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POSCO International, GS Caltex to invest in Indonesian palm oil refinery
POSCO International Vice Chairman Jeong Tak, right, and GS Caltex CEO Hur Sae-hong pose at POSCO Center in Seoul, Thursday, after signing an agreement to make a joint investment in an Indonesian palm oil refining business. Courtesy of POSCO International
By Park Jae-hyuk
POSCO International and GS Caltex signed an agreement to invest a combined $210 million in AGPA Refinery Complex (ARC) established in Indonesia in March for their joint palm oil refining business, both companies said Thursday.
The trading firm will hold a 60 percent stake in the joint venture, while the oil refiner will hold the remaining 40 percent.
Based on their investments, ARC will start building a palm oil refinery in the first quarter of next year on a 300,000-square-meter site at the Balikpapan industrial complex in East Kalimantan.
The plant will begin to produce 500,000 tons of refined oil annually by the second quarter of 2025. The product will be sold in Indonesia and exported to other countries in the region, including Korea and China.
As part of efforts to become a global green company, POSCO International has sought to expand the value chain of its palm oil business. GS Caltex has also tried to secure a foothold to produce biofuel for its Green Transformation vision.
Both companies are considering building another joint plant for sustainable aviation fuel or sustainable marine fuel, which will be made with waste oil generated from ARC’s palm oil refinery.
“Amid the increase in global population and growing demand for biochemicals, the palm oil business has become promising,” a POSCO International official said. “Beyond the palm oil production, our company will engage in refining, so that we can expand the value chain to various new business sectors, such as bioenergy, foods and chemistry of fat and oil.”
GS Caltex CEO Hur Sae-hong promised that his company will utilize its biofuel capability to create synergy with POSCO International.
“The joint venture will enable us to enhance our competitiveness in the global market,” he said.