A view of the fulfillment center near the Kentucky 1 Plant site under construction in Bullitt County, Kentucky, USA. On the 17th, FSK L&S, a logistics subsidiary of SK Square, announced that it has won the contract to operate the fulfillment center for BlueOvalSK. BlueOvalSK is a joint venture established in 2022 with equal investment from SK On and Ford.
The contract period is six years, until 2030, with the possibility of extension until 2034. It is expected that hundreds of billions of won in new revenue will be generated annually from BOSK and vendors during the contract period. In addition, they plan to significantly grow both revenue and operating profit by using new ventures, such as the upcoming logistics services for NAND semiconductors in China and North America, as a stepping stone this year.
Under this contract, FSK L&S will be responsible for operating fulfillment centers to support manufacturing at three battery plants: BlueOvalSK’s Kentucky 1 and 2 plants and Tennessee plant. They will oversee logistics operations before and after the manufacturing process of batteries produced by BlueOvalSK. For example, they will store battery raw materials near the factories, supply them as needed according to the production schedule, and handle the storage or inspection of completed batteries, essentially acting as a ‘dedicated manager’ for the battery plants.
The significance of this contract is that FSK L&S has expanded its business scope by entering the ‘battery belt,’ a key hub of U.S. electric vehicle battery production, for the first time. The combined production capacity of BOSK’s three plants in Tennessee (1) and Kentucky (2) amounts to a total of 127 GWh annually. This is enough to produce about 1.2 million Ford pickup trucks equipped with 105 kWh batteries. Notably, the sites for Kentucky 1 and 2 plants cover 6.28 million square meters, equivalent to approximately 880 soccer fields, making them the largest in the U.S.
FSK L&S stated that it secured the fulfillment center operation contract by promoting the competitiveness of its self-developed digital logistics platform ‘KEROL’ (Kerol). When integrating Kerol into fulfillment center operations, it allows for real-time inventory monitoring, optimal placement of parts, and determining the shipping order, automating and streamlining work processes to reduce unnecessary inventory and labor costs. Kerol is a global ICT logistics platform that manages the entire logistics process, providing a comprehensive view of inventory checks, transportation route optimization, and more.
As FSK L&S expands its scope and enhances its profitability, SK Square’s portfolio value is also becoming more visible. SK Square is actively working to improve portfolio profitability through strategic reviews of each portfolio’s business strategy.
FSK L&S CEO Kim Yong-jik stated, “We will manage the entire logistics process in real-time by utilizing data and IT platforms, going beyond traditional logistics services,” and added, “Based on this, we will lead the digitalization of logistics services by optimizing supply chain management (SCM) centered on customers and achieving logistics cost reductions.”