▲ CEO of SK Lubricants Cha Gyu-tak

In this episode of, we invited CEO of SK Lubricants Cha Gyu-tak to review the great accomplishments of SK Lubricants in 2021, and share with us the upcoming plans of the company for 2022. After a great year with excellent performance, CEO Cha shared with us his ambitious goals and detailed plans to make the company be better recognized for its Carbon Nature Value, and always be open to future changes.

Q1. Last year was a year of great changes for SK Lubricants, as the company’s values was recognized in the financial market with success in offering its stake. Could you share with us your thought while looking back at what happened in 2021, and tell us your resolution for this year?

I believe last year’s stake sale was the result of high recognition in financial market for SK Lubricants’ product power, market leading business capabilities based on it, and future growth potential of new business.

Last year was indeed meaningful for us, since we was being able to complete the first big step of transformation, building a firm foundation for the future of our business based on definite Financial Story.

Also, thanks to the efforts and dedication of our members, we were able to achieve the highest results since the company’s foundation, despite the prolonged COVID-19 pandemic and uncertain management environment. So I would like to take this opportunity to express my heartfelt gratitude to our members.

By relentlessly driving our financial story in 2022, we will continue to do our utmost to receive greater corporate value from stakeholders.

Q2. You emphasize that business model innovation is the most crucial aspect of completing the financial story. Could you please elaborate on this?

As we were completing the first stage of executing our Financial Story last year, we asked ourselves many questions, such as “What shall we do now?,” “What does the world expect of us?,” and “What should we show in the near future, and what should we prepare further?”

During that process, we realized that we need to be open to what our stakeholders are demanding of us, as well as future changes and inflection points. In that light, we will have to persistently explore future-oriented innovation based on the Financial Story.

To do so, we must continue to strengthen the competitiveness of existing businesses to secure our position as an industry standard, and I believe it is our destiny to pursue Biz Transformation based on this. To this end, we intend to concentrate on two things: earning customer recognition for our Carbon Neutral Value, and setting the groundwork for future business expansion.

Q3. Could you please explain in detail about the last two points you’ve made?

SK Lubricants succeeded in developing YUBASE, Group III base oil, with its own technology in 1995, and has since increased its market share to the point where it currently holds the unrivaled No. 1 position in the Group III base oil market. Also, we pride ourselves on having the most advanced products in the lubricant industry, which contribute to the eco-friendliness of lubricants and enhancement of automotive fuel efficiency and performance.

In this light, I can say that the two previously mentioned points are the main axes of SK Lubricant’s Financial Story.

Carbon Neutral Value means that SK Lubricants will provide customers with Carbon Credit earned through its carbon reduction activities. To this end, we are preparing for securing Eco-Friendly Lubricants Value Certificate to be officially recognized for carbon credits related to the carbon dioxide emission reduction and energy efficiency improvement from using SK Lubricant’s eco-friendly lubricant products. Apart from creating and supplying eco-friendly base oil, we also aim to practice “lubricants upcycling,” which involves reusing discarded lubricants to generate new products rather than disposing or incinerating.

In addition, we will broaden our product portfolios (e-Fluids) beyond combustion engines this year to reinforce our sustainability in terms of business model transformation. SK Lubricant-made lubricants for electric vehicles are already highly recognized in the market. As the electric vehicle market is rapidly growing, we are thoroughly studying a variety of options to lay the groundwork for implementing the Thermal Management Business Model in accordance with the shifting future paradigm.

Q4. We are also curious about SK Lubricant’s Green Transformation outcomes so far and how things are going.

SK Lubricants is working hard to reach carbon Net Zero through Green Transformation. First, we have started looking into a business model that can create eco-friendly premium base oil by incinerating/treating waste base oil as fuel, with the goal of establishing an eco-friendly circular ecosystem through mutual cooperation with government agencies and related enterprises.

Also, as I have just mentioned, SK Lubricants aspires to enter the Thermal Management business, which is part of our Business Model Innovation project. As the first step, we eye on a data center server liquid immersion cooling business. We believe that the cooling effect of our base oil can apply, and expect that it will save a significant amount of power compared to the existing air-cooled system.

▲ (Left) SK Innovation employees introduce the eco-friendly products of SK Lubricants / (Right) SK Lubricant’s eco-friendly SK ZIC Zero campaign launched in September 2021

On the other hand, Green Transformation in existing businesses is being implemented at a quick pace. For example, we created and launched eco-friendly containers for our main product line (SK ZIC X7, SK ZIC X7000), which accounts for 30% of our total lubricant sales. Previously, in 2020, we already launched SK ZIC ZERO products, which have the whole containers, including the caps and labels, made of an eco-friendly mono material – polyethylene based recycled plastic. In total, we recycle around 100 tons of plastic waste per year, which is equal to about 5 million of 500 ml PET water bottles.

Q5. You mentioned earlier that “we have to be open to future change,” and you have attended CES 2022, where we could see the keys of future technologies. So what were your thought after attending the event?

SK Lubricants’ products have been featured at CES a few times, but CES 2022 was the first event that I attended in person. As I looked around the SK exhibition hall, I could see SK’s dedication to carbon reduction was beautifully portrayed through meaningful stories. In particular, I believe that the participation of multiple companies of SK helped us emphasize the importance of carbon reduction and enrich the contents that can appeal to many stakeholders and visitors.

I also visited the booths of many automakers and vehicle companies, and checked cutting-edge IT product exhibition halls at CES. What struck me the most was the fact that most firms were establishing a “big shift” or new direction and planning for technology and businesses in that direction.

Such implication helped me to reassure myself about the path we aim to take in realizing SK Lubricants’ Financial Story. It motivated me to bring practical results based on strong executive abilities. Most importantly, I also believe that the most crucial factor is “speed.”

▲ CEO of SK Lubricants Cha Gyu-tak (second of left in the left photo, first from right in the right photo) attended SK Innovation’s first strategy meeting in 2022 at CES 2022 in Las Vegas on Jan. 6 (U.S. local time)

Q6. Finally, is there anything other message that you want to deliver to SK Innovation members and our stakeholders?

At the moment, we are still facing various uncertain and challenging obstacles in our business environment. However, I’m confident that if we believe in ourselves and take pride in our ability to overcome these challenges, we will get stronger and better as a company.

This year, I and all of SK Lubricants members will work even harder to grow into a company that follows the principle of “where there are good performances, there will be rewards,’ a company whose value is recognized by the financial society, and a company that survives forever by maintaining absolutely unrivaled competitiveness while also being filled with autonomy and creativity.

In particular, as CEO, I guarantee you that I will do everything in my power to create a lasting foundation for our members’ happiness, while also ensuring that our firm will be even better recognized by stakeholders through our solid implementation of Financial Story.