SK Networks Accelerates Innovation with Business Restructuring
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2024-06-17
- Speedmate and Trading Business Set to Become Subsidiaries
- Rapid Business Advancement Anticipated with Each Subsidiary's Independence
- "We'll Streamline Management and Drive AI Evolution," Says SK Networks
SK Networks, aiming to transform into an AI company, is taking strategic steps to streamline its operations. By restructuring and dividing its businesses, the company seeks to clarify the management structure between the parent company and its subsidiaries, thereby enhancing overall management efficiency.
SK Networks (CEO: Hojeong Lee) announced that it held a board meeting on June 17 and gave the green light to a plan to spin off the Speedmate and Trading divisions. Pending procedural formalities, including an extraordinary shareholders' meeting in August, Speedmate is slated to inaugurate as an independent entity by September, with the trading business to follow suit in December.
This initiative underscores SK Networks' commitment to leading the charge in the AI-driven business throughout the organization, in alignment with its forward- thinking growth strategy. It also seeks to support the long-term growth of its subsidiaries by providing them with adaptable operational autonomy, tailored to the unique characteristics of their respective industries, ensuring swift and effective business momentum.
The immediate plan involves spinning off Speedmate and the trading business, both of which have proven their self-sufficiency and competitiveness. Moving forward, further spin-offs are anticipated, utilizing methods such as securing reliable management capabilities and obtaining stakeholder consensus. This strategic approach positions SK Networks to emerge as a pivotal intermediate holding company.
Speedmate, boasting a robust network of over 590 nationwide locations, leverages its status as Korea's leading car care brand to enhance its expertise in domestic and international vehicle maintenance, emergency roadside service, tire distribution, and auto parts export. By utilizing accumulated customer service data, Speedmate is poised to integrate AI seamlessly into its business model. For the trading business, specializing in chemical product trade, the strategy is to bolster competitiveness by strengthening relationships with stable customers while also using AI to navigate highly volatile external economic situations.
SK Networks plans to support the two subsidiaries in establishing themselves as independent corporations, all while sharpening the competitive edge of its major businesses and subsidiaries. This commitment to innovation is evidenced by initiatives such as organizing an event earlier this year to acquaint investors with the AI-driven innovation strategies for SK Magic, Walkerhill, and Encore. In April, SK Networks made its mark by establishing PhnyX Lab in Silicon Valley, USA, with the primary objective of developing AI products and expediting the creation of novel solutions. Sunghwan Choi, the President & COO of SK Networks, is serving the same position at Encore. He is actively working to enhance Encore's competitiveness in data, the foundation of AI technology, and to identify new growth opportunities.
Moreover, SK Networks is reinforcing its groundwork for sustainable growth by enhancing the effectiveness of portfolio management and ensuring financial resilience in dynamic economic landscapes. The company is steadfast in its commitment to augmenting shareholder value through policies that are friendly to shareholders, such as distributing dividends on profits generated by both the headquarters and its subsidiaries.
An official from SK Networks stated, “We are dedicated to provide ongoing support to advance the value of the newly established independent entities resulting from the spin off of Speedmate and Trading division.Furthermore, we will spearhead innovation in critical areas pivotal for future growth, such as AI, across our organization. We will maintain agility in response to economic fluctuations, prioritizing both the efficacy of portfolio management across our primary and subsidiary entities to ensure sustainable growth and the enrichment of value for our members and stakeholders through stability and expansion.”
