SKC sells off chemical business, secures W1tr for new investment

South Korean chemical firm SKC said Monday it has secured about 1 trillion won ($814.9 million) by liquidating its stake in its chemical business to expand investment in mobility and chip businesses.

SKC said Monday it has transferred a 49 percent stake in its chemical business to Petrochemical Industries Company in Kuwait and received 565 billion won Tuesday.

The move will create a joint venture SK picglobal and both companies will cooperate to establish a production capacity of 100 metric tons of propylene oxide. The joint venture is valued at 1.45 trillion won, SKC said.

On March 6, the company completed the sale of a 27.03 percent stake of SKC Kolon PI for 303.5 billion won to Korea PI Holdings. SKC Kolon PI is a joint venture established by SKC and Kolon Industries in 2008 and the world’s largest polyimide film company, with 30 percent market share in the sector.

In total, the two deals have brought SKC a fund of 868.5 billion won. Also, when SKC carved out its chemical business to PIC in February, the company was relieved of borrowings worth 300 billion won. Thanks to these moves, SKC has now a room for 1 trillion won.

With extra cash in hand, SKC pledged it would move on from its chemical business and invest in new businesses.

“SKC will make additional investment in mobility, semiconductor, display and environmental industries while improving its financial structure,” a SKC official said.

SKC said it will focus its investment in next-generation electric vehicle battery materials and technology. After completing the acquisition of KCF Technologies -- a major manufacturer of battery copper foil for electric vehicles -- in January, SKC is reviewing on building a global production facility.

“We have pursued a shift from oil with a determination for a fundamental change despite so many challenges,” said Lee Jae-wan, president of SKC.

“Despite concerns over global economic slowdown by the recent COVID-19 outbreak, we will do our best to transform our efforts for innovating business model into a tangible result.”

By Kim Byung-wook (kbw@heraldcorp.com)