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Conglomerate reveals record W19 tril. investment and hiring plan
By Yoon Ja-young
SK Group will invest 19 trillion won this year, nearly double the investment of last year and the biggest ever for the conglomerate. Prosecution, meanwhile, decided to indict group Chairman Chey Tae-won on charges that he misappropriated corporate funds. The country’s third largest conglomerate announced its investment and recruitment plans for 2012, Thursday. While other conglomerates have already revealed their management plans for this year, the prosecutor’s investigation on the chairman had prevented SK from moving ahead with plans. Chey and his younger brother Jae-won, who is group vice chairman, went through lengthy questioning for allegedly covering losses from their future investments with corporate funds. The younger Chey was arrested on Dec. 29.
Record investment and recruitment
The group, which acquired the world’s second biggest computer memory chipmaker Hynix Semiconductor last year, appears set on ambitious globalization.
Investment by group subsidiaries, including Hynix, will total 19.1 trillion won this year, up 10 trillion won from last year and more than six times that of a decade ago when its yearly investment stood at 3 trillion won. It has made double-digit increases in investments each year since 2004, bolstering spending in facilities and R&D.
Of the 19.1 trillion won, 10 trillion won will be invested in facilities, 2 trillion won in R&D, and 2.1 trillion won will be allocated for natural resource development, up 800 billion won from last year. “The decision is based on the belief of our chairman, who thinks securing natural resources is crucial to have a competitive edge for any business or country,” a group spokeswoman said.
SK Energy, one of its main subsidiaries, attained over 60 percent of its total sales from exports last year. Focusing on developing natural resources such as oil, gas and coal overseas, Chey was in the spotlight last year when he visited the coal mine in Australia where SK has invested, and went 400 meters underground.
In earlier meetings with group executives, the chairman requested that they set up aggressive management plans to turn crisis into opportunities. “Businesses should adopt aggressive management strategies, while increasing investment and recruitment, especially when the economy is in trouble. That will strengthen the country’s economy,” the chairman was quoted as saying.
The group plans to hire over 7,000 people this year, 40 percent more than last year and the largest recruitment ever. The group explained that the aggressive hiring aims at contributing to the economy through job creation, on top of securing human resources for its own growth.
It allocated 30 percent of the new posts to those with only high school diplomas, reflecting the social agenda that those without college degrees should also be given career opportunities.
Keyword: Global
The keyword in SK’s investment plan is “global.” “When the acquisition of Hynix is completed, 2012 will mark the remarkable first year for SK Group’s true global growth,” Chey told executives, encouraging them to bolster the globalization drive.
The country’s two biggest conglomerates are Samsung Group and Hyundai Motor Group, followed by SK Group. While Samsung and Hyundai are huge exporters, SK has been regarded a local market-oriented group as its two major pillars are SK Telecom, the telecommunication business, and SK Energy, though the latter exports oil products.
As the business is confined to the local market, it has been in conflict with the President Lee Myung-bak administration which tried to fight inflation by twisting the arms of businesses. Industry analysts estimated that the conflict with the government somewhat caused the group Chairman Chey to be subject to a prosecutors’ investigation lasting over a year.
Acquisition of Hynix, the globally competitive chipmaker with huge exports, is an important turning point for the group seeking global expansion.
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