to invest in expanding the production capacity of cyclohexanedimethanol (CHDM), a key raw material for copolyester production, by 25%, aiming for operation in 2024, and is focusing on plant expansion.
SK Chemicals is also reviewing securing overseas production bases to build a global infrastructure for chemical recycling alongside expanding copolyester production capacity. President Jeon said, "To respond to the rapidly increasing demand in the recycled plastics market worldwide, we aim to achieve 100% recycled plastic sales ratio by 2030," and added, "We will also strive to establish a circular ecosystem for recycled plastics domestically and internationally."
Furthermore, SK Chemicals is promoting the expansion of the white bio business value chain as a new growth engine in green materials. Bio-based plastics can address global warming caused by carbon dioxide emissions and the depletion of petroleum resources, and have the advantage of potentially replacing the existing petroleum-derived plastics market, making it a technology expected to have significant economic ripple effects.
President Jeon explained, "Starting with the production of bio polyol Ecotrion, which began operation this year, we plan to expand new bio-material businesses such as highly flexible biodegradable materials and bio-elastomer materials."
SK Chemicals Pangyo Headquarters. Photo by SK Chemicals
Through the transition to green energy, SK Chemicals expects to achieve net-zero greenhouse gas emissions by 2040, and additional profits from carbon credits earned through greenhouse gas reduction performance secured by the green materials business.
The company also plans to steadily enhance shareholder value. Last year, it announced medium-term dividend policies and other shareholder return policies, continuing various efforts such as bonus stock issuance, interim dividends, and share buybacks and cancellations. It plans to prepare more specific measures to enhance shareholder value to increase predictability regarding the scale of shareholder returns for investors.
President Jeon stated, "Using investment funds prepared based on existing assets and solid business profits, we will implement the Eco Transition strategy to grow chemical business sales from about 900 billion KRW last year to 1.5 trillion KRW in 2025 and 2.6 trillion KRW by 2030," adding, "We will strive to protect shareholder rights effectively and enhance shareholder value alongside company growth."
SK Chemicals announced on the same day that its third-quarter standalone sales were 326.5 billion KRW, and operating profit was 34.5 billion KRW, up 13% and 96% respectively from the previous year. Despite uncertain economic conditions such as the Russia-Ukraine war and global inflation, the company explained that it posted solid results in the third quarter due to the expanded sales of high value-added copolyester products.
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