SK Energy is establishing a joint venture to expand its market in China, the world's largest asphalt market.
SK Energy made an announcement that it started operation in Hangzhou on Nov. 29 by establishing a joint venture, called the Zhejiang SK Energy Baoying Co. (Baoying-SK), with Zhejiang Baoying Group, a Chinese import distribution company specializing in asphalt.
A total of 200 guests attended the event, including SK Energy CEO Cho Kyung-mok, CEO of Zhejiang Baoying, and government officials of Zhejiang Province.
SK Energy said it will invest 450 million RMB (about 76 billion won) to secure a 49 percent stake in the joint venture company Baoying-SK and jointly manage it. The joint venture was based on the trust the two companies have built through 23 years of trading since 1996.
SK Energy has been aggressively exploring overseas markets, setting up a growth strategy to expand its oil product sales market based on cooperation with global companies.
Based on this global growth strategy, the company acquired a 35 percent stake in Myanmar's oil distribution group BOC jointly with its affiliate SK Trading International in July to pave the way for its entry into the Southeast Asian oil market.
The investment will allow the company to greatly boost the growth engine of its asphalt business in China, the world's largest market. While securing a stable sales location for asphalt products produced at Ulsan CLX, the company has now led a project that encompasses the value chain of the entire asphalt business, ranging from sourcing, storage, PMA processing, logistics and sales in China.