New executives enlisted with mission for turnaround
SK Group, the nation’s third-largest conglomerate, conducted a full-scale management shake-up on Tuesday, replacing heads of its key affiliates including SK Innovation and SK Telecom. Only SK hynix, the best-performing affiliate of the group, retained the current CEO Park Sung-wook.
“The new CEOs are tasked to turn around the business with creative and innovative new strategies,” the group said in a press release.
SK Group had long been expected to undergo a management reshuffle as the profitability of the group’s long-time core businesses, including energy and mobile phone services, has been sliding in recent years.
In a move to restore its faltering energy businesses, SK Group appointed Chung Chul-khil, CEO of IT solution provider SK C&C, as new head of SK Innovation.
SK Innovation, the holding company of the group’s energy business units, including refinery SK Energy, has been in a slump throughout the year, hit by worsening refinery margins amid falling oil prices.
Industry watchers said the 60-year-old Chung, who has built his reputation as a restructuring expert within the group, will drive business portfolio reorganization as a part of his risk management efforts, while also cutting costs. As of 2014, SK Innovation depends on the low-margin refinery business for 75 percent of its revenue.
The top management of SK Telecom, the nation’s top mobile phone service operator, was replaced with Jang Dong-hyun, who currently serves SK Planet as chief operating officer. SK Planet, a platform business operator, is the subsidiary of SK Telecom.
The group said Jang’s experiences in the platform business will help SK Telecom develop new business models. The mobile service provider has sought new income generators amid falling profitability in the saturated domestic market.
SK Group also increased the number of CEOs in their early 50s in a bid to make the organization younger overall.
Both the newly appointed SK Telecom CEO and SK C&C are in their early 50s, according to SK Group. In the past, CEOs of SK ― categorized as being one of the more conventional conglomerates in the country ― were typically in their late 50s or early 60s.
By Seo Jee-yeon ()
