20/11/2025 (The Korea Herald) - South Korean trading and energy company Posco International and oil refiner GS Caltex are expanding their palm oil footprint in Indonesia, stepping up investment as global competition intensifies for the key commodity used in food production and biofuels.

The companies announced Thursday that the push centers on two major initiatives: a $210 million joint venture refining plant, and Posco International’s separate $862 million acquisition of a large-scale Indonesian palm farm. Both moves aim to secure long-term supply and strengthen their position as countries ramp up efforts to cut carbon emissions.

The new refinery in East Kalimantan will operate under AGPA Refinery Complex, a joint venture owned 60:40 by Posco International and GS Caltex. A completion ceremony was held Wednesday with Posco International CEO Lee Kye-in, GS Caltex CEO Hur Sae-hong, Indonesia’s Deputy Minister of Energy and Mineral Resources Yuliot Tanjung and other government and company officials.

“The completion of the AGPA Refinery Complex is a tangible achievement in our green-transformation strategy and a meaningful milestone in strengthening GS Caltex’s presence in the global bio market,” Hur said.

The plant, with an annual capacity of 500,000 tons — equivalent to around 80 percent of Korea’s yearly refined palm oil imports — is scheduled to begin commercial operations later this year.

Under the partnership, Posco International will supply crude palm oil from its Indonesian farms, while GS Caltex manages processing using its refining technology. The refined products will be sold in Indonesia, Korea and China, either for biodiesel or for food-grade use after additional processing.

Separately, Posco International acquired a 65.7 percent stake in Indonesia’s Sampoerna Agro Tbk on Wednesday, with additional purchases planned. Sampoerna Agro operates plantations in Sumatra and Kalimantan and owns Indonesia’s second-largest specialized palm seed subsidiary, along with a dedicated R&D center.

The acquisition adds 128,000 hectares of palm farms, expanding Posco International’s total plantation holdings in Indonesia to 150,000 hectares — more than twice the size of Seoul.

Posco International already produces about 210,000 tons of palm oil annually from its existing farms. Because the newly acquired plantations contain mature palm trees, the company expects immediate production gains.

Posco Group has designated palm oil as a future growth sector, citing both rising global demand and Korea’s heavy dependence on imported edible oils. The expanded Indonesian operations will help secure supply for Korea while also positioning Posco International to benefit from global shifts toward greener fuels, the company said.

According to Grand View Research, the global palm oil market is projected to grow from $74.5 billion in 2024 to $113.9 billion by 2035, driven by demand for food, cosmetics and biofuel feedstocks. Additional momentum is expected as countries seek sustainable alternatives to fossil fuels.

In Korea, the government is reportedly considering raising the transportation biodiesel blend mandate from 4 percent to as high as 8 percent by 2030, which would further increase domestic demand for refined palm oil.

https://www.koreaherald.com/article/10620338