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|SK innovation||SK innovation Accelerating ‘Deep Change’ through Second M&A in Chemical Business||
- Acquiring high value added packaging PVDC business of Dow Chemicals
SK innovation began to accelerate its business structure innovation by completing the second M&A in the field of the chemical business this year.
On October 11, 2017, SK innovation announced that its chemical business subsidiary SK global chemical signed a Sales and Purchase Agreement (SPA) for the acquisition of the polyvinylidene chloride (PVDC) business of the US’ largest petrochemical company Dow Chemicals.
Based on this, SK global chemical was able to acquire the PVDC business following the ethylene acrylic acid (EAA) business and had taken one step closer toward a ‘Total Packaging Solution Provider’ which can provide major products of packaging chemical materials.
SK global chemical takes over Dow Chemicals’ all the part of the PVDC business through this agreement. This agreement covers from the PVDC brand SARAN™ to production technologies, intellectual property, and production facilities located in Michigan, USA.
Kim Hyung-Geon, CEO of SK global chemical, said, “Focusing on next generation growth drives such as high value-added packaging materials and automotive materials, we will concentrate our capability on securing technologies and various product portfolio. Through various activities such as R&D, M&A, and joint ventures, we will possess core materials and technologies to emerge as a top player in the global market.”
PVDC is one of barrier film materials, which is a core sector of high value-added packaging industry. As it is outstanding in preventing contents from deformation and decay by moisture and oxygen, it is used as a material for packaging frozen and refrigerated processed meats, which require excellent level of barrier quality.
In particular, barrier film materials have high barriers to the market entry and there are small number of suppliers. Also, it is expected that the demand for groceries in Asia will continuously increase.
In order to overcome the existing petrochemical product portfolio that consists of naphtha, ethylene, and polyethylene for general use, SK global chemical is developing high value-added chemical products such as Nexlene™ with its own technologies and transforming into a high value-added chemical company by acquiring Dow Chemicals’ EAA business.
Through this acquisition, SK global chemical was able to be equipped with high value-added core materials of multi-layer packaging film including Nexlene, EAA, and PVDC. The company is planning to develop customized products and improve customers’ accessibility by securing various material portfolio through synergy effects using existing technologies.
SK global chemical will actively expand its business portfolio by establishing foundation to accelerate Deep Change 2.0, which is focusing on innovation of the business structure through consecutive M&A.
Based on this, the company will emerge as the total packaging material specialty company to actively target the China market, which is rising as the largest packaging material market, using its existing infrastructure and network in China.
Kim Joon, CEO of SK innovation, said, “By focusing on fostering non-oil businesses such as chemical and battery businesses, we will accelerate business structure innovation ‘Deep Change 2.0’ which enables the company to survive and grow even in a hostile environment such as grasslands of Africa.”
SK innovation set up its strategy to concentrate on automotive materials and packaging business, which are considered as the next generation growth drives of the chemical industry. The company had announced to make its subsidiary SK global chemical emerge as one of global top 10 chemical companies by the end of 2024 through continuous investment.
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