SK Group Gaining Global Image

I tend to highlight Hyundai-Kia, Samsung and LG when I discuss Korean big business. Number 4 ranked SK is worthy on mention since it, too, has made great strides in global expansion.

Korea Times notes:

SK Group, one of the big four global business groups in South Korea along with Samsung, Hyundai Automotive and LG, is rapidly enhancing its image both at home and on the world stage.

SK mobile phones are becoming a well known brand on the world market while more and more foreigners are becoming acquainted with the company SK, which is gaining international brand value along with Korean counterparts Samsung computers and Hyundai cars. [ and LG cell phones, clothes washer, and dryers.]

The annual sales of SK Group were $60 billion last year, or 7.8 percent of the countryÂ’s 2005 gross domestic product (GDP).

The figure of $60 billion also corresponds to 27 percent of the national budget. The group expects sales to reach $65 billion this year.

Although the SK Group sold off its mobile handset manufacturing arm, SK Teletech, and life insurance subsidiary, SK Life, in 2005, the conglomerateÂ’s total annual sales surpassed its initial target of 57 trillion won last year.

In particular, sales of SK Telecom, the nationÂ’s biggest mobile carrier, hit a record high of $10 billion in 2005, up 4.7 percent from a year earlier, thanks to a constant rise in the number of subscribers and a sharp increase in the demand for wireless Internet data service.

Corporate analysts attribute the performance to SKÂ’s increasing efforts to perfect its globalization drive and transform itself into a top-tier multinational industrial conglomerate.

Under Chairman Chey Tae-won, its long-term globalization strategy is focused on establishing more SK brands in overseas markets after establishing them locally.

Chey is asking his SK company CEOs to perceive the emerging Chinese market as another domestic market when mapping out their business plans.

SK Telecom has contributed enormously to various social aid programs. The company was the first Asian company to join in the global effort to help Vietnamese children with facial fractures and lacerations.

KoreaÂ’s No. 1 mobile carrier not only supported the full cost of surgery but also medical equipment, medication and other medical supplies needed by local Vietnamese hospitals.

Thanks to such wide-ranging, overseas charity efforts, a growing number of young highly talented Asians have been attracted to the company and are hoping to join SK companies.

To achieve its ``Universal SKÂ’Â’ goal, the industrial group is creating a business model linking its companiesÂ’ manufacturing, logistics and service infrastructures scattered across the globe.

Last year it launched its Global Committee and Overseas Cooperation Group comprising executives engaged in overseas business to strengthen group-wide systemic globalization.

SK Corp. President Shin Heon-cheol heads the Global Committee, which includes overseas business executives of 10 major SK affiliated firms including SK Telecom, SK Networks, SK Engineering and Construction and SK Chemicals.

The Overseas Cooperation Group under the committee is organizing joint business projects by SK companies and encouraging market information sharing between the companies.

In China the SK China Holding Company, set up in 2004, plans to diversify its businesses in the worldÂ’s single biggest market of more than one billion, while consolidating its foothold in telecom and chemical markets. The SK Group deems its Chinese business has entered the stabilization phase.

SK Telecom is seeking to make inroads into India to capitalize on IndiaÂ’s advanced information technology (IT) and its high economic growth potential.

In the U.S., SK units seek to extend their presence in mobile telecom services, wired and wireless Internet compatible Cyworld Web-blog services and oil exploration businesses. HELIO, a $440 million mobile virtual network operating joint venture to be set up by a partnership comprising SK Corp. and U.S. Internet service provider EarthLink, will launch its nationwide service in the U.S. this year.

SK Corp. is exerting all efforts to strengthen relations with Kuwait and Vietnam, two countries indispensable to the oil refinerÂ’s goal to emerge as a top-tier energy and chemicals major in the Asia-Pacific. SK Engineering and Construction also won a $1.2 billion oil cargo facility construction project in Kuwait last year.


Chairman Chey is accelerating SK GroupÂ’s globalization drive through vigorous engagement with management. He spent 44 days abroad last year, visiting six countries and meeting seven heads of state, a group spokesman said.

The Korean government welcomes CheyÂ’s energetic efforts to secure offshore energy sources as it is closely related to KoreaÂ’s energy security issue amid rising international oil prices.

Chey was in discussion with Chinese Prime Minister Hu Jintao at a CEO event held on the sidelines of the 2005 Pusan APEC Summit held in Korea last November, and held personal meetings with heads of state of Russia, Indonesia, Peru and Vietnam.

Energy security is a critical concern as KoreaÂ’s crude oil self-supply ratio stands at a petty 3 percent level. Chairman Chey believes that Korea should push up the ratio to 10 percent like Japan, the spokesman said.

In the past half a century, the SK Group, which started off as Sunkyong Textiles, a small textile manufacturer, has grown into a powerful multinational business group that is a major force in the energy, chemical and telecommunication fields.

The groupÂ’s sales first topped the 30 trillion won mark in 1997, when it greeted the 44th anniversary of the foundation, having doubled sales in only eight years.