SK Lubricants changed its name to SK Enmove on December 1, 2022. The name change reflected the company’s drive to transform itself from a lubricant producer to an “energy saving company energy”. The following is an interview that the company’s new CEO, Park Sang-kyu, recently had with SKinno News, the news website of SK Innovation, the parent company of SK Enmove. — Ed.
Question: In December last year, SK Enmove took the new corporate name and you were appointed as the new CEO of the company. What are your thoughts and expectations for 2023?
Answer: For me and for SK Enmove, 2023 is the year we start anew. A new beginning may bring anxiety or vagueness to some, but it may bring excitement or anticipation to some others. For SK Enmove, 2023 is an exciting year when expectations will come true.
In the past, under the name of SK Lubricants, SK Enmove achieved several great results. Above all, last year our business performance was excellent, and it’s not just about the numbers. We also showed our stakeholders how our financial story had been executed one by one. This year, SK Enmove will carry out the “expansion of financial history”, which will suit our new name. I hope that 2023 will be a year in which everything we have planned can be carried out.
Q: So how is SK Enmove innovating its business model to realize the “expansion of Financial Story” that corresponds to the new company name?
To: We live in a world where not only business performance, but also the sympathy and support of stakeholders, including customers, society and business partners, decide whether a company can earn more. The rule of the market has changed. In this regard, some people seem to have a negative long-term perspective on the future of SK Enmove due to the expansion of electric vehicles. However, this is not true. This is not only because the demand for high-quality lubricant base oil and lubricant over the next 10 to 20 years is constant, but also SK Enmove has already been moving forward with the innovation of its BM (business model ), preparing for the era of electric vehicles. step by step.
SK Enmove has been developing the “electric vehicle (EV) related products” aimed at a new era, and also already makes supplies to world-class electric vehicle manufacturers. In addition, by expanding cooperation with other electric vehicle companies, we are also preparing to develop e-fluids that improve battery efficiency and enhance safety. In addition, our BM’s innovation goes beyond the “for vehicles” focus and expands into the “thermal management” area, such as the data center. The acquisition of shares in GRC, a leading industry partner, also falls into this category. GRC and SK Enmove are currently expanding our cooperation in the field of product research and development.
I believe that changing a name means a renewal, be it an identity or a lifestyle. SK Enmove also wants to show the direction of our BM innovation by changing our company name. This means that the change was based on the consensus that our identity should change to an “energy saving company”. I am sure our value will receive a higher evaluation.
Q: Stakeholders are curious about how to improve the value of existing companies through business model transformation.
To: I think the values of existing companies are judged by how much fundamental competitiveness they have. Last year, SK Enmove posted decent results, but the market environment was not favorable. In the lubricant base and lubricating oil business, the price of raw materials increased and logistics supply chain risks continued. Most of the outlook for the economy this year is still negative and companies that have not secured internal stability will face great difficulties.
SK Enmove is trying to overcome the difficult business environment through “structural improvements”. Regarding the base oil, I think the priority should be to respect the basics of stable supply of quality products (SSQP) and operational optimization. In the case of lubricating oils, brand value is a very important factor. It is directly related to the improvement of profitability and the growth of the global market. SK ZIC will increase its brand value through the aforementioned BM innovation, and SK Enmove’s strategy for brand enhancement is also being prepared accordingly.
Such structural improvements cannot be made by understanding alone, but only when pursuing the same goal in terms of MPR/S as a single body. MPR/S stands for Marketing (M), Production (P), R&D (R) and Support (S). Also, now is the era where we need the “perspective of total value that contributes to the happiness of stakeholders” such as major customers and JV partners. I believe that fundamental competitiveness is finally established when the perspective is broadened to the business activities that solve their needs and problems.
Q: What do you think is SK Enmove’s biggest strength?
To: To put it bluntly, SK Enmove’s greatest strength is our members. Manufacturing, branding, marketing and creating a market for high-quality base oil is ultimately done by people. I would like to highlight that SK Enmove’s labor productivity per employee shows one of the highest levels in the world. I think it is possible because they willingly and willingly fulfill their roles. That is why I believe that each and every member is an invaluable resource, indispensable as the greatest asset of our company.
In other words, our members themselves are SK Enmove’s ability to innovate the BM and executive ability of the company. For example, even now, the development of e-fluids is strictly done by the executive capacity of SK Enmove, formed by the executive capacity of our members. I believe that my task here is to create a culture where each member can grow together and work as “one team”. I hope that all members feel happy with pride and a sense of belonging when working in SK Enmove and constantly create a virtuous cycle in which SK Enmove’s competitiveness continues to increase in the global market.
Q: SK Enmove is trying to form a new identity as an “energy saving company”, so how can company members achieve this new vision based on their skills?
To: There are many, but let me find the answer from the perspective of our members, which is our biggest strength, as we mentioned above.
First, the ability to recognize change in the right direction at the right time is important. In other words, it can also be called “entrepreneurship”. I believe that appreciating a change is no different than recognizing that the future paradigm is changing. SK Enmove agreed that the paradigm is moving towards ESG and Net Zero management. If so, I think people working for the company should also increase their understanding of keywords.
Second, the aforementioned executive ability. Even if we recognize changes in a timely manner, we will not be able to respond to them or change without the spirit of taking on challenges and the ability to execute them.
Last but not least, we need the attitude to share knowledge and experiences of change and direction without informational asymmetry. To promote the financial story successfully, it is necessary to work together, discuss smoothly among the MPR/S and solve difficult tasks, as we learned from the SK Management System, the management philosophy of the SK Group. In fact, all of these processes ultimately come from words and actions that are considered and respectful of each other. A positive work culture where members can communicate horizontally is what a company embarking on a new path should have.
Q6. Before ending this interview, is there any other message you would like to give to members of the company, stakeholders and readers of SKinno News?
In the past, SK Enmove used to be known as the company that makes SK ZIC lube oil, and for those who know a little more about the industry, the company that makes YUBASE lube base oil. This is because “what” a company does is important in defining its identity.
But what we need to think more fundamentally than the “what” is the “why”. In other words, what is the meaning of the service or products we offer. For SK Enmove, this is “increasing energy efficiency”. Increasing energy efficiency means saving the Earth’s resources, accordingly. The paradigm shift, symbolized by Green, demands this direction.
For us, the identity of “Energy Saving Company” is no longer just an ideal choice; it is essential. Of course, this path is never easy to follow, but SK Enmove has potential. Although our step-by-step approach may make us seem slow, we are taking the right path without deviating as we use SK Enmove’s strong identity as a landmark. I hope we get a lot of support for SK Enmove’s changes and challenges.
