LX Inter completes acquisition of Poseung Green Power... Full-scale promotion of eco-friendly power generation business

Strengthening Eco-Friendly Renewable Energy Portfolio
Focusing on Domestic Biomass and Overseas Hydropower

[Asia Economy Reporter Kiho Sung] LX International has completed the acquisition process of Poseung Green Power, which operates an eco-friendly biomass power plant, and will actively promote its eco-friendly renewable energy power generation business. Starting with this acquisition of Poseung Green Power, LX International plans to expand its business across the entire value chain by discovering subsequent biomass power generation projects and reviewing fuel supply businesses, nurturing biomass and hydropower renewable energy as strategic business areas for the company.

On the 19th, LX International announced that the approval procedures from the government, financial institutions, and other related agencies have been completed regarding the stock purchase agreement to acquire 63.34% of Poseung Green Power shares held by DL Energy for 95 billion KRW. With this, LX International has secured management rights of Poseung Green Power.

Poseung Green Power's biomass power plant is a renewable energy power plant built in 2014 in the Poseung district of Asan National Industrial Complex, Pyeongtaek-si, Gyeonggi-do. It uses approximately 250,000 tons per year of woody biomass fuel such as biomass solid fuel and unused wood chips to produce up to 43 megawatt-hours of electricity per hour. This corresponds to a medium-sized facility capacity capable of supplying electricity to 100,000 households in Seoul annually. The power plant also operates a district energy business supplying steam to companies located within the Poseung Industrial Complex.

Since commencing commercial operations in March 2018, the Poseung biomass power plant recorded sales of 42.8 billion KRW that year. Last year, it achieved approximately 60 billion KRW in sales through electricity, steam, and Renewable Energy Certificate (REC) sales, entering a business stabilization phase in its fifth year of production this year. Notably, the REC sales have secured stable revenue sources through long-term supply contracts, and fuel supply stability is also ensured through long-term contracts with biomass solid fuel suppliers.

An LX International official stated, “Considering the increasing demand for RE100 compliance and the eco-friendly power generation trend, renewable energy power generation is expected to experience continuous and stable growth.” He added, “Through the acquisition of Poseung Green Power, we will internalize domestic renewable energy power generation operation capabilities and expand the value chain by entering the biomass fuel supply business to maximize the asset value of Poseung Green Power.” Furthermore, he said, “Domestically, we aim to strengthen our renewable energy power generation portfolio through biomass power generation, and overseas, by additionally securing hydropower assets in Indonesia.”

Meanwhile, LX International recently set its mid-to-long-term strategic direction to “emerge as a core player in future promising energy sectors” and “contribute to LX Group’s growth through new business creation.” To this end, it is fostering renewable energy power generation as one of its strategic businesses alongside nickel. The company plans to expand domestic and overseas asset investments centered on biomass and hydropower, contributing to ESG expansion as well as strengthening stable revenue sources.

Additionally, to secure additional future revenue bases, LX International continuously discovers new business and investment projects that can contribute to LX Group’s business growth, such as eco-friendly materials and logistics center development/operation, and actively considers mergers and acquisitions. It is also exploring the potential for fostering carbon reduction and resource circulation business through commercialization. The acquisition of Korea Glass Industry, for which a stock purchase agreement was signed last March, is currently undergoing approval procedures with related agencies. Previously, last year, the company invested in a biodegradable plastic (PBAT) joint venture, and in February this year, it invested in the development and operation of an eco-friendly logistics center in Busan, continuously discovering new revenue sources.