Maeil Business News Korea('20. 5. 4)

https://www.mk.co.kr/news/business/view/2020/05/453867/

Won Ki-don, CEO of SK picglobal

PO is a basic raw material for automobiles, cosmetics, and pharmaceuticals

The first company to commercialize an eco-friendly production method

A joint venture with Kuwait aims to produce 1 million tons annually

An engineer with 30 years’ experience since Yukong

A living witness in the Korean PO industry

Satisfying German and Japanese companies that are known for strict standards

In 2004, senior executives from Evonik, a large German petrochemical company, visited SKC's Ulsan Plant. Evonik was looking for a chemical company capable of securing a pilot facility that can produce and commercialize automotive interior materials as well as Propylene Oxide (PO), a basic raw material used for cosmetics and pharmaceuticals, using the eco-friendly HPPO method. Since the company achieved the technology after more than 10 years of research and development (R&D), it was putting all efforts into finding a partner company.

Although Evonik visited leading chemical companies around the world including the United States, Europe, and Japan, it wasn't sure.SKC was the 70th company Evonik visited. Won Ki-don, CEO of SK picglobal, was head of the technical team at the SKC Ulsan Plant at the time. After touring the SKC Ulsan plant, Evonik executives told SKC officials that "let's go for it together." Evonik chose SKC for three reasons: "Koreans have a strong driving force. SKC's Ulsan plant has very advanced technology. Last but not least, we like Cha Bum-kun." SKC engineers, led by CEO Won, immediately began a feasibility study. PO was a basic raw material with increasing usage worldwide, but a significant number of plants around the world were using chlorine in the manufacturing process, which adversely affected the environment. They had to find an eco-friendly PO manufacturing method that does not use harmful substances. At that time, SKC also began R&D for eco-friendly PO production in preparation for the future market. SKC engineers who inspected Evonik's facilities concluded that "it was worth trying." However, an analysis found that commercialization would require a budget of KRW 200.

"If success is guaranteed, KRW 200 billion would not be a big deal. I couldn't guarantee success. Still, I thought that the eco-friendly method was the right way for a chemical company to pursue. I started convincing management with the thought that if I fail, I’ll quit. I was really going to resign if I failed."

CEO Won of SK picglobal, which became the first Korean company to begin commercial PO production in the world in 1991 and is gearing up to go global, met with us at SKC's headquarters in Jongno-gu, Seoul on the 28th of last month. He recalled the time when SKC's Chemical Business Division made its name known to the world: SKC's Chemical Business Division succeeded in operating the world's first facility to manufacture 100,000 tons of PO annually with an eco-friendly method in January 2008. The construction of a factory required 36 months in theory, but it was completed in 24 months. For more than 10 years since then, the eco-friendly PO manufacturing facility has been in constant operation with its operation rate exceeding 100%. The current PO output amounts to 310,000 tons per year. Since the commercialization of eco-friendly PO, the status of SKC's chemical business division has been elevated considerably. More than 10 global companies wanting an eco-friendly PO method have visited SKC. The story that a well-known global consulting firm advised a large US petrochemical company seeking to introduce an eco-friendly PO method "to partner with SKC," has become a legend in the industry.

In August of last year, SKC established a joint venture called SK picglobal with PIC, a subsidiary of Kuwait's state-owned oil company KPC, by spinning off its Chemical Business Division to expand the business and production using the eco-friendly PO method. The value of the joint venture, calculated by both companies, amounts to USD 1.195 billion, or KRW 1.45 trillion. Mr. Won, who succeeded in commercializing the world's first eco-friendly PO method, was appointed as the inaugural CEO of SK picglobal.

"Kuwait, an oil-producing country, was seeking to enter the petrochemical industry in a bid to respond to the decline in oil demand in the long term. We highly valued not only SKC's operational capability and PO downstream technology, a high value-added industry, but also its pursuit of sustainable social value (SV) and manufacturing competitiveness _ base_d on digital technologies such as artificial intelligence (AI). As PIC is promoting collaboration with a number of global projects _ base_d on its strong capital _ base_, we expect to be able to help expand the business."

CEO Won, who majored in chemical engineering, joined Yukong, the predecessor of SKC's Chemical Business Division in 1987.Afterward, he headed the production support team and the technology team at SKC's Ulsan Plant, and in 2005, became the chief of the eco-friendly PO method promotion office. He is called "a living witness of the Korean PO industry" as he has been in the business all along from Yukong's construction of a PO plant in Ulsan to the development of an eco-friendly PO method.

When he was working for SKC, CEO Won was called an "energy-saving" evangelist." While serving as the plant manager, he collected empty cans and covered the pipes with them. This helped reduce even the heat loss caused by rainfall, saving energy of KRW 2 million per year. CEO Won also paid great attention to the eco-friendly PO method. CEO Won said, "When I climbed up to a mountain nearby and looked down our plant in operation, I saw a haze coming out of the plant. This meant the heat was leaking into the atmosphere, so we aimed for "zero haze." The company immediately invested KRW 6 billion in recycling hot wastewater generated from the plant into a heat resource, which resulted in a 60% reduction in energy consumption compared to the existing design. In terms of cost, it saved about KRW 10 billion.

CEO Won is committed to achieving further growth of SK picglobal. The first goal is to establish the PO system with a capacity of 1 million tons through global expansion and to leap forward as a global leading PO producer. The second is a challenge to a new business that can _ create_ social value. "We have been participating in the Alliance to End Plastic Waste (AEPW) as the only Korean member since July 2019. SKC is promoting a project to recycle plastic waste and turn it into resources in cooperation with participating companies," said CEO Won. The aim is to solve the plastic waste problem and secure technology to develop it as a new growth engine. Lastly, the company seeks to secure the world's best plant operation capabilities in terms of cost, quality, and logistics by adopting new technologies such as AI and digital transformation while increasing the proportion of high value-added products.

[Reporter Won Ho-seop / Photo by Reporter Han Ju-hyeong]