Chemical Industry Accelerates Renewable Business Restructuring... Entry into Hydrogen Business, etc.

Kim Gyo-hyun, Vice Chairman and CEO of Lotte Chemical.

[Asia Economy Reporter Moon Chaeseok] The chemical industry conveyed a message to shareholders ahead of their regular general meetings, expressing their intention to accelerate the restructuring of businesses toward renewable energy such as hydrogen. Lotte Chemical announced it would speed up its hydrogen business, including building hydrogen charging stations and making new investments in emerging technology operators. SK Chemicals appointed SK Discovery President Ahn Jaehyun, who has extensive experience in renewable energy and mergers and acquisitions (M&A), as a new inside director, signaling an expected increase in investments in related fields.

According to the Financial Supervisory Service on the 4th, the two companies disclosed changes in business objectives, general meeting agendas, and new inside director appointments through convening resolutions sent about two weeks before the general meetings held the previous afternoon.

Lotte Chemical included "entry into hydrogen tank business and hydrogen charging station operation business" in the detailed changes to its business objectives. Having signed a memorandum of understanding (MOU) last year with Air Liquide and SK Gas, it is expected to take a more proactive approach to the hydrogen business. With Air Liquide, they agreed to collaborate on a high-pressure hydrogen shipping center and hydrogen charging station construction using by-product hydrogen, and with SK Gas, on gas hydrogen charging stations and hydrogen fuel cell power plant projects. Last year, Lotte Chemical became the first chemical company to establish a 50 billion KRW ESG (Environmental, Social, and Governance) dedicated fund, laying the groundwork for financing business restructuring.

The addition of "investment in new technology operators and other investment-related businesses" to the business objectives also draws attention. This suggests an acceleration in securing technologies such as clean hydrogen production and carbon capture, utilization, and storage (CCUS). Kim Kyohyun, Vice Chairman and CEO of Lotte Chemical, stated, "Through organic cooperation among chemical business unit (BU) affiliates, we will create added value in the hydrogen business and actively collaborate with group affiliates to realize the hydrogen business roadmap."

Ahn Jae-hyun, newly appointed inside director of SK Chemicals.

SK Chemicals appointed President Ahn as a new inside director and reappointed President Jeon Gwanghyun as CEO. Along with CEO Kim Cheol, the board will consist of three inside directors and four outside directors, totaling seven members. Since becoming president of SK Construction (now SK Ecoplant) in 2019, Ahn has successfully led the business structure transformation toward eco-friendly and new energy sectors at SK Ecoplant and is known within SK Group as an expert in investment and M&A. Accordingly, industry observers speculate that SK Chemicals may expand investments related to renewable energy.

SK Chemicals has been focusing its capabilities on eco-friendly plastic materials after divesting its composite materials and PPS (polyphenylene sulfide) businesses last year. Through SK Multi-Utility, a district energy business specialist company established via a physical division in December last year, it is transitioning its power supply business centered on coal power to liquefied natural gas (LNG). It plans to begin construction of an LNG power plant on 37,600 square meters (approximately 11,400 pyeong) of idle land within the Ulsan Petrochemical Complex in June. An SK Chemicals official said, "It is more appropriate to view the appointment of President Ahn not as a restructuring of new businesses but as a change in board composition and strengthening of new business portfolio promotion."

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