Providing Energy Efficiency Solutions
Establishing as a Global Leader by 2040
Park Sang-gyu, President of SK Enmove, is presenting the future vision of ZIC at the ZIC Brand Day held on the 5th at Grand Walkerhill in Gwangjin-gu, Seoul. Photo by SK Enmove
"Will lubricant companies disappear in the electric vehicle era? Not at all. To improve energy efficiency (fuel efficiency of electric vehicles), lubricants are needed for motors and gearboxes, and immersion cooling fluids to control battery heat also require lubricants. SK Enmove will focus on businesses that enable energy to be used longer and more safely."
Park Sang-gyu, President of SK Enmove, stated this on the 5th at the Grand Walkerhill in Gwangjin-gu, Seoul, during the 'ZIC Brand Day,' an event unveiling the future vision of ZIC. President Park aims to expand the lubricant brand ZIC to capture the power efficiency market. Beyond the internal combustion engine oil market, the goal is to leap forward as a global leading company driving the power efficiency market, which is expected to grow to 54 trillion KRW by 2040. About 150 SK Enmove executives and employees, along with media representatives, attended the event.
Launched in 1995 as the first lubricant brand in the domestic refining industry, ZIC plans to provide all fluids related to power efficiency, a core of future energy. Fluids refer to substances encompassing both liquids and gases, characterized by their flowing nature without a fixed shape.
Park Sang-gyu, President of SK Enmove, said, "With the ZIC brand, we will open not only the engine oil market but also the power efficiency market," adding, "We will transform from a premium and leading company in the global lubricant market into a future-oriented enterprise."
Global 'Top Tier' Goal in Electric Vehicle Lubricants and Thermal Management Market by 2040
Since starting its lubricant business in Korea in 1963, SK Enmove has grown into a global lubricant company by leveraging business foresight and technological capabilities. Based on this expertise, SK Enmove plans to enter the power efficiency market through ZIC. Products that enhance power efficiency will be supplied under the name 'ZIC e-FLO' to all areas where electric energy is used, including electric vehicles, data centers, and electric vehicle batteries.
The electric vehicle lubricant market is already becoming visible. By 2040, electric vehicles are expected to account for 48% of the total number of vehicles, and the electric vehicle lubricant market is anticipated to grow to 12 trillion KRW by 2040 (according to Bloomberg New Energy Finance (BNEF) 2022 data).
SK Enmove plans to become a global top-tier player in the electric vehicle lubricant market by 2040, leveraging raw material competitiveness and technological prowess. Since there are no industrial standards for electric vehicle lubricants, building a track record of product supply to gain customer trust is crucial. SK Enmove has been developing and supplying electric vehicle lubricants since 2013 and holds raw material competitiveness with a 40% market share in Group III premium base oils, the global number one.
President Park emphasized, "It is premature to think that lubricant demand will decline in the electric vehicle era. Electric vehicles require dedicated lubricants to cool motors and reduce gear friction resistance to improve energy efficiency. SK Enmove is already leading the electric vehicle lubricant market through Group III base oil raw material competitiveness and advanced technology."
SK Enmove is also proactively targeting thermal management, another future growth area in the power efficiency market. As electricity usage increases and equipment density rises, thermal management to control heat generation and supply power stably is expected to become increasingly important. SK Enmove estimates that the immersion cooling market for thermal management in data centers, energy storage systems (ESS), and electric vehicle batteries will expand from less than 1 trillion KRW in 2020 to 42 trillion KRW by 2040.
Immersion cooling is a next-generation thermal management technology that cools products by directly submerging them in cooling fluids. For data centers, it can improve total power efficiency by about 30% compared to air cooling. SK Enmove aims to establish itself as a global leader in the emerging immersion cooling market by developing thermal management fluids with enhanced cooling efficiency and stability using Group III base oils. Last year, SK Enmove invested 25 million USD in the U.S. immersion cooling system specialist GRC and signed a memorandum of understanding (MOU) with Dell Technologies, a U.S. PC manufacturer and IT solutions company, for technology commercialization.
In addition to data centers, SK Enmove is developing fluids tailored to the characteristics of electric vehicle batteries and ESS thermal management. Furthermore, SK Enmove is attempting to develop refrigerant fluids that help improve heating and cooling performance for electric vehicles.
President Park said, "With the explosive increase in data usage, enhancing power efficiency through thermal management will emerge as a core future business area. Based on SK Enmove's global number one premium base oil competitiveness and R&D capabilities, we will pioneer new markets in immersion cooling and thermal management."
Improving Internal Combustion Engine ZIC... Expanding Market Share in Southeast Asia, Middle East, and South Asia
SK Enmove will continue to strengthen the competitiveness of the existing internal combustion engine ZIC. Although electric vehicles are spreading mainly in Europe and the U.S., demand for internal combustion engine vehicles is still increasing in Southeast Asia, South Asia, and the Middle East. According to the Kline Finished Lubricant report, India's demand for internal combustion engine oil is expected to grow at a compound annual growth rate (CAGR) of 6.6% from 2022 to 2040. SK Enmove plans to explore these non-electrified markets to expand ZIC's market share.
This market share expansion strategy is supported by the competitiveness of premium low-viscosity engine oils using Group III base oils. SK Enmove has been selling low-viscosity engine oils that combine fuel efficiency improvement and engine protection since 2008. With global environmental regulations tightening, demand for premium low-viscosity engine oils is expected to increase. The Kline report forecasts that demand for Group III or higher base oils, which are raw materials for low-viscosity engine oils, will increase by about 12.7% in 2040 compared to 2020.
Last year, SK Enmove changed its company name from Lubricants to SK Enmove and introduced a new identity as an 'Energy Saving Company.' This was to expand business areas and promote future businesses by enhancing fuel efficiency in existing businesses and electrical efficiency in new businesses.
President Park said, "Since the lubricant business was spun off in 2009, SK Enmove has been a profitable company for 14 years, playing a role in enabling energy to be used longer and more safely in daily life. This is energy efficiency, and we will be recognized globally for our value as an energy efficiency company that improves not only fuel efficiency but also electrical efficiency in the future."
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