POSCO International to Build Palm Oil Refinery in Indonesia

POSCO International will establish a palm refinery in Indonesia as part of its efforts to transform into a general business company covering energy, food, and eco-friendly parts.

The company announced on Jan. 10 that it has recently decided to enter the palm oil refining 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 operating in the second quarter of 2025. Ground will be broken for it in the fourth quarter of 2023. The refinery will have an annual production capacity of 500,000 tons. Its output will be sold in the Indonesian market and exported to Korea and China as well.

Kalimantan Island is being considered as a potential site for the refinery. The island has geographically favorable conditions for procuring palm raw materials and exporting products.

POSCO International established PT. BIA, a palm plantation corporation in Indonesia, in 2012. In 2021, it transferred its 85 percent stake in PT. BIA to AGPA. Since its launch, PT. BIA has steadily improved profitability, implemented environmental policies to satisfy the demands of the international community, and carried out activities to live in harmony with local communities. In 2020, it declared “No Deforestation, No Peat and No Exploitation (NDPE),” an environmental and social policy to protect the environment and the rights of local residents, for the first time as a Korean company. In 2021, it obtained a Roundtable On Sustainable Palm Oil (RSPO) certification, an international sustainable palm oil certification.

Since 2017, POSCO International has assembled a Korean medical team to provide medical services to local residents in Indonesia and established educational facilities such as kindergartens, elementary schools, and middle schools to offer free educational programs to marginalized students. Recently, it has planted mangrove trees near its places of business to reduce carbon emissions and sponsored a gibbon research project in Indonesia.

Tags: Indonesia, palm oil, Posco International