SK Group Looks 30 Years Ahead... Generational 'Persistence' Investment

[Asia Economy Reporters Sohyeon Park, Hyunui Cho] As SK Group's bio business achieves visible results as a future new growth engine, the 'steadfast' investments made over two generations by the late Chairman Choi Jong-hyun and Chairman Choi Tae-won, who have supported the business for decades, are also drawing attention. In Korea, where the bio sector, including new drug development, was virtually a barren land, this success is seen as the result of ownership that enables proactive investment in the distant future rather than short-term gains.

Chairman Choi Jong-hyun established the Pharmaceutical Business Division within SK Chemical (then Sunkyung Industry) in 1987 and built the SK㈜ Bio Research Center in New Jersey, USA, in 1993. At that time, SK was committed to vertical integration of its business under the slogan "from petroleum to textiles," securing all related lines from raw petroleum to the final product, polyester fiber. However, recognizing the limitations of the textile business from a sustainability perspective, Chairman Choi ensured that the chemical business capabilities accumulated through vertical integration would extend into the life sciences sector.

Continuing Chairman Choi Jong-hyun's vision, Chairman Choi Tae-won, who began leading SK Group's management in 1998, regarded the bio and pharmaceutical business as one of the new growth portfolios and never ceased investing. In 2002, Chairman Choi Tae-won set a goal to make the bio business one of the group's core pillars after 2030 and presented a vision to develop a global bio-pharmaceutical company with independent business capabilities by integrating the entire value chain from new drug development to pharmaceutical production and marketing. Accordingly, the organization, which had been divided into five teams including life science research and pharmaceutical development, was consolidated to focus on new drug research, and a new drug research institute was established in China to secure various pharmaceutical ingredients and technologies.

Following Chairman Choi Tae-won's determination, SK㈜ directly managed the new drug development organization even when SK Group transitioned to a holding company system in 2007. In 2011, the new drug development organization was spun off into SK Biopharm. In 2015, SK Biopharm separated its active pharmaceutical ingredient production business to establish SK Biotech. This year, SK Pharmteco, an integrated corporation combining pharmaceutical production entities including SK Biotech, was established, achieving notable results in the US COVID-19 response business, and SK Biopharm is also preparing for its IPO scheduled for July. An SK Group official stated, "In the bio industry, above all, the foresight and continuous investment of decision-makers are crucial," adding, "Alongside batteries, semiconductors, and 5G, the time has come to reap tangible harvests in the bio sector."

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