anual report 2012 english we care for the future · 2018-10-27 · “chemistry for the future”...
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Annual Report 2012
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Earthcare
Healthcare
Sustainability
We Care ForThe Future
www.skchemicals.com
EarthcareA chemical company that gives toppriority to the environment.Preparing materials for a future when oil resources will be depleted, and
conducting research on new materials that our children can use without
causing harm to the environment, SK Chemicals is placing increased
emphasis on its vision of chemical production without environmental damage.
Message from CEO 06
Board of Directors 08
History Highlights 10
Vision/Mission Statement 12
R&D 14
Business 16
Environment-friendliness 30 Social contributions
SK Group 36
Subsidiaries 39Affiliates Global network
Financial Reports 42
Contents
HealthcareWe give top priority to the value of life.
Looking beyond cures for diseases by looking closely at diagnosis and prevention,
and thinking about the health and quality of life of mankind.
The Life Science of SK Chemicals cares for the “Welfare of Mankind.”
Greetings!
During the past year, SK Chemicals has continuously focused on its strategic targets
by completing the restructure of its businesses and selecting the growth engines of
the future in each business division. By reinforcing the competitiveness of its existing
businesses, visible results were achieved in the midst of a rapidly changing management
environment caused by the slowdown in market growth due to the financial crisis in
the US and Europe.
In order to maintain continuous growth in 2012, SK Chemicals decided to invest in the
polyphenylene sulphide (PPS) business, a core business of the next generation. Our
vaccine research project proceeded according to plan and we also secured the
continuity of our existing businesses by expanding our copolyester production capacity
and completing the annex to the Cheongju Plant.
However, we were unsuccessful in accomplishing our annual targets due to the global
economic recession. We will, therefore, increase our efforts to make a new leap
forward starting in 2013. To this end, we have set the 2013 sales target at KRW1,655.5
billion, and in order to achieve this target have we decided to follow three strategies:
First, we will improve the profitability of existing businesses. We will improve the
profitability of the Green Chemicals Division by reinforcing the competitiveness of the
core business and we will improve the profit structure of the Life Science Division to
ensure the continuous growth of this business by improving the
product portfolio and determining the business direction of blood
derivative products.
Second, we will accelerate the development of our new businesses.
We will achieve the planned targets of the PPS project and successfully
launch our products, including biomaterials, into the green materials
industry. We will achieve the vaccine R&D targets and successfully
achieve our growth projections.
Third, we will improve our management infrastructure by introducing
continuous improvements to our HR system and will modernise our
corporate culture to reinforce the power, culture and innovation of
our people. Furthermore, we will invigorate communication within
our organisation and will reinforce executive ability. Regarding the
management environment of 2013, it is expected that the low
economic growth will continue at home and abroad and therefore,
various social changes, including policy changes, can be foreseen.
Through these efforts we intend to establish our mid- to long-term
target of generating KRW2.4 trillion in sales by 2015. To this end,
over the next three years we plan to invest in areas, such as resins,
biomaterials, vaccines and blood derivatives.
2013 will become an important year in securing the resources for
mid- to long-term growth investments, and in commercialising the
products of the new projects.
The challenge to grow and change SK Chemicals will continue this
year. We sincerely hope that both shareholders and customers will
continue to support and encourage us.
Lastly, we wish all of you and your families the best of health and
happiness during the coming year.
Thank you.
Moon-Suk Lee, CEOIn-Serk Lee, CEO
Moon-Suk Lee, CEO In-Serk Lee, CEO
In 2013, SK Chemicals willput in a great deal of effortto enhance our existingbusinesses while launchingnew ones.
DearShareholders,Partners andCustomers
MESSAGE F
ROM C
EO
MESSAGE FROM CEO
06 07
BOARD OF DIRECTORS
Creating future value and transparent management withthe Board of Directors playing the central role
BOARD OF DIRECTORS
08 09
SK Chemicals is pursuing a Board-centred management structure to maximise
shareholder value and is practicing transparent management.
SK Chemicals has established an advanced corporate governance system by creating
and operating a secretariat to support the Board of Directors. The company has also
implemented the most sophisticated accounting control system in Korea to enhance
accounting transparency and has reinforced its auditing capabilities through the use of
an auditing committee.
SK Chemicals will make continued efforts to enhance the future value of the company
by creating a balanced management environment and enhancing the transparency of
its management activities with the intention of instilling confidence and trust in both
customers and shareholders.
Enhancing the transparency of corporate governance
SK Chemicals has established the most advanced corporate governance system in Korea
and is pursuing a Board-centred management structure to maximise shareholder profits.
To realise this management structure, the company increased the proportion of non-ex-
ecutive directors and formed various committees within the Board to thoroughly review
and verify the management activities of the company.
Enhancing accounting transparency
Through a partnership with a trustworthy and experienced accounting company, SK
Chemicals has established a new control system for accounting management and has
laid the foundation for transparency. Also, the company has required the CEO and CFO
to certify the accounting data so that shareholders and financial institutions can now have
a high level of confidence in our accounting system.
Reinforced auditing functions
SK Chemicals operates an auditing committee consisting only of non-executive directors.
By guaranteeing the full independence of this committee, the company provided it with
the ability and power to audit the Board of Directors and the CEO, who continue to
supervise overall management including accounting, thereby separating auditing from
management.
Ethical management by employees
SK Chemicals is not only pursuing transparent management to maximise shareholder
profit, but is also trying to maximise the common benefits to society by fulfilling all its
responsibilities and obligations to industry participants. To create a corporate culture in
which enterprises fulfil their social responsibility and practice win-win management.
The company is enforcing ethical management by employees so that everyone in the
company complies with the code of ethics.
BOARD O
F D
IRECTORS
Chang-Won Chey | Executive Director,
Vice Chairman and CEO.
Moon-Suk Lee |
Executive Director, CEO
In-Serk Lee |
Executive Director, CEO
Bo- Hyun Kang | Non-Executive Director,
Attorney at Law, Hwawoo law firm.
Tae-Shin Kwon | Non-Executive Director,
Vice Chairman of the Presidential Council
on National Competitiveness.
Gi-Ho Huh | Non-Executive Director,
Vice Chairman and CEO, HANIL Cement.
Deok-Geun Ahn | Non-Executive Director,
Professor, Graduate School of Interna-
tional Studies, Seoul National University.
1969
Established Sunkyong Textiles Ltd.
1976
Listed on the Korean stock exchange.Merged with Sunkyong Chemical Textiles Ltd
1978
Produced PET resin for the first time inKorea.
1984
Established an R&D Center.
1985
Acquired a textile factory in Suwon.
1987
Established SK CYTEC.Acquired Samshin Pharma Ltd.
1988
Established Sunbo Pharma Ltd.Renamed Sunkyong Industries Ltd.
1989
Completed construction of the PTA/DMTplant.Established the Life Science R&D Center.Developed PPS resin.
1990
Established a Petrochemical R&D CenterRenamed Sunkyong Pharmaceuticals Ltd
1991
Established SK Keris Ltd. in IndonesiaDeveloped the ginkgo extract preparation -Genexin®
1994
Developed the anti-arthritis patch, Trast®
Developed polyester adhesive
1998
Renamed SK Chemicals LtdEstablished SK NJC
1999
Released SUNPLA®, the first new drug inKorea (world’s first 3rd-generation platinumcomplex anticancer agent)Exported OMED® to EU, the first finished drugin Korea
2000
Spun off the polyester textile division established HUVIS Ltd
2001
Established SK Chemicals Qingdao Ltd. in ChinaDeveloped the environmentally safe high-performance PETG resin, SKYGREEN®
2002
Released Korea’s first natural drug, (JOINS®,an anti-arthritis agent)Established SK Eurochem Ltd. in Poland
2005
Established SK Chemicals Suzhou Ltd. in ChinaEstablished SK Pharma Beijing Ltd. in ChinaEstablished SK Utis Ltd. Merged with SK Pharmaceuticals LtdEstablished SK Petrochemical Ltd
2006
Merged with Dong Shin Pharma LtdDeveloped biodiesel production technology
2007
Merged with In2Gen Established Ningbo SKZhenbang Chemical Ltdstablished SK Chemicals Pharma Beijing Ltd.- Shanghai BranchReleased the anti-impotence drug, Mvix®
2008
Established Guilin SK Zhongning Bio LtdEstablished SK Chemicals GmbH in GermanyAcquiredUB Care, a healthcare solutions providerLicensing out SID530®, the 1st anti-cancermedicine in Korea, to Europe
2009
Established SK Syntec LtdEstablished ST Green Energy LtdDeveloped environmentally safe transparentheat-resisting co-polyester ECOZEN®
Licensed out NBP601® (a drug for hemophilia),Korea’s first bio-pharmaceutical drug to amultinational pharmaceutical company
2010
ECOZEN® won the Top 10 New Korean Technologies Award and the Silver Prize in the“Korea Technology Awards“Won the Minister’s Award in “Biodiesel National Green Technology Awards”Acquired equities in and merged with SK NJCaffiliatesSelected as the provider of vaccine productionequipment for cell culture
2011
Ground-breaking ceremony for the AndongVaccine PlantEcoLab acquired the Eco-friendly ArchitectureCertification (LEED Platinum Certification) andwon the Korean Architecture AwardECOZEN®, the world’s first bio-degradableheat-resistant transparent bio-plasticECOZEN® acquired US FDA food-contact approvalReceived the Grand Prize (Green ManagementDivision) in the Global Standard ManagementAwardsWon the Special CDP (Carbon Disclosure Project) PrizeReleased Embix S®, the world’s first film-typeanti-impotence drug
2012
NBP601® (a drug for hemophilia) won the Top10 New Korean Technologies Award and theMinister of Knowledge Economy Award Exported SID710® (an anti-dementia patch) to EU
History HighlightsBy possessing an insight into the future,
SK Chemicals grew together with the Korean economy
HISTORY HIGHLIGHTS
1960~1989 1990~1999 2000~2009 2010~
10 11
“Chemistry for the future” Green Chemicals Division.
The Green Chemicals Division is leveraging its world-class engineering
expertise and state-of-the-art production facilities to advance as a
leading global manufacturer of environmentally responsible materials.
To this end, SK Chemicals has selected bio-materials, composite
materials, high-performance materials and energy storage materials
as the four new core businesses, and is conducting aggressive R&D
activities.
“Life Science opening the door to happiness” Life Science Division.
The Life Science Division, focusing on healthcare products such as
pharmaceuticals and bio-technologies, is establishing itself as a total
healthcare company, providing solutions in all stages of healthcare
ranging from diagnosis of diseases to cures. It is also striving to make
inroads into the global market by developing innovative new drugs.
Since its establishment as Sunkyong Textiles in 1969, SK Chemicals has grown
through continuous change and innovation to become the chemistry/life
science enterprise representing Korea. SK Chemicals has set up a new mission
to “improve human health and protect the global environment,” and has
reorganised its business structure to focus on green chemicals and life science.
Capitalising on its worlds-best technology to provide differentiated
chemical/life science products and solutions, SK Chemicals is taking a step
forward toward being a global leading company providing environmentally safe
materials and total healthcare solutions.
Chemistry for the future andLife Science for happinessSK Chemicals’ innovation fortomorrow never stops.
Vision/Mission Statement
12 13
VISION/MISSION STATEMENT
[Green Chemicals] We are creating value for the future with technologies that conserve the environment.
SK Chemicals was the first to develop ECOZEN®, a transparent, heat-resistant bio-copolyester, proving that
the company possesses advanced technology for producing environmentally-friendly materials. Also, we
secured an independent technology for production of PLA, a biodegradable material. SK Chemicals is
transforming itself into a company representing the best in bio-chemistry. We are using our utmost efforts
to create value for the future by actively performing R&D in the fast-growing high-tech materials area, e.g.
engineering super-plastics like PPS, carbon materials and energy storage materials.
[Life Science] SK Chemicals is at the center of new drug development in Korea.
SK Chemicals’ R&D activities led to a turning point in the history of ‘new drug development’ in Korea. We
developed SUNPLA® - Korea's first new chemical drug, JOINS® - the first new natural drug in Korea, EMBIX®
- a new erectile dysfunction treatment drug, and NBP601® - the first new gene recombination drug for treat-
ment of hemophilia. SK Chemicals is leading the development of new chemical and natural drugs, and
biotechnology. As a result, SK Chemicals has developed the greatest number of new drugs in Korea.
Science for the future creates happiness formankind and conserves the environment
R&D
14 15
Research and DevelopmentSince the centre of our business thinking is human happiness and environ-
mental conservation, the R&D capabilities that SK Chemicals has accumulated
over the last few decades is truly astounding. SK Chemicals opened its Eco Lab
in 2010 and quickly became recognised as the best R&D Center in Korea,
creating synergies in the R&D of chemistry and life science.
Major achievements After 2000 * Obtained clinical phase I IND approval for influenza cell culture.
* ECOTRAN®,an eco-friendly engineering super-plastic PPS developed
* SID710® (Rivastigmine patch) obtained EU approval.
* ECOZEN®, a biodegradable transparent heat-resistant copolyester acquired
FDA FCN certification.
* Released a gastritis treatment drug (Promac® Granules).
* Developed a high-performance engineering plastic PCT (PURATAN®).
* SID530® (Docetaxel injection) obtained EU approval.
* NBP601® (a treatment drug for hemophilia) obtained clinical IND approval in
the US and Europe.
* Released Montelukast® ODF.
* Released Mirodenafil® ODF.
* Released an anticoagulant (Antithrombin® Injection).
* Acquired a license for an antihypertension drug (Estrotin® Tab).
* Released an antithrombotic drug (Renexin® Tab).
* Obtained approval of the U.S. FDA IND for the super-generic anti-cancer
medicine, SID530®.
* Concluded a technical (NBP-601®) export agreement with the Australian
company CSL.
* Developed an environmentally safe non-BPA toner resin.
* Developed a composite material component, combined with cold retention
panels for LNG vessels.
* Developed a super-cap electrolyte.
* Developed an optical absorbent for displays.
* Entered into an agreement with a European multinational pharmaceutical
company for licensing out/technology transfer of a newly modified anti-cancer drug.
* Developed technology for producing biodiesel.
* Released an anti-arthritis agent, JOINS®, Korea’s first new natural drug.
* Obtained approval of NEXAD® for hypertension.
* Released SKAD® for hypertension.
* Released PRANAIR® for asthma.
* Released Mvix® for erectile dysfunction.
* Developed thermoplastic polyurethane for a breathable film.
* Acquired a license for OAT (Organic Acid Technology), an engine coolant technology.
* Developed highly heat-resistant PREPREG®.
* Developed a liquid photopolymer for flexo printing plates.
* Developed a plasticizer-free, low-hardness thermoplastic polyurethane.
* Developed an organic semiconductor material for electrochemicals.
* Developed the technology for TMA (Trimellitic Anhydride) production.
* Developed Bivalant Metal Free Biocide.
* Developed environmentally safe water-based OPV (Overprint Varnish).
* Developed a new toner binder.
* Developed an environmentally safe polyester sound-absorbing and
heat-insulating material.
* Secured the technology for commercial production of CHDM.
* SKYGREEN®, a highly-functional and environmentally safe resin.
Before 1999 * Launched Korea’s first new drug, the 3rd-generation platinum complex
anti-cancer agent, SUNPLA®.
* Developed the gingko biloba extract blood circulation enhancer, GINEXIN®.
* Developed TRAST®, a patch of non-steroidal anti-inflammatory drugs (NSAID).
* Developed Omeprazole®.
* Developed industrial biocides.
* Developed PEN resins.
* Developed biodegradable aliphatic polyester resins.
* Developed thermoplastic polyurethane resins.
* Developed an anti-freeze composition.
* Developed a polyester adhesive.
* Developed PET resins for bottles.
Environment-Friendly Materials Solution Provider-ECOZEN®
-SKYGREEN® / PETG resins
-SKYPET® / PET resins
-Carbon fiber PREPREG®
-Polyester resins for adhesives
-High-purity solvent / materials for displays / electrolytic solution for super-high-capacity capacitors
- Materials & Chemicals for the Automotive Industry
-Biodiesel
-Composite materials
-Biomaterials
-High-performance materials
-Energy storage materials
With applications ranging from tableware to construction materials, chemistry is here to
stay in our daily lives. Chemistry has always been there for people. SK Chemicals is
concentrating on benefitting mankind by creating chemical products that enrich our lives
in a sustainable manner. We will produce products such as bio-degradable packaging
materials and bio-sourced materials for automobiles, which are lightweight and reduce
environmental impact in both the production and end-use sectors of the product life-cycle.
SK Chemicals with moving toward the future
Technology for EarthcareIntroduction to Green Chemicals
16 17
SK chemicals Annual Report 2012 GREEN CHEMICALS Division. -ECOZEN®
-SKYGREEN® / PETG resins
-SKYPET® / PET resins
-Carbon fiber PREPREG®
-Polyester resins for adhesives
-High-purity solvent / display materials / electrolytic
solution for super-high-capacity capacitors
-Materials for automobiles
-Biodiesel
In 2009, SK Chemicals successfully commercialised ECOZEN®, the world’s first
bio-copolyester resin using biomass materials. As an eco-friendly product using
bio-monomer, ECOZEN® has outstanding heat-resistance, chemical resistance and
transparency. So it is used to make a wide range of commercial and industrial
products such as electronic components and food storage containers. Recently
ECOZEN® has also been used in a wider range of applications, including premium
cosmetics and interior materials for automobiles.
The high-performance PETG resin SKYGREEN® is an environmentally safe material
without the environmental hormone bisphenol A. Because of its outstanding safety,
transparency and chemical resistance, it is quickly replacing existing materials,
such as PC, PMMA and PVC. Also, it has excellent processability and moldability
and is being used for various purposes ranging from household items like containers
for cosmetics to industrial materials like electronic parts, construction materials
and optical films.
SKYPET® resin for bottles, which SK Chemicals began to produce for the first time
in Korea in 1978, acquired US FDA approval in its early stage, and its quality has
been globally recognized since then, e.g. acquiring approval of global beverage
companies like Coca Cola and Pepsi Cola. SK Chemicals is capitalizing on this quality
to concentrate on development and production of high added-value PET resins.
SKYPET® / PET resinsThe first PET for bottles in Korea
18 19
SKYGREEN® / PETG resinsHigh-performance eco-friendly materials
Carbon fiber is a material that is up to 10 times stronger than steel but weighs only
1/5th as much. PREPREG® is a sheet-like composite material that combines
carbon fibre with reinforced fibers in advance. PREPREG® is used in a wide variety
of areas ranging from sports and leisure, including golf clubs, fishing rods and
bicycles to parts for high-tech industrial products such as airplanes, automobiles
and industrial robots. More recently, it is being used in an increasing number of
areas, such as blades for wind power generation and concrete structure reinforcement.
SK Chemicals recently entered into a partnership with Mitsubishi Rayon, a global
supplier of carbon fibre, thus economically securing a source of high-quality raw
materials and has commenced marketing for PREPREG® products in earnest.
Carbon fiber PREPREG®
Secured competitiveness through global partnership
ECOZEN®
Commercialised for the first time in the world
SK chemicals Annual Report 2012 GREEN CHEMICALS Division. -ECOZEN®
-SKYGREEN® / PETG resins
-SKYPET® / PET resins
-Carbon fiber PREPREG®
-Polyester resins for adhesives
-High-purity solvent / display materials / electrolytic
solution for super-high-capacity capacitors
-Materials for automobiles
-Biodiesel
20 21
As high-molecular-weight polyester resins have excellent flexibility and adhesiveness,
they have been used for coil coatings and can coatings. They are eco-friendly and
contain no environmental hormones. Accordingly, these materials are attracting
attention as adhesives or coating resins in a wide variety of products. Due to their
unique properties their application has been extended to imagingmaterials including
binders for the toners of laser printers and high-speed copy machines, and binders
for various high-performance ink binders.
Polyester resins for adhesives
Materials for automobiles Sound-absorbing insulation materials made of environmentally friendly and
recyclable polyester fibre are used in automobile construction and are currently
supplied to domestic car makers such as Hyundai, Kia and GM. We are also working
with domestic automobile manufacturers to use ECOZEN® for displays and interiormaterials due to its excellent transparency combined with high temperature and
excellent chemical resistance.
Automobile manufacturers and component suppliers are also showing great interest
in other SK Chemicals products, such as the bio-based PLA plastic and the PPS
advanced engineering plastic. SK Chemicals’ automotive materials will grow in both
North America and Europe as the prime choice when designing green and high-
performance components. For similar reasons, PET-based sound-absorbing materials
made by SK Chemicals also have applications in building and construction in many
markets, including North America and Europe.
High-purity solvent is used in areas such as instrumental analysis, the composition
of ultra-precise chemical goods and in the electronic and bio-technology industries.
SK Chemicals exports high-purity solvent to the Asian market, including China, that
is made using its own technology combined with technical assistance from the
US-based company, Honeywell. The company is currently focused on display
materials such as LCD and PDP displays based on organic synthesis technology, in
addition to the high-capacity electrolytic solution business, which is expected to
grow rapidly thanks to the growing renewable energy and electric car markets.
High-purity solvent / display materials / electrolyticsolution for super-high-capacity capacitors
Biodiesel is a next-generation fuel that is quickly emerging as a replacement for
petroleum-based diesel. It is a methyl ester manufactured by the reaction between
vegetable oil and methanol. SK Chemicals is supplying the biodiesel it produces to
refiners for the manufacture of BD5 (95% light oil + 5% biodiesel), which is currently
distributed in Korea. Since introducing ‘EcoPrime’, a product it developed with its
own technology in 2008, SK Chemicals has developed a subsidiary in Singapore that
specialises in trading materials to guarantee a stable supply of high-quality raw
materials, and is now considering entering the palm oil plantation business from a
mid-to-long-term perspective.
Biodiesel
SK chemicals Annual Report 2012 GREEN CHEMICALS Division. New businesses -Composite materials
-Biomaterials
-High-performance materials
-Energy storage materials
In line with the trend for lighter materials that improve fuel efficiency while also
being recyclable in the automotive industry. SK Chemicals has been taking advantage
of its PREPREG® product, a composite material that is both lighter and more
functional than metals and which is increasingly used in automobiles, to develop
composite materials for other key domestic industries such as electronics,
shipbuilding and industrial material industries. Also, the company has independently
successfully developed PCT (Polycyclohexylene Dimethylene Terephthalate), a
polyester-series engineering super-plastic, and has been capitalising on this
high-performance plastic to expand its business scope to include compounds.
Utilising its own technologies in composites and compounds, and cooperating with
overseas leading companies, SK Chemicals is planning to secure globally competitive
technologies, and transform the composite material business into a new growth engine.
Composite materials
High-performance materials SK Chemicals independently developed PPS (Poly Phenylene Sulphide), a kindof engineering super-plastic, and is establishing a solid foothold in the globalmarket for high-performance materials. SK Chemicals took the advantagesof its differentiated manufacturing processes technology to successfullydevelop PPS without chlorine, which is known to be a harmful substance. Thecompany joined hands with Teijin, a global enterprise, and installedlarge-scale PPS production facilities, and quickly became one of the top threePPS makers in the world.
Biomaterials made from renewable biological resources will replace petroleum-based
materials. They are attracting global attention as a solution that will assist in coping
with the future depletion of oil. As materials that will reduce CO2 emissions and
pernicious waste, this market is recently expanding to include packing materials,
fibres, automobiles and electronic products.
Since 2010, SK Chemicals has been producing PLA (Polylactic acid), a typical and
useful biomaterial. Our PLA products are made of raw materials extracted from
plants that are not genetically manipulated. They are 100% biodegradable plastics
that naturally disintegrate if a certain temperature and humidity are maintained.
Biomaterials
In line with the invigoration of renewable energy and the proliferation of smart grids,
SK Chemicals is considering the energy storage materials and systems businesses,
which are expected to grow in the future. Accordingly, we have secured the necessary
technologies and have selected the material business related to OLED and lithium
ion batteries. Both are technically highly relevant and commercially attractive, and
we have been conducting R&D and commercialisation activities in these areas.
Energy storage materials
22 23
New Challenge
SK Chemicals has selected several promising businesses for future development
and is focusing on them with the aim of achieving continuous growth for the next
generation of products. In accordance with its business philosophy, the company
has chosen eco-friendly plastics and composite materials, which are expected
to grow rapidly in the future, as well as high-performance and energy-storage
materials for its mid-to long-term core businesses.
Green ChemicalsNew businesses
- Synthetic drugs
- Natural products
- Biomedicine
- New healthcare
- Formulation technology
Science for HealthcareIntroduction to Life Science
24 25
Total Healthcare Solution Provider
Healthy life is the long-cherished dream of mankind. SK Chemicals has never relented in
its effort to realise this dream. At a time when the term ‘new drug development’ was
unfamiliar, SK Chemicals developed the first new drug in Korea. But we were not
content with this achievement, and have achieved good results in natural drugs and
biomedicine. We are producing the best results in a new area called “cell culture vaccine.”
From therapeutic drugs to vaccines that prevent diseases,
SK Chemicals’ challenge is creating hope for everyone.
When SK Chemicals succeeded in developing Korea’s first new drug, Sunpla® in
1999, it opened a new chapter in synthetic drugs. In 2007, it successfully developed
a new impotence cure, Mvix®, ranked first in the International Index of Erectile
Function (IIEF), and developed Mvix® S, the world’s first film-type impotence cure
with enhanced convenience, in 2011.
Also, SK Chemicals continues to develop new drugs for such diseases as fibrosis,
benign prostatic hyperplasia and diabetes, by securing outstanding research
manpower and making bold R&D investments.
Synthetic drugs
SK chemicals Annual Report 2012 LIFE SCIENCE Division -Synthetic drugs
-Natural drugs
-Biomedicine
-New healthcare
-Formulation technology
26 27
Mvix® is the impotence drug developed by SK Chemicals. It prides itself on powerful efficacy, i.e. No. 1
in the International Index of Erectile Function (IIEF). SK Chemicals introduced the world’s first
film-type impotence cure Mvix® S in 2011, and the enriched film-type formulation Mvix® S 100mg in
2012. The company now has a diverse portfolio of formulations. Mvix® S improved the existing Mvix®
formulation innovatively, and made it thin and light enough to go into a wallet. As it maximises
portability and ease of administration, it has been favourably received in the market.
The first natural drug, Joins®, proposed new possibilities in drug development by
enabling the treatment of the root cause of arthritis with a mechanism that
suppresses the destruction of cartilage as well as providing pain-relief and
anti-inflammation effects.
Ginexin®, a blood circulation enhancer that occupies the No. 1 market share, is the
representative brand of SK Chemicals. In 2010, the company also introduced
Renexin®, an upgrade of Ginexin® with an enhanced blood vessel expanding
solution, strengthening the company’s competitiveness in the blood circulation
enhancer market.
Natural drugs
Korea’s first natural drug, Joins®, proved in a clinical trial involving five general hospitals
(including Seoul National University Hospital) to provide the same level of anti-coagulation and
pain-killing effects as conventional anti-inflammatory analgesic drugs, yet has fewer side-effects.
In addition to its efficacy in the enhancement of blood circulation, immune-modulating activities
and protection of joints was also proven. It is regarded as an effective medicine for treatment
of arthritis.
Korea’s first natural drug - Joins® tablet
Successfully developed the world’s first film formulation - Mvix® ranked No. 1 in IIEF
A new business, which combines Information Technology (IT) with the healthcare
business, is expected to grow rapidly. In 2008, SK Chemicals acquired UBCare, a
medical IT specialist, and solidified its foundation for U-healthcare. Recently the
company entered into a partnership with a leading medical institution to expedite
new healthcare businesses, such as the genome analysis business and cancer
diagnosis business. The new healthcare business will be the core business that will
help SK Chemicals become a total healthcare solution provider in that it creates
values in new areas such as diagnosis of diseases and medical infrastructure, in
addition to treatment and prevention of diseases.
New healthcare
SK chemicals Annual Report 2012 LIFE SCIENCE Division -Synthetic drugs
-Natural drugs
-Biomedicine
-New healthcare
-Formulation technology
28 29
SK Chemicals is producing excellent results in developing new drugs to be exported
globally by developing innovative formulation technologies. In particular, the
platform technology has made SK Chemical a leader in patch development. In 1994
the company developed the world’s first patch-type cure for arthritis, Trast® that
remains effective for 48 hours after application. In addition, a dementia patch,
SID710®, was first approved recently for generic sale in Europe, and global
marketing and exports of SID710 have begun in earnest.
In addition, the excellent cure for gastric ulcers, OMED®, whose safety was
improved by an innovative technology, was globally recognised. It became the first
Korean finished drug exported to Europe in 1999, and has since been sold in most
EU countries.
Formulation technology
SK Chemicals now has a wide product portfolio by continuously investing in
research on premium vaccines, blood derivatives and recombination drugs, which
will be the driving force for the Life Science business of the future.
In particular, when it comes to next-generation technologies, the cell culture
influenza vaccine, SK Chemicals obtained KFDA approval for clinical tests for the
first time in Korea. With this, the technical supremacy of SK Chemicals was
recognised. The company also completed building a state-of-the-art vaccine plant
in Andong. If premium vaccines, including the cell culture influenza vaccine whose
production time has been drastically reduced, are commercialised, they are
expected to contribute to gaining independence in vaccines. Also, we merged
with the bio-venture In2Gen and are now conducting research on recombination
medicines. In 2009 we entered into an agreement with a multinational pharmaceutical
company for exporting the gene recombination drug for hemophilia that we
independently developed, and are conducting clinical tests around the world.
Biomedicine
Trast® is a patch-type cure for knee osteoarthritis that has been a steady seller since its release
in 1996. As it is applied to the knee joint where the medication works directly on the knee, it
minimises the side effects of existing pills while maximising treatment effects. The anti-in-
flammatory analgesic drug, Piroxicam, is delivered to the affected knee at the same level of
concentration for 48 hours using the Trans-dermal Drug Delivery System (TDDS). The medicinal
effect continues for 48 hours after the patch is removed.
A powerful cure for knee osteoarthritis - Trast®
-Environment-friendliness and sustainability management
-Social contributions
Creating Shared Value for SustainabilityEnvironment-friendliness and social contributions
30 31
Thinkabout
the Environment & People
Chemistry for the environment and life science for happiness start with the
sincerity of employees. The philosophy of SK Chemicals, “thinking about the
environment and people,” goes beyond ‘business’ to ‘culture.’
To make a better environment to live in, and deliver happiness to more people.
Since it declared its environmental management
policy in 2009, SK Chemicals has been working hard
to fulfill its own internal environmental goal, which it
has tagged “Green Triple 40”, i.e. 40 hours of social
contribution activities, reduction of carbon emissions
by 40% and having eco-friendly sales account for 40%
by 2020. SK Chemicals is practicing enterprise-wide
sustainability management in all areas including
production, product design and engineering, and
corporate culture, i.e. “Green Processes” based on
the introduction of eco-friendly facilities, “Green
Products” for increasing the portion of eco-friendly
materials, and “Green Culture” for encouraging
voluntary participation of all employees.
For details on SK Chemicals’ ‘Sustainability Management’, please refer to the
‘Sustainability Management Report’ found at www.skecoweb.com.
We consider production, products, cultureand the environment
GREEN TRIPLE 40ENVIRONMENT -FRIENDLINESS
SK Chemicals staged its “Save the environ-
ment and add to happiness” campaign, in
which all employees participated, to make
eco-friendly activities part of their lives, and
is building a system for converting the
eco-friendly activities of individual employees
into points that can then be donated.
Also, the employees of SK Chemicals are
helping to clean the creeks and streams
near their workplaces. The company is
leading in improving the local environment
by encouraging employees’ participation.
Eco Lab, which houses SK Chemicals’ office building and laboratory, is regarded
as the best eco-friendly building in Korea. The Eco Lab acquired the Eco-friendly
Architecture Certification (LEED Platinum Certification), the highest grade, and
received the highest points (110 points out of 136 points) in the Korean Government’s
Green Building Certification Criteria (GBCC). It also won the Korean Architecture
Award in the civilian sector in 2011.
The Eco Lab saves about 40% of the energy costs used per year by a conventional
building. As it reduces energy consumption by 44%, it is excellent in assisting the
prevention of global warming. The CO2 emissions of this building are 33% less
than existing traditional buildings, which is equivalent to planting 94,000 pine
trees. This building uses 63% less water resources than an equivalent traditional
building, which results in a reduction of 10,000 tons of water purification per year.
The 101 environmentally-friendly technologies applied to the Eco Lab are truly
forward thinking and impressive. The interior has an artificial wall fountain that
not only is aesthetically pleasing but more importantly provides natural
air-conditioning and humidification. The air inside the building flows in a natural
manner as a result of the temperature difference between the ceiling and floor.
The solar modules installed on the building facade and the automatic indoor
environment control system are so advanced that they are being benchmarked
by leading architectural companies in Korea. So far more than 2,800 people have
visited the Eco Lab expressly to see its eco-friendly design features.
The best eco-friendly building in Korea: Eco Lab
1 GREEN CULTURE
SK Chemicals introduced a greenhouse
gas management system to its plants in
Ulsan, Cheongju, Osan and Ansan for
integrated management of energy and
greenhouse gas emissions in the production
process. Also, the Ulsan Plant operates
an ‘Eco Green boiler’ that converts wood
chips into industrial energy, and uses
liquid and gaseous bio-energy as fuel.
The company is making efforts to recycle
resources and minimise greenhouse gas
emissions.
2 GREEN PROCESS
From bio plastics utilising raw materials
extracted from natural substances, and
lightweight materials that save fuel for
automobiles, to biodiesel extracted from
plants and waste cooking oil, SK Chemicals
has the most diverse eco-friendly product
portfolio among Korean companies. In
addition, we started the greenhouse gas
emission business. We are carrying out
a project to turn the Ulsan Plant into a
carbon-neutral plant that does not use
any fossil fuel by 2020.
3 GREEN PRODUCT
32 33
SK Chemicals is doing its part to give back to society by engaging
in or initiating various eco-friendly social contribution activities
such as ‘A.cure’ in which employees volunteer to clean local
creeks and streams, and the ‘Happy Green Class’ in which
employees visit elementary schools to teach the importance of
the environment. We are also contributing to creating an
eco-friendly culinary culture by encouraging employees to use
organic agricultural products.
In 2009, SK Chemicals opened a “Silver Theater” in Jongno,
the older central business district of Seoul, to support a
sound cultural life for the elderly, and has provided ongoing
support since then. The Silver Theater allows senior citizens
57 years of age and older to watch a movie for only KRW2,000.
The theater has been successful and has attracted a total of
530,000 senior citizens to visit so far.
The “Well of Happiness” initiative is designed to support
developing countries that have insufficient infrastructure.
For example, the group helped complete the first well
located along the Tanya River in Kenya. This has since
provided 7,300 tons of drinking water for a total of three
regions. SK Chemicals is further planning to contribute to
improving the quality of life of residents of developing
countries by providing Scheffler Reflectors and watercones
in addition to “wells of happiness.”
2 Well of Happiness
3 Silver Theater 4 Environmental Responsibility
Hope Maker is an enterprise-wide campaign aimed at
improving the welfare of the socially weak such as orphans
and children and senior citizens in the low-income bracket.
We entered into an agreement with 14 welfare centres around
the country, and donate the funds raised voluntarily each month
by employees and the matching funds of the company.
The employees also visit the welfare centres every week to
help with their meals and provide companionship.
1Hope Maker
SOCIALCONTRIBUTIONS
SK Chemicals is trying to enhance the happiness of all mankind including local
communities as well as customers and employees. Indeed, we are doing our
part to give back to society by engaging in a variety of social contribution
activities for the underprivileged in Korea and abroad from local communities
in Pangyo and Ulsan where our workplaces are located, to residents of
developing countries in Africa. SK Chemicals has chosen “sustainability, social
welfare and sharing” as the three themes of its social contribution activities.
We pursue happiness bysharing with society
34 35
SK Chemicalswww.skchemicals.com
SK Innovation www.skinnovation.com
SK Global chemistry www.skglobalchemical.com
SKCwww.skc.co.kr
SK Gaswww.skgas.co.kr
SK Energy www.skenergy.com
SK Lubricantswww.sklubricants.com
SK E&Swww.skens.com
For more than 60 years, both SK and the Korean economy have striven together to create a
more bountiful society for all. As environmental issues have risen to the forefront of today’s
society concerns, we will continue on by investing our best efforts to not only create wealth
for society, but to do so in an environmentally sound and sustainable manner. With this
approach, SK intends to do its part to fulfill its social responsibilities while leading the market
with global competitiveness and creating ever more stakeholder value.
The Power to Create a More Bountiful Future - ‘SK’
Energy/Chemistry IT/Semiconductors
SK HoldingsSK Group at a glance www.sk.com
Marketing/Service
SK Telecomwww.sktelecom.com
SK C&C www.skcc.com
SK Hynixwww.skhynix.com
SK Telesyswww.sktelesys.com
SK Communicationswww.skcommunications.com
SK Planetwww.skplanet.com
SK Broadbandwww.skbroadband.com
SK Telinkwww.sktelink.com
SK Networkswww.sknetworks.com
SK Shippingwww.skshipping.com
SK Securitieswww.priden.com
SK E&Cwww.skec.co.kr
SK Group36 37 38
SK Chemicals Qingdao Co., Ltd.
12, Jiangshan Middle Road, Qingdao
Economic & Technical Development Zone,
Shandong, China
Tel: 86-532-8676-3281~3 Fax: 86-532-8676-3190
SK Chemicals Suzhou Co., Ltd.
#188, Jiangxingdonglu, Wujiang economic
development zone, Jiangsu Province, China
215217
Tel: 86-512-8516-2002 Fax: 86-512-8516-2007
SK Pharma Beijing Co., Ltd.
23F, SK Tower, No.6 Jia, Jianguomenwai Avenue,
Chaoyang District, Beijing, China(100022)
Tel: 86-10-5924-0909 Fax: 86-10-5924-0924
SK Chemicals Shanghai Office
Shanghai Mart Room No. 1505, Shanghai Mart,
2299 Yan An Road(W) Shanghai China (Post
Code : 200336)
Tel: 86-21-6295-7070 Fax: 86-21-6270-1606
SK Chemicals Guangzhou Office
Room No.1510-1511, South Tower, World Trade
Center, No.371, Huan Shi Dong Road, Guangzhou,
China
Tel: 86-20-8730-0891 Fax: 86-20-8730-0598
SK Chemicals GmbH
Topas 1, Mergenthalerallee 77, 65760 Eschborn
Germany
Tel: 49-6196-470210~11 Fax: 49-6196-470219
SK Chemicals Frankfurt Office
Topas 1, Mergenthalerallee 77, 65760 Eschborn
Germany
Tel: 49-6196-470210~11 Fax: 49-6196-470219
SK Chemicals Tokyo Office
Toranomon Roots21 Bldg., 7-5, Toranomon 3-
Chome, Minato-Ku, Tokyo 105-0001, Japan
Tel: 81-3-5733-6095/6 Fax: 81-3-5733-6097
ST Green Energy Pte Ltd.
22 North Canal Road #03-03 Singapore 048834
Tel: 65-6602-6366 Fax: 65-6533-3023
SK Chemicals America, Inc.
2 Park Plaza Suite 1250, Irvine, CA 92614
Tel: 1-949-336-8088 Fax: 1-949-336-8089
SK U.S.A, Inc.
55 E 59th Street, 11th floor, New York, NY 10022
Tel: 1-212-583-2430 Fax: 1-212-583-2461
SubsidiariesAffiliatesGlobal Network
SK Chemicals makes happiness together
- subsidiaries and affiliatesSK Chemicals Global NetworksSubsidiaries
We develop happier technologies and make products that encourage us to think more
about nature and people. Together with SK Chemicals, we will enhance the value and
quality of life, and make all customers happier. To create a greater happiness
together, SK Chemicals and its subsidiaries/affiliates will make further efforts.
Green Chemicals Division.
SK CYTEC UB care TSK waterSK E&C
Domestic subsidiaries/affiliates
Overseas subsidiaries/affiliates
SK Gas
SKPharmaBeijing
SKChemicalsGmbH
SK Syntec
SK Qingdao
SKCA
SK Suzhou ST Green Energy
LifeScienceDivision.
SK E&SBusiness areas - constructionand engineering services
SK GasBusiness areas - LPG import,storage and sale
TSK waterBusiness areas - environmen-tal infrastructure operations
SK CYTECBusiness areas - ultravioletcuring resins and polyesterresins for powder coating
SK Chemicals QingdaoBusiness areas - PREPREG®
SK Chemicals SuzhouBusiness areas - polyesteradhesives, PETG inner packing
ST Green EnergyBusiness areas - tradingin biodiesel raw materials
SK SyntecBusiness areas - manage-ment consulting
UB careBusiness areas - EMR solutions, distribu-
tion of medical devices, pharmaceutical
marketing solutions, and e-commerce
SK Pharma BeijingBusiness areas - Trast®,albumin
SK Chemicals GmBHBusiness areas - pharma-ceuticals
SKCABusiness areas - SKYGREEN®,ECOZEN®
China Germany
Japan
Singapore
U.S.A
40 4139
Irvine New York
Frankfurt
Beijing
Shanghai
Qingdao
Guangzhou
Singapore
TokyoSuzhou
Head Offi ce
Ansan Osan
Cheongju
Ulsan
Andong
Financial Reports Audit report
Financial highlights
Statement of financial position
Consolidated statement of financial position
Income statement
Consolidated income statement
Statement of retained earnings
Overall conditions and sales
Shares and investments
Organisation
Essential business the company
42 43
Audit report of the external auditor
SK Chemicals Annual Report 2012
To the shareholders and Board of Directors of SK Chemicals
March 10, 2013
The auditor audited the attached Statement of Financial Position of SK Chemicals ending on
December 31st, 2012 and December 31st, 2011, and the All-inclusive Balance Sheet, the Statement
of Changes in Equity and the Statement of Cash Flow of the two fiscal years ending on the same
dates. The management of the company is responsible for preparing the financial statements of
which the auditors are responsible for auditing and expressing their opinions.
The auditor conducted the audit according to the Generally Accepted Auditing Standards of Korea.
These standards require the auditor to plan and conduct the audit so that it can be reasonably
confirmed that the auditor did not significantly distort the financial statements. The audit includes
verification based on collection of evidence of the amounts in the financial statements and
disclosures. Also, the audit includes not only evaluation of the financial statements, but also
evaluation of the accounting principles and significant accounting estimates that the management
applied in preparing the financial statements. The auditor who conducted the audit believes that
reasonable evidence is provided for expressing the audit opinion.
The auditor believes that the above financial statements appropriately depict the financial condition
of SK Chemicals as of December 31st, 2012 and December 31st 2011, and the financial performance
and cash flow of SK Chemicals in the fiscal years ending on the same dates in terms of materiality
according to the Generally Accepted Auditing Standards of Korea.
10th floor, Gangnam Finance Center, 737, Yeoksam-dong, Gangnam-gu, Seoul
CEO of Samjong KPMG LLC.
Gyo-Tae Kim
44 45
Audit report of the auditing committee
Financial Reports
The auditing committee has audited the accounting and business activities of the 44th fiscal year
(January 1st , 2012 to December 31st, 2012), and reports the following:
1. Outline of the auditing method
We viewed the accounting books and related documents for auditing, reviewed financial statements,
consolidated financial statements and supplementary schedules, and if necessary, applied
appropriate auditing procedures, including, but not limited to, comparisons, due diligence,
observation, and inquiries.
For business auditing, we attended Board of Directors meetings and other management meetings
and, where necessary, received business reports from directors.
2. Matters concerning the Statement of Financial Position, the Consolidated Statement of Financial
Position, the All-inclusive Income Statement, and the Consolidated All-inclusive Income Statement
The Financial Statement, the Consolidated Financial Statement, the All-inclusive Balance Sheet,
and the Consolidated Balance Sheet reveal the assets, liabilities, revenues, profits and losses of
the company according to law and the articles of incorporation.
3. Matters concerning the Statement of Retained Earnings
The Statement of Retained Earnings is prepared appropriately according to laws and the articles
of incorporation.
4. Matters concerning the Sales Report
The Sales Report accurately describes the condition of the company according to law and the
articles of incorporation.
February 22, 2013
SK Chemicals
Chairman of the Auditing Committee Tae-Shin Kwon
SK Chemicals Annual Report 2012
NET INCOME (Unit: KRW1 million)
2011 (30,836)
2012 (39,325)2010 (39,921)
TOTAL ASSETS (Unit: KRW1 million)
2011 (2,033,752)
2012 (2,194,266)
2010 (1,811,664)
2010 (908,103)
TOTAL SHAREHOLdER’S EQUITY (Unit: KRW1 million)
2011 (922,126)
2012 (948,258)
46 47
Financial highlights
Financial Reports
2012 2011 2010
Sales 1,476,191 1,546,108 1,334,515
Net income 39,325 30,836 39,921
Total assets 2,194,266 2,033,752 1,811,664
Total Stockholder’s Equity 948,258 922,126 908,103
SK Chemicals is concentrating on improving the profitability of its existing businesses with a focus on the Green
Chemicals Division and the Life Science Division while also ensuring that new business ventures will successfully
penetrate their respective markets.
The Green Chemicals Division relies on the technologies and competencies we have accumulated in the resin and
precision chemical businesses. Going forward, we have established a master plan for growth in four key growth
areas: composite materials, high-performance materials, biomaterials and energy-storage materials. We are now
endeavoring to commercialise these new businesses to become an eco-friendly materials solution provider.
When considering the Life Science Division, we are capitalising on our successes in the domestic market to transform
ourselves into a “total healthcare solution provider.” We are therefore solidifying our market dominance in the
domestic pharmaceutical industry and taking advantage of our new drug R&D capabilities to expand our business
to include vaccines and new healthcare propositions while attempting to make inroads into overseas markets.
In 2012, to secure a mid- to long-term growth engine, we completed the expansion of CHDM production earlier
than planned and began commercial production. We made new investments in the Andong vaccine plant, tried to
establish a PPS joint venture, and commenced clinical trials of a cell culture vaccine (a first for Korea). Also, in
order to transfer external competencies to our internal structure, we have steadily built a foundation for sustainable
growth by forging strategic partnerships with global companies.
Based on these growth efforts and the reinforcement of existing businesses, in 2012 our sales reached KRW1,476.2
billion, our operating profit was KRW48.4 billion, and our net income was KRW39.3 billion. SK Chemicals will
continue to make efforts to ensure the satisfaction of all shareholders through growth and development.
TOTAL SALES (Unit: KRW1 million)
(Unit: KRW1 million)
2011 (1,546,108)
2010 (1,334,515 )
2012 (1,476,191)
SK Chemicals Annual Report 2012
48 49
44th period (1/1/2012 ~ 12/31/2012) 43rd period (1/1/2011 ~ 12/31/2011) 42nd period (1/1/2010 ~ 12/31/2010)
I. Sales 1,476,191,492,605 1,546,107,694,525 1,334,514,621,732 II. Cost of sales 1,188,949,912,636 1,245,669,454,486 1,037,383,909,381 III. Gross profits 287,241,579,969 300,438,240,039 297,130,712,351 IV. Selling, General Administrative Expenses 238,851,298,084 235,789,777,579 228,216,839,151 V. Operating Income 48,390,281,885 64,648,462,460 68,913,873,200 VI. Other Income 22,084,239,553 15,311,190,684 17,893,092,414 VII.Other expenses 12,012,635,028 22,358,393,477 28,832,347,996 VIII.Financial income 20,274,808,240 19,380,120,301 20,110,564,634 IX. Financial costs 48,395,945,686 45,153,131,277 40,379,686,185 X. Income before taxes 30,340,748,964 31,828,248,691 37,705,496,067 XI. Corporate income tax (8,983,813,070) 992,431,188 (2,215,068,415)XII.Net income 39,324,562,034 30,835,817,503 39,920,564,482
Income statement
Consolidated income statement
Statement of retained earnings
(Unit: KRW)
44th period (1/1/2012 ~ 12/31/2012) 43rd period (1/1/2011 ~ 12/31/2011) 42nd period (1/1/2010 ~ 12/31/2010)
I. Sales 9,160,084,617,619 8,864,966,852,448 1,459,093,251,591 II. Cost of sales 8,474,075,122,254 8,147,038,146,530 1,132,569,544,135 III. Gross profits 686,009,495,365 717,928,705,918 326,523,707,456 IV. Selling, General Administrative Expenses 495,385,357,796 487,056,353,765 261,685,441,174 V. Operating Income 190,624,137,569 230,872,352,153 64,838,266,282VI. Other income 220,979,003,010 168,550,476,967 199,610,135,557VII. Other expenses 246,097,102,358 153,353,287,797 33,123,367,996VIII. Financial income 135,749,270,275 148,923,377,170 17,442,433,050IX. Financial costs 117,681,411,874 193,738,174,283 38,576,273,313X. Income from Investments in Associates 7,336,694,680 75,696,898,882 18,271,759,597XI. Continuing income and loss before income taxes 190,910,591,302 276,951,643,092 228,462,953,177XII. Taxes on income from continuing operations 34,323,759,661 49,510,666,004 23,271,086,391XIII. Income from Continuing Operations 156,586,831,641 227,440,977,088 205,191,866,786XIV.Income from discontinued Operations - (36,511,260,753) 18,928,795,699XV. Consolidated net income 156,586,831,641 190,929,716,335 224,120,662,485
(Unit: KRW)
I. Retained Earnings before Appropriations 712,878,903,075 678,649,008,300 697,669,792,864
1. Unappropriated Retained 678,174,362,725 654,948,554,699 660,957,092,531 Earnings carried over from prior years
2.Actuarial Gains and Losses (4,620,021,684) (7,135,363,902) (3,207,864,149)
3.Net income 39,324,562,034 30,835,817,503 39,920,564,482
Ⅱ. Transfer from Voluntary Reserves 7,333,333,333 8,666,666,660 8,666,666,660
Ⅲ. Appropriations of Retained Earnings (25,141,312,235) (9,141,312,235) (51,387,904,825)
1.Legal Appropriated (831,028,385) (831,028,385) (1,035,264,075) Retained Earnings
2.Reserve for research (16,000,000,000) - (40,000,000,000) and HR development
3.Dividend (8,310,283,850) (8,310,283,850) (10,352,640,750)
Dividend per share (%)
· Common shares: KRW400 (8%) · Preferred shares: KRW450 (9%)
Ⅳ. Unappropriated Retained Earnings 695,070,924,173 678,174,362,725 654,948,554,699 - carried forward to subsequent year
44th period (1/1/2012 ~ 12/31/2012) 43rd period (1/1/2011 ~ 12/31/2011) 42nd period (1/1/2010 ~ 12/31/2010)
(Unit: KRW)
44th period (as of December 31, 2012) 43rd period (as of December 31, 2011) 42nd period (as of December 31, 2010)
Assets:
I. Current assets: 642,506,626,344 631,159,236,354 535,216,041,567
Liquid Assets 402,651,480,639 406,186,961,732 343,417,307,580
Inventory 239,855,145,705 224,972,274,622 191,798,733,987
II. Non-current assets: 1,551,759,080,995 1,402,592,304,383 1,276,447,881,372
(1) Investments and Others 810,507,232,785 819,268,208,854 782,933,144,411
(2) Tangible assets 690,136,182,542 547,945,079,731 454,272,210,809
(3) Intangible assets 41,845,834,327 27,850,538,457 32,532,901,342
(4) Other non-current assets 9,269,831,341 7,528,477,341 6,709,624,810
Total assets: 2,194,265,707,339 2,033,751,540,737 1,811,663,922,939
Liabilities:
I. Current liabilities: 476,538,657,736 480,244,409,216 707,999,275,486
II. Non-current liabilities: 769,469,070,324 631,381,127,130 195,561,400,334
Total liabilities: 1,246,007,728,060 1,111,625,536,346 903,560,675,820
Shareholders’ Equity:
I. Capital stock: 118,300,860,000 118,300,860,000 118,300,860,000
II. Capital surplus: 145,530,430,546 145,530,430,546 145,530,430,546
III. Capital Adjustments: (98,068,499,377) (98,068,499,377) (98,068,499,377)
IV. Accumulated Other Comprehensive Income: 1,369,992,555 1,632,274,167 957,329,746
Ⅴ. Retained earnings: 781,125,195,555 754,730,939,055 741,383,126,204
Total Shareholders’ Equity: 948,257,979,279 922,126,004,391 908,103,247,119
Total Liabilities and Shareholders’ Equity: 2,194,265,707,339 2,033,751,540,737 1,811,663,922,939
(Unit: KRW)
Financial Reports
Statement of financial position
44th period (as of December 31, 2012) 43rd period (as of December 31, 2011) 42nd period (as of December 31, 2010)
Assets:
I. Current assets: 2,613,434,127,636 1,812,682,771,027 1,862,637,607,738
II. Noncurrent assets: 2,380,510,652,293 2,221,838,586,411 1,762,613,882,411
Total assets: 4,993,944,779,929 4,034,521,357,438 3,625,251,490,149
Liabilities:
I. Current liabilities 1,901,766,359,166 1,641,375,202,734 1,795,878,385,921
II. Non-current liabilities: 1,353,966,665,991 772,717,510,845 383,680,209,284
Total liabilities: 3,255,733,025,157 2,414,092,713,579 2,179,558,595,205
Capital:
I. Controlling interest 1,290,301,046,691 1,229,834,875,799 1,089,350,055,984
Capital stock 118,300,860,000 118,300,860,000 118,300,860,000
Consolidated capital surplus 139,657,575,652 140,567,851,722 139,437,795,169
Consolidated capital adjustments (99,397,984,808) (99,397,984,808) (98,068,499,377)
Consolidated accumulated other comprehensive income 7,442,035,207 7,087,186,833 (4,344,491,417)
Consolidated retained earnings 1,124,298,560,640 1,063,276,962,052 934,024,391,609
II. Non-controlling interest 447,910,708,081 390,593,768,060 356,342,838,960
Total Shareholders’ Equity: 1,738,211,754,772 1,620,428,643,859 1,445,692,894,944
Total Liabilities and Shareholders’ Equity: 4,993,944,779,929 4,034,521,357,438 3,625,251,490,149
(Unit: KRW)
Consolidated statement of financial position
No. Issue date of issuance Amount issued Interest rate Maturity date Current balance Managing underwriter Remarks
180 public offering bond 10.08.27 80,000 4.85% 13.08.27 80,000 Hana Daetoo Securities
181-1 public offering bond 11.02.10 30,000 4.55% 13.02.10 30,000 Hana Daetoo Securities
181-2 public offering bond 11.02.10 120,000 4.85% 14.02.10 120,000 Hana Daetoo Securities
182-1 public offering bond 11.07.29 110,000 4.54% 14.07.29 110,000 Woori Investment & Securities
182-2 public offering bond 11.07.29 40,000 4.83% 16.07.29 40,000 Woori Investment & Securities
183 public offering bond 11.10.28 50,000 4.68% 15.10.28 50,000 Mirae Asset Securities
184 public offering bond 11.12.26 100,000 4.45% 16.06.26 100,000 Hana Daetoo Securities
185 public offering bond 12.03.02 60,000 4.12% 15.03.02 60,000 Korea Investment & Securities
186 public offering bond 12.07.03 100,000 4.12% 17.07.03 100,000 Hi Investment & Securities
187-1 public offering bond 12.10.30 50,000 3.55% 17.10.30 50,000 NH INVESTMENT & SECURITIES
187-2 public offering bond 12.10.30 30,000 4.12% 19.10.30 30,000 NH INVESTMENT & SECURITIES
Total 770,000 770,000
Business type Type of sales Sales (2012) Sales (2011) Sales (2010)
Green Domestic consumption 493,061 517,507 447,167
Chemicals Exports 448,527 552,105 462,823
Division Total 941,588 1,069,612 909,990
Life Domestic consumption 420,876 391,044 341,478
Science Exports 19,503 18,646 13,371
Division Total 440,379 409,690 354,849
Domestic consumption 87,452 65,410 60,713
Etc. Exports 6,772 1,396 8,963
Total 94,224 66,806 69,676
Domestic consumption 1,001,389 973,962 849,358
Total Exports 474,802 572,146 485,157
Total 1,476,191 1,546,108 1,334,515
(Unit: KRW1 million)
(Unit: KRW1 million)
SK Chemicals Annual Report 2012
(Information on corporate bonds)
(Sales performance)
50 51
Type and number of shares issued (Unit: share, KRW1,000)
Type of share Number of shares Face value per share Amount Composition (%) Remarks
Registered common shares 20,843,047 5,000원 104,215,235 88.09%
Bearer preferred shares 2,817,125 5,000원 14,085,625 11.91%
Total 23,660,172 118,300,860 100.00%
Changes in the capital stock (Unit: share, KRW1,000)
date Type of share Number of shares Capital increase Capital stock after capital increase details of capital increase
2006.11.02 Common shares 2,955,186 14,775,930 116,988,720 Merger
2006.11.02 Preferred shares 130,104 650,520 117,639,240 Merger
2007.12.27 Common shares 132,324 661,620 118,300,860 Merger
Stock-related matters
Closing date December 3: Holding the regular general shareholders’ meeting within 3 months of the end of each fiscal year
Stock book closing period: from January 1 to January 15
Notification method: Our website (www.skchemicals.com)
Type of share certificate: 1, 5, 10, 50, 100, 500, 1,000, 10,000 shares per certificate (8 types)
Transfer agent: Hana Bank Security Agency Department (43-2, Yeoeuido-dong, Yeongdeungpo-gu, Seoul)
No privilege for shareholders
Major shareholders As of December 31, 2012
Name of shareholderNumber of shares owned (Unit: share) Ownership
Common shares Preferred shares Total Common shares Preferred shares
Chang-Won Choi and affiliate persons 2,888,699 100,350 2,989,049 13.86% 3.56%
National Pension 1,965,300 - 1,965,300 9.43%
Mirae Asset Global Investments Co., Ltd. 1,561,316 - 1,561,316 7.49%
* Based on the latest stockholder’s list
Major creditors (Unit: share, KRW1 million)
Name of creditor Amount Shares owned Remarks
Korea Finance Corporation 75,000 -
Korea Development Bank 69,013 -
Financial Reports
Overall conditions and sales(matters concerning shares)
Board of directors As of December 31, 2012
Classification Title Position Responsibility Remarks
Executive Chang-Geun Kim Vice Chairman CEO
Chang-Won Choi Vice Chairman CEO
In-Seok Lee Vice President Representative of Life Science Division
Non-executive Bo-Hyeon Kang Director Auditing committee member,Non-executive Director nominating committee member
(Non-executive director) Tae-Shin Kwon Director Auditing committee member,Non-executive Director nominating committee member
Deok-Geun Ahn Director Auditing committee member,Non-executive Director nominating committee member
Gi-Ho Huh Director Non-executive director
Employees
Classification Office worker Researcher Production worker Total
Male 658 232 448 1,338
Female 138 116 106 360
Total 796 348 554 1,698
Place of business
Place of business Main businesses Location Phone number
Pangyo Main Office Corporate Management & Marketing 686, Sampyeong-dong, Bundang-gu, Seongnam-gu, Gyeonggi-do 02-2008-2008
Ulsan Plant PET resins, PREPREG®Production 600, Hwaseong-dong, Nam-gu, Ulsan 052-256-0121
Ansan Plant Drug Production 474-3, Moknae-dong, Danwon-gu, Ansan, Gyeonggi-do 031-491-0121
Osan Plant Drug Production 12, Gohyeon-dong, Osan, Gyeonggi-do 031-668-4185
Cheongju Plant Drug Production 1-6, Songjeong-dong, Heungdeok-gu, Cheopngju, Chungcheongbuk-do 043-270-9500
Andong Plant Drug Production(under construction) 109. Maegok-ri, Pungsan-eup, Andong, Gyeongsangbuk-do 054-902-4804
Subsidiaries (with more than 50% equity)
Subsidiary Relationship with SK Chemicals
Company name Capital stock Business type Investment equity Ownership(%) Trade relations
SK Syntec KRW35.9 billion Business consulting, etc. 7,181,350 shares 100.00%
SK Chemicals Qingdo USD 4,000,000 PREPREG®mfg. USD 4,000,000 100.00%
SK Chemicals Suzhou USD 12,790,000 Polyester adhesives mfg. USD 12,790,000 100.00%
SK Pharma Beijing USD 100,000 Pharmaceutical marketing USD 100,000 100.00%
SK Chemicals GmbH EUR 25,000 Pharmaceutical marketing EUR 25,000 100.00%
SK Chemicals America USD 906,500 Plastic material wholesale USD 906,500 100.00%
Concurrent offices in subsidiaries as of December 31, 2012
Executives with concurrent offices Companies with whom they hold concurrent offices Remarks
Name Position Company name Rank
Chang-Won Choi CEO and Vice Chairman SK Gas Vice Chairman
SK Chemicals Annual Report 2012
Organisation
52 53
Investments in other companies as of December 31, 2012
Names of other companies Investment equity Ownership Remarks
SK Gas 3,928,537shares 45.53%
UBCare 17,714,411shares 43.97%
SK Chemicals (Qingdao) $4,000,000 100.00%
SK Chemicals (Suzhou) $12,790,000 100.00%
SK Syntec 7,181,350shares 100.00%
SK Chemicals America $906,500 100.00%
SK Cytec 250,000shares 50.00%
SK E&C 6,006,009shares 25.42%
TSK Water 200,000shares 25.00%
Intervest 760,000shares 38.00%
SK Networks 41,801shares 0.02%
Koentec 600,000shares 1.20%
KOPLA 898,429shares 10.33%
SK CHEMICALS GMBH € 25,000 100.00%
SK Pharma Beijing $100,000 100.00%
SK TIC 449shares 1.50%
ST Green Energy Pte, Ltd $150,000 50.00%
KRCC 5,900shares 29.50%
Ningbo SK Zhenbang Chemical Company Limited $3,800,000 19.69%
Cara Care 2,500shares 15.15%
Zeropack 196,000shares 9.80%
Green Tech 21 4,005shares 2.13%
Ecomax 100,000shares 5.00%
Yonghyen 4-area industrial water managing association ￦419,199,443 81.78%
Shares and investments
Financial Reports
Yangjae IC
Singal IC Suji Sunae station
Naegok IC
Segok-dong rotary
Samsung Techwin,
Pangyo roadAnyang
Daew
ang-Pangyo road
Address - 310, Pangyo-ro, Bundang-gu, Seongnam, Gyeonggi-do
Website - www.skchemicals.com
Planning and editing - PR Office
This publication was printed on FSC* certified paper with soy-based ink
to minimize effects upon the environment.
FSC* : Forest Stewardship Council
Certification for credible production and consumption of forest products, contribution
to society and leading economical and sustainable development of forestry resources.
Seoul Ring Expressway
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Pangyo JC
1. Manufacturing, processing, selling and exporting of synthetic resins and related products.
2. Manufacturing, processing, selling and exporting of carbon fiber, composite materials and related products.
3. Manufacturing, processing, selling and exporting of inorganic materials and related products.
4. Manufacturing, processing, selling and exporting of agricultural chemicals items and related products.
5. Manufacturing, processing, selling and exporting of household items like various surfactants and synthetic detergents and related products.
6. Manufacturing, processing, selling and exporting of information and electronic materials and related products.
7. Manufacturing, processing, selling and exporting of precision chemical products.
8. Manufacturing, processing, selling and exporting of food, food additives, ginseng products and related products.
9. Manufacturing, processing, selling and exporting of drugs, over-the-counter drugs, veterinary medicines, cosmetics, medical
supplies, medical equipment and sanitary products, subdivision and healthcare-related business.
10. Manufacturing, processing, selling and exporting of the raw materials of polyester fibres and recycled fibres (acetate fibres, etc.),
and related chemical products.
11. Manufacturing, processing, selling and exporting of polyester fibres related products.
12. Manufacturing, processing, selling and exporting of recycled fibres (acetate fiber, etc.) and related products.
13. Manufacturing, processing, selling and exporting of woven and knit fabrics and apparel, and related products.
14. Manufacturing, processing, selling and exporting of construction materials and related products.
15. Venture capital or business support.
16. Electronic commerce and Internet service business.
17. Real estate trading and leasing.
18. Specialty construction, construction and civil engineering business.
19. Environmental management agency business and environmental management service business.
20. Environmental pollution prevention facility business.
21. Manufacturing, processing, selling and exporting of high-purity organic solvents and ethanol wholesale.
22. Manufacturing, processing, selling and exporting of biodiesel, other fuels replacing petroleum, their raw materials, compounds,
byproducts and production plant facilities.
23. Purification, processing, selling and exporting of byproducts made from the manufacturing of each of the above-mentioned
products (toxic substances, methanol, etc.).
24. Manufacturing, selling and exporting of machinery and devices related to each of the aforementioned businesses.
25. Technical service business related to each of the aforementioned businesses.
26. Investments in the chemical fiber industry and the chemical industry, and investments deemed to be necessary for each of the
aforementioned businesses.
27. Provision and sale of the computer system service including the analysis, design, development, integration, education and
operation of the computer systems (newly established on March 10, 2006).
28. Manufacturing, processing and selling of nutritional supplements (newly established on November 1, 2006).
29. Business related to medical institution operation and investment (newly established on November 1, 2006).
30. Business related to the manufacturing, processing, selling and exporting of automotive parts and related products
(newly established on March 9, 2007).
31. Any business incidental to each of the aforementioned businesses.
Essential business of the company
Financial Reports
Seongnam IC