South Korea’s largest trading entity, POSCO International will establish a palm refinery in Indonesia as part of its efforts to diversify into a general business company covering energy, food, and eco-friendly businesses.
In January this year, POSCO announced its decision to enter the palm oil refinery business in Indonesia. It will invest US$200 million in the project through AGPA, a subsidiary established by POSCO International in Singapore in 2021 to expand the palm oil business.
The refinery is scheduled to start operation by 2nd quarter 2025 and construction will start in 4th quarter 2023. Once completed, the refinery will have an annual production capacity of 500,000 tons. Its output will be sold in the Indonesian market as well as exported to Korea and China. Kalimantan province, which is an ideal location for procuring palm raw materials, has been considered as a potential site for the refinery.
POSCO International had earlier established PT BIA, a palm plantation corporation in Indonesia in 2012. In 2021, it transferred its 85% stake in PT BIA to Singapore-based AGPA. PT BIA has worked closely with the local community to align with its environmental policy of ‘No Deforestation, No Peat and No Exploitation (NDPE)’. In 2021, it obtained a Roundtable On Sustainable Palm Oil (RSPO) certification, an international sustainable palm oil certification.
