POSCO Inter Enters Indonesian Palm Oil Refining Business "Operating for 25 Years"

Promotion of Palm Refinery Plant Establishment on Kalimantan Island
248.1 Billion KRW Investment, "Acceleration of Transition to Comprehensive Business Company"

[Asia Economy Reporter Oh Gyumin] POSCO International announced on the 10th that it has decided to enter the palm oil refining business in Indonesia through its board of directors. It will invest $200 million (approximately 248.1 billion KRW) through AGPA, established in Singapore for palm business expansion.

The refining plant is scheduled to begin construction in the fourth quarter of this year and aims to start operations in the second quarter of 2025, with an annual production capacity of 500,000 tons. The produced products will be exported not only to the Indonesian domestic market but also to Korea and China.

Kalimantan Island is being strongly considered as the site for the refining plant. Indonesia is the world's largest palm producer, and Kalimantan Island has geographically advantageous conditions for sourcing palm raw materials and exporting products.

POSCO International announced on the 10th that it has decided to enter the palm oil refining business in Indonesia through its board of directors. It will invest $200 million (approximately 248.1 billion KRW) through AGPA, established in Singapore to expand its palm oil business.
[Image provided by POSCO International]

The palm oil refining business refers to further processing crude palm oil produced at palm farms through a refining plant. Refined palm oil is used in food, cosmetics, bioenergy, and more. Palm oil has the highest productivity per unit area among vegetable oils, producing 10 times more than soybean oil and 7 times more than sunflower oil.

Thanks to the productivity and economic efficiency of palm oil, entering the refining business is expected to enhance POSCO International's competitiveness in the palm business and significantly contribute to improving profitability.

POSCO International has been producing crude palm oil since 2017 by developing palm farms on Papua Island, Indonesia. The palm business operating profit of $80 million exceeds 10% of POSCO International’s total operating profit of approximately 900 billion KRW in 2022 before the merger with POSCO Energy.

Vice Chairman Jung Tak stated, "To transform from a traditional trading company into a comprehensive business company for sustainable growth, we will discover profitable businesses and pursue bold investments. We will make this year the first year of a new leap in the food business and strengthen our business foundation through overseas procurement and demand asset investments."