'Deep Change' Leading the Super Deal

Choi Tae-won: "Only Fundamental Innovation Guarantees Corporate Survival"

① Change of mindset... Winning the contract for COVID-19 vaccine contract manufacturing

② Bold betting... Trillion-won investment in battery business

③ Infinite trust... Challenging affiliate CEOs

[Asia Economy Reporter Park So-yeon] SK Group has succeeded in a mega merger and acquisition (M&A) even amid the COVID-19 pandemic, leading to analysis within and outside the group that Chairman Chey Tae-won’s emphasis on 'Deep Change' has become the management compass.

Since the spread of COVID-19, Chairman Chey has urged SK Group employees not to simply regard the COVID-19 environment as a crisis or succumb to it, but to see it as an opportunity for growth by considering it a suitable counterpart for the 'Deep Change' milestone. This means that the future survival of a company can only be guaranteed through fundamental innovation from the ground up rather than mere technical changes.

In particular, despite the global economic downturn and companies shrinking this year, Chairman Chey has called on the CEOs of each affiliate to take bold challenges. He said, "Deep Change is possible only when there is a change of mindset that recognizes structural limitations hindering corporate growth not as an inevitable given environment but as something to overcome," and added, "Above all, the CEO must take the lead in overcoming structural obstacles."

The attempt and success of a 10 trillion won-scale M&A targeting Intel, the number one competitor in the semiconductor market, was possible because of Chairman Chey’s confidence, encouragement, and infinite trust in the affiliate CEOs. Following the success of the largest M&A in Korean history, surpassing Samsung Electronics’ $8 billion (about 9.36 trillion won) acquisition of Harman in the U.S. in 2017, there was also Chairman Chey’s bold betting and decisive decision-making.

SK Group has a business portfolio perfectly aligned with the mega trends of bio and the Fourth Industrial Revolution, and is proudly expanding its business even amid the COVID-19 crisis. In particular, SK Innovation’s trillion-won battery business investments targeting the U.S. and Chinese markets, and SK Chemicals and SK Inc.’s bio divisions’ contract manufacturing orders for COVID-19 related therapeutics and vaccines stood out during the crisis.

SK Innovation is building a large-scale battery plant in Jackson County, Georgia, U.S., with a total investment of 3 trillion won. The first plant with a capacity of 10GWh is planned to be completed by 2021 and will be used to supply Volkswagen’s U.S. factory. Subsequently, the second plant of the same scale in Georgia will be completed by 2022 and will serve as the battery supply line for Ford’s electric vehicles in the U.S.

Investment is also increasing in China. At the end of last year, a 7.5GWh plant in Changzhou, China, was completed, and investment in a second plant in Yancheng, China, is underway. It is expected to be responsible for Kia Motors’ battery volume, being adjacent to Kia’s Yancheng Plant 3.

The bio business is also gaining attention due to COVID-19. SK Inc.’s new drug development subsidiary, SK Biopharm, achieved a spectacular IPO success. Another bio subsidiary, SK Pharmteco, through its subsidiary Ampac, was selected as a supplier for the U.S. government’s essential medicine procurement project in response to COVID-19. SK Bioscience, spun off from SK Chemicals’ vaccine business, is receiving global attention, with Microsoft founder Bill Gates expressing high expectations.

Chairman Chey and the CEOs of SK Group’s major affiliates will gather this week in Jeju to discuss sustainable growth strategies suited to the changed management environment due to COVID-19. The group’s annual event, the 'CEO Seminar,' will be held from the 21st to the 23rd at the Jeju Dianex Hotel. Considering the COVID-19 situation, this seminar will be conducted both online and offline simultaneously.

Chairman Chey, Vice Chairman Chey Jae-won, Vice Chairman Choi Chang-won of SK Discovery, the family head, SK Supex Council Chairman Cho Dae-sik, and about 30 top executives including major affiliate CEOs will attend offline, while other executives will join online. This year’s seminar, themed 'Concrete Plans for Financial Story,' is expected to discuss ways to pursue social value and achieve sustainable growth, which Chairman Chey has emphasized as the methodology of 'Deep Change' during the COVID-19 phase.

This content was produced with the assistance of AI translation services.