By Kang Seung-woo
S-Oil said Monday that the Korean oil refiner will enter the solar photovoltaic (PV) business after deciding to acquire a 33.4 percent stake in Hankook Silicon, a local producer of poly-silicon, for 265 billion won ($245.39 million).
The deal is expected to help the company make a foray into the renewable energy business and gain added competitiveness in oil refining.
With the deal, S-Oil will become the second largest shareholder next to Osung LST and participate jointly in the management of Hankook Silicon. Both sides are scheduled to finalize the transaction in June.
Hankook Silicon started the production of high purity poly-silicon in 2010 ― the second fastest among local firms ― and currently has a capacity of 3,500 tons per year.
According to S-Oil, the silicon firm has proven technology and competitiveness, having succeeded in the mass-production of poly-silicon with the world’s highest level of purity (9-Nine) in a very short period of time after its plant construction.
The company is expected to expand to become a world-class poly-silicon producer with an annual capacity of 12,000 tons by 2012 when its on-going facilities expansion is completed.
“The Onsan Refinery Expansion Project, which was successfully completed recently, will promote the stability and profitability of our existing businesses. In addition, this investment in renewable energy will become a future growth engine for S-Oil and set a solid foundation for sustainable growth,” S-Oil CEO Ahmed Subaey said.
S-Oil, which has pushed hard to enter the renewable energy business as one of its three strategic directions for sustainable growth, plans to take this investment as an opportunity to implement the low carbon green growth strategy through win-win cooperation with small and medium-sized companies.
Moreover, given that products from Hankook’s new plant are set to be sold in overseas market, S-Oil expects that it will consequently contribute to the nation’s economic growth.