SK Group, the nation’s No. 3 conglomerate, is expected to restructure its affiliates in 2013 following a change of leadership earlier this week.
Issuing a gloomy outlook of the country’s economy for next year, local analysts predicted that SK may go through a reorganizing of its affiliates that have overlapping business projects.
The reported merger of SK Planet and SK Marketing & Company signaled the first step of the conglomerate streamlining its subsidiaries.
The two companies are expected to combine projects like location-based online shopping services and upgrade marketing capabilities through the merger, which was approved at a board meeting.
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The headquarters of SK Group in Jongno, central Seoul (Bloomberg) |
SK M&C is a joint venture between SKT and SK Innovation, while SK Planet, on the other hand, is a wholly owned subsidiary of SKT that focuses on software and mobile platform-related projects. The firm split from the telecom giant in October of last year.
“SK Group is planning to rearrange the repetitive projects at its affiliates and turn down the non-core projects in a bid to gain portfolio competitiveness and better organizational efficiency,” an SK Group official told local media.
SK previously said it would be reducing its affiliates to 91 from 96 by merging overlapping divisions and eliminating noncore operations. SK Networks Service recently merged with SK Networks Internet, while three of SK Hynix’s affiliates were merged into one. Up to 300 employees of SK Communications, meanwhile, were laid off earlier this year.
Although SK projects that the domestic economy’s growth rate will remain at 2.5 percent compared to the global economy’s 2.7 percent, it said it will make more aggressive overseas investments.
In particular, the conglomerate plans to focus on advanced markets such as the U.S., European Union and the Chinese market, its officials said.
“We will go ahead with investments in overseas markets, rather than the local market, since our major affiliates like SK Telecom also need to look for new growth engines,” according to an SK official.
However, the details of next year’s investment scheme have yet to be unveiled.
On Tuesday, SK Group chairman Chey Tae-won stepped down from his post. SK Chemical vice chairman Kim Chang-keun was his successor.
As SK’s biggest stakeholder, Chey will hold the chief executive positions at SK Holdings, SK Innovation and SK Hynix.
SK officials said the move was designed to help Chey concentrate on long-term plans on global expansion, next-generation growth engines and high-level overseas networking.
The change in leadership was a big step considering that Chey has served as SK Group chairman since 2004.
SK Group’s new chief Kim, 64, will take over the post at SK’s top decision-making council and be responsible for running SK Group’s new operation system that stresses each affiliate’s autonomy as well as board and committee-oriented operational structure. He is also tasked with redefining its holdings company, which is scheduled to be implemented next year.
SK Group plans to announce the results of its year-end reshuffling of chief executives in mid-January, its officials said.
By Cho Ji-hyun (
sharon@heraldcorp.com)
