SKC and Kuwait's state-run petrochemical company PIC have begun the process to sell SK picglobal, a petrochemical feedstock producer the two jointly established five years ago. With the domestic petrochemical industry mired in a slump due to oversupply from China, SKC appears to be moving to wind down its petrochemical business.
On the 13th, an SKC official said, "SKC has long considered rebalancing its petrochemical institutional sector," and added, "We are checking the intentions of companies that are interested in acquiring SK picglobal."
In 2020, SKC spun off its chemical industry institutional sector to establish SK picglobal. SKC sold 49% equity in SK picglobal to PIC, and SKC holds only 51% equity. According to the industry, SKC and PIC want to sell 100% equity in SK picglobal. As a result, they are said to be sounding out domestic and foreign chemical companies and private equity funds (PEFs) on their interest in acquiring the company.
SK picglobal produces propylene oxide (PO), used as materials and supplies in manufacturing polyurethane (PU), and propylene glycol (PG), a raw material for cosmetics and pharmaceuticals. PO and PG are used in surfactants, moisturizers, cosmetics, and automobile interior materials. However, as China began producing PO and PG at low prices and supplying them to Korea, SK picglobal's performance deteriorated after the second half of 2022.
Earlier, in Apr., SK picglobal began restructuring its chemical business, including by disposing of shares in SK cebonich peroxide korea (SEPK), a hydrogen peroxide manufacturer and seller jointly established by SKC and Germany's Evonik, for 30.6 billion won.
An industry official said, "With market conditions so poor that the government is leading restructuring of the petrochemical industry, isn't SK Group broadly moving to streamline the petrochemical business?"