• Aims to become the world’s No. 1 Copolyester by using recycled materials… Commercialization of biomaterials
• Expanding new drug pipelines through AI and Open Innovation∙∙∙ Achieve KRW 1 trillion sales in biotech and pharmaceuticals
• Raised investments of KRW 2 trillion by utilizing assets and business profits, Aggressive business style expected

SK chemicals presented a new blueprint for replacing the petroleum-based plastic business with recycling and bioplastics and expanding its pharmaceutical business to biotechnology. Through this, the company plans to increase sales to KRW 4 trillion by 2025 and has committed to invest more than KRW 2 trillion.

At its regular general meeting of shareholders on the 28th, SK chemicals (CEO Jeon Kwang-hyun) unveiled the company’s “Financial Story,” which focuses on the business transition to “Green Chemicals” and “Biotechnology.”

Its strategy is to upgrade and reorganize the existing chemical business centered on petrochemical products into “Green Chemicals” and the pharmaceutical business centered on synthetic drugs into “Biotechnology.” Its main goal is to replace all raw materials such as petroleum-based copolyester with discarded plastic and naturally derived biomaterials and to create new opportunities in the rapidly increasing biopharmaceutical field through Open Innovation and in-house R&D to achieve sustainable growth.

CEO Jeon Kwang-hyun of SK chemicals said, “Resolving the plastic waste problem and improving human health through new technologies is a task that companies must solve and a great opportunity for growth,” and he explained, “Green chemicals and biotechnology are areas that SK chemicals can do best, and upon which has been built a business foundation for shifting into recycling and bioplastics business and developing new drugs thanks to our decades of accumulated technology. This is an essential task that must be achieved in the mid to long-term for survival and growth.”

■ Transition to 100% of recycling sales in the copolyester business and promotion of a new White Biotechnology business In the green material business, the company has decided to replace copolyester materials, which currently account for the majority of sales, with recycled plastic by 50% in 2025 and 100% in 2030. In preparation for the rapidly increasing demand for recycled plastics, the company is going to expand its production infrastructure currently established in South Korea’s Ulsan plant to major overseas bases. Through this, it plans to increase its production capacity to 300K tons by 2025 and 450K tons by 2030 to become the world’s No. 1 in the copolyester field.
One of the main tasks of Financial Story is to establish a circular economy ecosystem for plastic waste such as PET, which will be the raw material of recycled plastics. When local governments and local collection companies collect discarded PET bottles, SK chemicals makes them into recycled plastics and supplies them back to the market in the form of finished products through its existing sales network. Through this, the company plans to create a virtuous cycle structure in which social values are linked to business performance by securing a stable network for waste plastic recycled raw materials and sales outlets, and at the same time establishing a sustainable ecosystem for plastics. The company predicted that it would be able to resource about 20 percent of PET waste thrown away in Korea.
It is also accelerating its business in the field of biomaterials that will replace petroleum-based raw materials with naturally derived materials.
The company has decided to promptly promote the establishment of production facilities and partnerships for commercialization and business expansion of biomaterial PO3G and biodegradable plastic highly flexible PLA, for which it has already completed technology development, and has decided to foster a new White Biotechnology business and nurture it as a new growth engine with annual sales of KRW 1 trillion. The company aims to solidify its position in the bioplastics field, which is expected to grow to KRW 390 trillion by 2030.
The company also proposed a goal of achieving net-zero greenhouse gas emissions by 2040 through the transition to green energy. The strategy is to invest KRW 420 billion in energy infrastructure used for production, such as the Ulsan plant, to convert existing coal power plants to LNG cogeneration power plants by 2024, and to establish a green energy system by introducing hydrogen infrastructure in the mid to long-term. The company expects that if the product portfolio is replaced with low-carbon green materials and net-zero is achieved, it will be able to offset all of its 1.37 million tons of greenhouse gas emissions by 2040 and reduce the cost of purchasing carbon credits.

■ Achieved KRW 1 trillion in sales by adding new technologies through Open Innovation to the company’s existing drug development and marketing capabilities
In the life science field, the company plans to advance the specialty drug business to treat conditions of the musculoskeletal system and nervous system, which it currently dominates, while expanding its business scope to the entire biotechnology field through partnerships highlighting AI and Open Innovation.
In areas such as non-alcoholic steatohepatitis, fibrotic disease, and rheumatoid arthritis, where the company has accumulated in-house R&D capabilities, it decided to conduct rapid and efficient in-house R&D by applying AI technology. In new biotechnology fields such as △ gene editing, △ gene therapy, △ targeted protein degradation, and △ cell therapy, the company will develop advanced technologies using applied science through Open Innovation with other companies to strengthen competitiveness.
In this regard, Kim Jung-hoon, the director of SK chemicals R&D Center said, “SK chemicals has made remarkable achievements in new drug development and biotechnology, including the development of the first domestic novel drug Sunpla, the development of the world’s second cell-cultured flu vaccine, and the first approval by the U.S. FDA for a new U.S. biopharmaceutical developed with domestic technology,” and announced, “With these capabilities, we will achieve KRW 1 trillion in sales in the biotechnology sector by securing new biotechnologies and infrastructure through Open Innovation.”
Along with the reorganization of the business, the company decided to implement ESG practices and establish a transparent and professional management system. The company plans to establish a transparent governance and management system by strengthening and specializing the role of the board of directors through independent and transparent operation and continuously communicating with shareholders through various shareholder return policies and participation systems.
CEO Jeon Kwang-hyun of SK chemicals said, “Last year, through the sale of our composite materials and PPS businesses, we created conditions for focusing on our core businesses and the creation of new business opportunities,” and “Based on our existing assets and solid business profits, we will raise investments of more than KRW 2 trillion to build production infrastructure to promote green chemicals and biotechnology businesses, and we will make a company-wide effort to create new business opportunities such as M&A investments along with aggressive R&D.”



[Photo Description] SK chemicals announced a Financial Story centered on green chemicals and biotechnology. CEO Jeon Kwang-hyun announced the business plan at the general shareholders’ meeting held at the SK chemicals headquarters in Pangyo on the 28th.