SK Group’s Key Meeting in Beijing

Chairman Chey stresses technology as key for the group’s future growth, SK E&C clinches Abu Dhabi oil refinery project worth $2 Bln

SK Engineering and Construction Co. clinched an oil refinery plant construction project worth $2.117 billion from the Abu Dhabi National Oil Co. in the United Arab Emirates on a turnkey basis, the company announced Nov. 4.
The oil refinery will be built at Ruwais, located some 250 km from Abu Dhabi, as part of the expansion project of the Ruwais oil refinery, involving the construction of a CDU, a crude oil refining facility, and peripheral installations of the key facility of an oil refinery with the capacity to produce 400,000 barrels of oil daily, the company said. The project is to be completed in 2014, part of the $10 billion super-sized project consisting of seven stages.
SK E&C won the first stage of the project in an open bid, bringing the total for projects the company has won in the UAE to over $3 billion in the first half of the year. It clinched a project to build a multi-industrial complex in Abu Dhabi in March amounting to $242 million, the company said. The company also won a gas pressure plant construction project worth $820 million in Abu Dhabi in the same month.
SK E&C picked up nine projects in such countries as Saudi Arabia, Ecuador, Vietnam and Singapore ― seven countries in all, not counting the UAE, from early this year, valued at $4.718 billion, the company said.
In the meantime, Chairman Chey Tae-won of SK Group presided over the group’s strategy meeting in Beijing from Nov. 2-4, taking up such matters as searching for new growth engines good enough to lead the world market.
The CEOs’ meeting held at SK Tower in Beijing discussed such issues as strengthening the group’s core competitive power, strengthening the strategies to find new growth engines, and those for globalization, and focused on finding ways to make the group’s growth sustainable.
The group’s affiliate CEOs at the meeting agreed to reform the group’s business structure led by technologies, recalling that the group made CDMA commercially operational for the first time in the world in 1996 to set up a base for its global advancement, and affiliates should get together to develop new technologies so that the group might make a further jump in growth to become a global major.
Chairman Chey said the group has little room for further growth at home as its rivals are catching up with them in terms of technology, and are challenged with great competition abroad as emerging countries try to compete with them, as well as global technology fusion trends. The chairman said the group should make new changes in its strategy to make technologies the center of its growth strategies.
He also said the globalization strategy centered on China declared in the Hangzhou meeting needs changes. He said the group can’t sell its products that are successful in Korea in Chinese markets, as products that can satisfy the style and preferences of local Chinese can only be sold in China. “We can pick out business models and commodities and develop them from Chinese points of view and we need to approach them with methods tailored to Chinese demand and markets,” Chey said.
Earlier in the year, SK Group had decided to plow 5.7 trillion won into R&D activities by 2012 to search for new growth engines to help boost Korea’s industrial competitiveness in the world.
Each SK affiliate is due to come up with its future vision very soon in line with the decision reached at the CEO meeting in Beijing and in compliance with the details of the R&D budgets allocated for the group’s main sectors of business, telecom and energy.
SK officials said they did not touch on details of the group’s key strategies, but agreed on the importance of R&D activities to search for new technologies that will help sustain the group’s future growth. With the group meeting ending with a stress on searching for new growth engines and R&D activities, the group will now focus on the two sectors of the operations, they said.
Kwon Oh-ryong, head of the Brand Management Sector of the group, said, “You have to succeed in China, whose culture is similar to that of Korea and is also a land of opportunity. If you can’t succeed in China, you can’t succeed anywhere.”
Key executives attending the Beijing meeting included Vice Chairman Kim Chang-keun of SK Chemical, Vice Chairman Shin Heon-chul of SK Energy, Vice Chairman Kim Shin-bae of SK C&C, Vice Chairman Yoon Seok-kyong of SK Construction, President Koo Cha-young of SK Energy, and President Lee Chang-kyu of SK Networks, among others, totaling 30 key executives of the group. nw

Chairman Chey Tae-won presides over SK Group’s strategy meeting at SK Tower in Beijing, China, Nov. 2-4.