in 1953 and is the second-largest type of conglomerate in South Korea after the well-known giant Samsung Group. It includes a huge number of 186 subsidiaries and affiliates that took the “SK” name and have the same management philosophy, called SKMS (SK Management System).
The multinational company is engaged in varied business domains, such as processing chemicals and petrochemicals, semiconductor materials, flash memory storage, different information technologies, construction, marketing, and worldwide telecommunications services.
So, SK On manufactures Ev batteries and develops different ways of innovative technologies to encourage green transportation spreading. Their production is mostly centered on medium to large batteries for electric vehicles and Energy Storage Systems (ESS), which are generally made to store the energy surplus for later demand. The subsidiary is the fourth-largest worldwide Ev battery maker, behind the Chinese CATL and BYD titans, and the South Korean competitor, LG Energy Solutions.
The financial problems have apparently begun since the subsidiary split off from its parent company, in 2021. Since then, its debt has increased by more than fivefold, as its clients, Ford and Volkswagen, sales in the Ev market were not as good as expected.
With the condition getting worse and worse, chief executive Lee Seok-hee made an announcement last Monday, stating that some cutback measures are going to be made, part of the “emergency management” they are going to implement. He went even further and wrote to his employees: “We have our back against the wall” and “We shall all pull together”.
According to a close person in the conglomerate business, other crisis solutions are also taken into account. The management wants SK Innovation, SK On’s parent company, to fusion with SK E&S, the subsidiary that has high numbers in liquid natural gas production. The decision is set to be debated at the administrative level this month.
Aldo, the worldwide context seemed to be favorable to the South Korean EV battery makers, including SK On, with Washington and Brussels wishing to block the Chinese-imported EV battery, and billions of dollars in subsidies from President Joe Biden, the Electric vehicle market sales failed.
However, Tim Bush, a Seoul battery analyst, said that, as long as the SK On subsidiary has the support of all the conglomerate, its future “is likely to be assured”.
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