- On the 19th, the company secured management control of Sampoerna Agro in Indonesia, adding 128,000 hectares of palm plantations and achieving stable entry into the global palm market through a total investment of approximately KRW 1.3 trillion
- On the same day, the company completed construction of a palm oil refinery on East Kalimantan Island with an annual capacity of 500,000 tons, in partnership with GS Caltex
- Since Chairman Jang In-Hwa took office, the group has accelerated efforts to secure future growth businesses while also contributing to strengthening national food security
POSCO INTERNATIONAL has completed a full value chain in its palm oil business—from palm seed development to producing palm oil for biofuel feedstock—by acquiring Sampoerna Agro, one of Indonesia’s leading palm companies, and inaugurating a new palm oil refinery in the country on the same day.
On November 19, POSCO INTERNATIONAL acquired shares in the Indonesian listed company Sampoerna Agro, securing management control and becoming its largest shareholder. Intended to expand its global palm business value chain, the investment for this acquisition is estimated at approximately KRW 1.3 trillion, based on the exchange rate at the time of disclosure.
Through this acquisition, POSCO INTERNATIONAL has added 128,000 hectares of plantations, which is more than double the size of Seoul, and now possesses a total global farming base of 150,000 hectares, including its existing plantations in Papua, Indonesia.
As a leading Indonesia-listed company, Sampoerna Agro operates palm plantations across Sumatra and Kalimantan islands, owning a palm seed subsidiary and research institute that rank second in domestic market share in Indonesia.
What is noticeable about the newly acquired plantations is that stable profits can be generated from the very beginning of the acquisition since the palm trees have already reached maturity. The palm plantation business is a long-term, high-return industry, as harvesting becomes possible three to four years after planting and production continues for over 20 years.
POSCO INTERNATIONAL began developing palm plantations in Papua in 2011, entered commercial production in 2016, and now operates three milling plants that produce 210,000 tons of palm oil annually. As the existing plantations have reached maturity, they have made a significant contribution to the group’s profitability, recording an average operating profit margin of 36% through last year.
On the same day, POSCO INTERNATIONAL held the completion ceremony for PT. ARC (PT. AGPA Refinery Complex), a palm oil refining joint venture established with GS Caltex in Balikpapan, East Kalimantan, Indonesia.
PT. ARC is owned 60% by POSCO INTERNATIONAL and 40% by GS Caltex, with a total investment of USD 210 million. The newly completed refinery has an annual refining capacity of 500,000 tons, equivalent to approximately 80% of Korea’s annual imports of refined palm oil.
The ceremony was attended by approximately 100 key figures, including POSCO INTERNATIONAL CEO Lee Kye-In, GS Caltex CEO Heo Se-Hong, Indonesian Deputy Minister of Energy and Mineral Resources Yuliot Tanjung, Mayor of Balikpapan Rahmad Mas’ud, and Korean Ambassador to Indonesia Park Soo-Deok. The refinery, which broke ground in May last year and has now been completed, will undergo trial operations and is scheduled to begin full production later this year.
POSCO INTERNATIONAL will supply crude palm oil produced from its plantations to PT. ARC, and the refined oil produced there will be sold both in the Indonesian domestic market and exported to South Korea, China, and other countries. GS Caltex plans to leverage its accumulated expertise to enhance the operational efficiency of the refining facilities and supply refined palm oil for biodiesel to the Korean market.
Going forward, the POSCO Group is expected to strengthen its competitive edge in the global palm oil market, helping to reduce Korea’s reliance on imported edible oils and establish a stable production and supply base for palm oil for enhanced national food security.
Since Chairman Jang In-Hwa took office, the POSCO Group has been actively seeking future growth businesses for stable generation of profits. The strengthening of the Indonesian palm oil business is part of the group’s broader infrastructure initiatives, supported by POSCO INTERNATIONAL’s extensive experience in overseas agro business.
Meanwhile, to bolster future competitiveness, the POSCO Group restructured its business portfolio last year into “Two Core (steel + secondary battery materials) + New Engine (new growth businesses)” and is executing strategic investments to preempt high-growth, high-return markets such as India and North America. In India, the group is pursuing the establishment of a local steel mill in partnership with the JSW Group. In September, to proactively respond to trade barriers and accelerate its entry into the North American market, it signed an MOU with Cleveland-Cliffs for cooperation in the steel business.
