A bird’s eye view of Block 15-1 off the coast of Vietnam. SK, which holds a 9 percent stake in an international consortium to develop the oil field, has discovered two oil deposits there.

By Jane Han
Staff Reporter

If global expansion topped SK's growth strategy this year, the fresh aim of the country's third-largest conglomerate is to solidify its position overseas and widen research and development in the life sciences industry.

SK, which does business in countries including the U.S., China and Vietnam, established SK International (SKI) earlier this year to maximize the efficiency of all its overseas offices.

And to add weight to its efforts, Chairman Chey Tae-won traveled worldwide throughout the year to search for new opportunities.

After participating in the World Economic Forum in Davos in January, Chey flew to the U.S. to observe on-site developments and meet with political and business leaders. In March, the chairman accompanied President Roh Moo-hyun on his Middle East trip, through which Chey discussed constructing a U-City in Saudi Arabia and a crude oil processing plant in Kuwait.

In October, immediately after attending the inter-Korean summit in Pyongyang, Chey traveled to Peru to discuss economic cooperation, including natural resource development and petrochemical investments.

Company officials say the chairman's global management strategy is directly translated into company revenue, as SK rung up exports worth $25 billion last year and expects more than $27 billion this year.

Telecom & Energy

Among the family-run group's diverse business portfolio, its core businesses are energy and telecommunications, of which both made a significant leap outside Korea.

The nation's largest mobile phone operator, SK Telecom, has already set foot in the U.S. and China, while looking to enter the Indian and Indonesian markets that are more promising compared to the domestic mobile market that has long been saturated.

India, where only about one out of three people own cell phone, is the world's fastest growing phone market that added 7.8 million wireless users just in September. The government predicts new subscribers to increase 25 percent in two years.

In the U.S., SKT set up a joint venture with Atlanta-based Earthlink with services beginning May last year. However, as business results didn't show strong signs of growth, the mobile-phone operator is now considering boosting ties with Sprint Nextel, the third-largest wireless carrier in the U.S.

In the lucrative energy business, SK Group is currently carrying out exploration projects worldwide, with the company currently securing proven reserves of 510 million barrels of oil in 26 blocks in 14 countries including Peru, Brazil, Vietnam and Kazakhstan.

And at the same time, it is also stepping up efforts to secure other natural resources such as coal, copper and gold.

Research & Development

To beef up the group's key businesses in energy, chemicals and telecommunication, SK for the first time invested one trillion won this year on R&D alone, which takes up more than 14 percent of the company's annual investment budget of seven trillion won.

The figure also shows a significant hike since years back, when just over 300 billion won was allotted to R&D in 2003, then 600 billion won in 2006, demonstrating a tripling over four years.

And from operating six local R&D centers, SK opened doors to seven more during the same period to expand into more diverse research areas.

The rollout also went overseas, as facilities in Shanghai, Beijing and New Jersey were newly added to its list, in line with the additional number of staff researchers that is expected to exceed more than 2,000 this year.

Taking a closer look at some of the main businesses areas, SK Energy for the first time in the world invented the Advanced Catalytic Olefin (ACO) technology, a proprietary process that gives higher overall olefin yields compared to conventional steam crackers.

SK Chemical released in August a new impotency medicine, as the chemical division is currently focusing on putting out more fresh medicines on the local market.

In the telecom sector, SKT has spent the year strengthening the 3.5 generation High-Speed Downlink Packet Access (HSDPA) technology, which is highlighted as a promising next-generation wireless Internet service.

To extend ongoing developments further, company officials said SK Group has set next year's R&D budget about 5-10 percent higher, at around 1.1 trillion won.

jhan@koreatimes.co.kr