SK chief seeks new biz model in Middle East

SK Group will work closer with its business partners in the Middle East to find new growth models for the post-oil era, Korea’s third-largest conglomerate said Thursday.

The group plans to share its knowhow and expertise in wireless communications, semiconductor and other industries to create synergy with its Arab counterparts that are eager to develop new growth engines amid the prolonged low oil prices.

To that end, SK Chairman Chey Tae-won is currently in the oil-rich region, visiting key countries where the group has established its presence to explore new business opportunities through a series of meetings with government officials and corporate leaders there.

On Wednesday (local time), Chey was in the United Arab Emirates, meeting with Khaldoon Al Mubarak, CEO of the sovereign wealth fund Mubadala Development, to renew their partnership. Mubadala Development is known to have a broad investment portfolio, putting substantial amounts of money into consumer goods, information technology and healthcare industries.

The chairman also met with Mubadala Petroleum CEO Musabbeh Al Kaabi.

During the meetings, Chey proposed both sides set up new joint ventures in areas other than petrochemical and resources development, such as information communication technology, consumer products and healthcare, SK said.

“The continued low oil prices have called for fundamental changes and innovation in petrochemical and other conventional energy industries,” Chey was quoted as saying. “We agreed to develop new business models in new areas beyond natural resources development and processing, as well as enter new markets jointly.”

On Tuesday, Chey was in Saudi Arabia, meeting with Yousef Abdullah Al-Benyan, vice chairman and CEO of Saudi Arabia Basic Industries Corp. (SABIC), one of the world’s largest chemical firms.

They discussed ways to expand their joint nexlene business, among others. Nexlene is a high-performance polyethylene developed by SK.

In October last year, both firms began operating their first joint nexlene plant in Korea’s southeastern city of Ulsan. They plan to begin construction of the second plant in Saudi Arabia soon and export the material to China, the United States and other countries.

Chairman Chey also held meetings with members of the Saudi royal family and other business leaders there.

“SK will do everything it can to expand its presence overseas and help bolster Korea’s outbound shipments,” an SK Group spokesman said. “Following Chey’s Middle East visit, we will double our efforts to find new growth engines in cooperation with our Arab partners.”