POSCO International, GS Caltex to build palm oil refinery in Indonesia
The joint venture will be a win-win as both seek to expand their presence in the global biofuel market
12/10/2023 (The Korea Economic Daily) - South Korea’s POSCO International Corp. and GS Caltex Corp. on Thursday signed a $210 million deal to build a bio feedstock refinery facility in Indonesia.
The two companies said they have agreed to build a palm oil processing plant on a 300,000 square-meter plot of land in Kalimantan.
The factory will break ground early next year with commercial operations expected to start in the second quarter of 2025, the companies said.
Once up and running, the facility will have the capacity to produce 500,000 tons of biofeedstock and edible oil annually.
The two companies have also agreed to jointly pursue the business of collecting waste materials generated from the palm oil refining facility.
For the project, the partners in March set up a joint venture, ARC, in Indonesia, in which POSCO International has a 60% stake and GS Caltex owns the remaining stake.
The investment signing ceremony was held in Seoul, attended by Jeong Tak, vice chairman and chief executive of POSCO International, and GS Caltex CEO Hur Sae-hong.
POSCO-GS COOPERATION TO CREATE SYNERGY
Refined palm oil, used in various sectors such as food, cosmetics and bioenergy, will be sold in Indonesia and exported to neighboring countries, including China and Korea, the companies said.
Through the JV, POSCO International, the general trading and energy exploration unit of steel giant POSCO Holdings Inc., hopes to expand its palm oil business value chain in the Asian market.
GS Caltex, Korea’s second-largest oil refiner, is expected to enhance its biofuel production technology and secure a stable procurement of biofuel feedstock through the recycling of waste palm oil.
“This joint venture will help us strengthen our competitiveness in the global biofuel market. We expect synergy through our cooperation with POSCO International,” said GS Caltex CEO Hur.