SK Holdings said on Thursday that it is teaming up with US hydrogen company Plug Power to branch out into the hydrogen market in Asia.

The partnership comes after the South Korean conglomerate invested 1.85 trillion won and acquired some 10 percent of shares in Plug Power, becoming the largest shareholder of the hydrogen giant.

An online deal closing ceremony was held Thursday and was attended by executives of both companies including CEO of SK Holdings Jang Dong-hyun, Vice Chairman of SK E&S Yu Jeong-joon and Andrew J. Marsh, President and CEO of Plug Power.

The move will see plans to jointly develop new business models in the Asian market materialize as well as establishing a joint venture to build hydrogen power infrastructure in Korea first.

Speaking at the event, Jang said the move is the latest in a series of SK’s ESG efforts, also known as environmental, social, and governance.

“Since last year, SK has actively taken an ESG approach, including the move to join RE100. Creating a value chain in hydrogen business is crucial as we try to center our business on creating an environmental-friendly portfolio,” Jang said.

Yu noted that the partnership will create a synergy together.

“As we branch out into Asia’s hydrogen market in the future, we expect to create a synergy between SK and Plug Power,” he said.

Marsh spoke about how finding a good partner is crucial in forming a partnership and hoped that SK’s business capability and global network would lead to a successful foray into the Asian market.

The new joint venture is set to be launched some time this year with plans to create a major production base in Korea where key equipment for hydrogen businesses can be mass produced and supplied at a “drastically lower price” to the domestic and Asian market by 2023.

“As we mix SK’s energy infrastructure and business capability at home and abroad and Plug Power’s hydrogen business portfolio and technology, we hope to strengthen our competitiveness in the global hydrogen market,” one official at SK Holdings said.

By Yim Hyun-su (hyunsu@heraldcorp.com)