Two Energy Giants Join Hands

SK and SINOPEC sign MOU to expand tie-up in oil, chemical and construction sectors

SK Group and China Petroleum and Chemical Corp.(SINOPEC), the largest energy and chemical company in China, have signed an MOU involving the expansion of cooperative tie up in the areas of petrochemical plants construction, technology exchange and overseas operations to expand their areas of cooperation, the conglomerate said on Dec. 6.
The group said Chairman Chey Tae-won and his counterpart President Wang Tianpu signed the instrument on Dec. 2 in Beijing involving a joint-venture in ethylene production plant with the annual capacity to produce 80,000 tons of the petrochemical product; expanding operations in China; international operations; and technology exchange, among other strategic cooperation
Chairman Chey at the signing said we will be able to create new opportunities for business with the signing of the MOU taking advantage of both parties strength and capabilities.
Chey at the group's CEO Seminar on Oct. 31 stressed partnering and package deals and other various models to accelerate the group's overseas operations.
The group and SINOPEC are partners in building a joint-venture ethylene plant in Hubei Province targeted for completion in 2012 and the plant will also be equipped to produce other petrochemicals including MEG 280,000 tons annually, LLDPE 30,000 tons, HDPE 300,000 tons and 400,000 tons of Polypropylene, among others at its chemical production facilities.
The two partners also will expand cooperative area to construction, along with chemical and oil and petrochemical marketing sector. SK and SINOPEC go back to 2004 to find their first joint venture tie up in the construction of a solvent plant on 50-50 basis in Shanghai in 2004.
The plant turns out 15 kinds of solvents with an environment friendly technology developed by SK.
Managing Director Lee Man-woo in charge of the CPR team, said SK's cooperation with SINOPEC is a representative case for partnering and each affiliate of the group will push for its global operations on such a basis on its own decisions, responsibility and base.
Let's speed up our growth through globalization of our operation, urged Chairman Chey Tae-won of SK Group at a seminar for vice chairmen, CEOs and other key executives of the group numbering 30 on Oct. 26-28 at the SK Academy in Yongin, Gyeonggi Province, the group said recently.
The SK CEO Seminar is held annually during October and November with the participation of top executives of the group to take up such subjects as reviewing the group's performance and setting new strategies for the years ahead. This year, the participants reviewed the global operations and discussed new strategies to improve the overseas operations, especially, in view of uncertainty of the world economy kicked off by the EU debt crisis.
SK officials said the group has been making a steady growth, but Chairman Chey wants to give it an extra momentum, not satisfied with an average rate of growth. They looked at the group's growth rate in the past months and pondered over means to give a little extra push, they said.
The subjects for discussions included the production of batteries for electric cars, the issues in the IT sector and healthcare to find new growth engines and other matters related to diversification of the group's portfolio as SK Telecom is about to make a bid to take over Hynix Semiconductor, especially, the risks associated with the business portfolio expansion.
Chairman Chey called for holding companies with 100 trillion won in assets each in every key regions in the world in 10 years in his statement early this year. He travelled to Australia, South America(Brazil) and other regions including the Middle East rich in natural resources to push globalization of the group's operation.
Attending the annual event included Senior Vice Chairman of SK Holdings Chey Jae-won, Vice Chairman Chey Chang-won of SK Chemical, Vice Chairmen Kim Shin-bae, and Chung Man-won of SK Holdings, Vice Chairman Park Yong-ho of SK China, President Koo Cha-young of SK Innovation, President Lee Chang-kyu of SK Networks, and President Ha Seong-min of SK Telecom, among other key affiliate CEOs. nw

Chairman Chey Tae-won of SK Group, left, shakes hands with President Wang Tianpu of SINOPEC of China after signing an MOU for expanding cooperation between giant energy groups on Dec. 2 in Beijing, China. Photo on courtesy of SK