SK chemicals.Intensifying a profitable business, accelerating separating from fiber Source : Maeil Business Newspaper 2000.07.10 Upon the lightning accord with Samyang on polyester integrated corporate, SK chemicals is accelerating separating from fiber which has been propelled at a level of business restructuring. The polyester business unit has recorded a sale of $290 million dollars which is 40 % of total sales of $720 million dollars. So, its separation will result in a decrease in sales but increase in profitability. "By separating from the synthetic fiber field which is over $8 million dollars in deficit, we will have a business structure with great profitability and growth potential comprised of petrochemistry, resin, fine chemistry and life science," said a source from SK chemicals. Also, it is said that in spite of the separation of the polyester business, the decrease in sales will not be great due to the expansion of new businesses including high performance polyester resin business which runs regularly from the end of this year. In the upper half of this year, sales were $357 million dollars which is 20 % higher than that from the same period last year. The profit is $1 million dollars (expected) which has increased by 23 %, and will be increased further in the second half due to the separation of the polyester field. Based on accumulated technologies, SK chemicals plans to concentrate on the development of a high value added advanced synthetic fiber of next generation such as PTT fiber, new rayon and sound absorption adiabatic materials. In case of PTT fiber, development of fiber for clothes has been successful for the first time in the world with cooperation with Shell of US. Environmentally friendly sound absorption adiabatic materials are developed with a low melting polyester fiber, and are applied to car interiors and adiabatic material for construction. In addition, SKYVAVA, a joint venture with Kaltech of US, is established and production and sales in US is projected. Expected earnings from this business are $8 million dollars for plant export and a yearly profit of 1 million dollars from exclusive material supply and sales royalty. From December this year 125 million dollars of yearly sales is planned from the production of high performance polyester resin in the capacity of 35,000 MT/Yr. Last year SK chemicals developed a third generation platinum complex anti-cancer agent Sunpla which is recognized as the first drug developed in Korea and represents the technology of SK chemicals. SK chemicals is concentrating investment in the Life Science field. Currently, developments of new drug for flu and apoplexy are progressing with collaboration with the Pharmaceutical Research Institute of China. The arthritis drug, SKI306X, prepared by natural products is in the clinical test stage and is expected to get approval for sale by early next year. SKI306X has no side effects such as ulcer hemorrhaging or liver complications in prolonged use and is considered as an advanced drug compared to existing steroid or non-steroid type anti-inflammatory agents and analgesics. Also, regarding the genome project establishment of a biotechnology venture is progressing in collaboration with a research institute at a university and with national labs. SK chemicals is also trying to reduce financial costs and enhance financial stability through financial restructuring. Currently, it hold stock in related companies like SKTelecom worth $500 million and significant portions will be sold to pay debts. Also, the separation of the polyester business will reduce a $100 million dollar loan.