POSCO INTERNATIONAL and GS Caltex Jointly Pursue Palm Oil Refining Business
2023.10.12
POSCO INTERNATIONAL and GS Caltex
Jointly Pursue Palm Oil Refining Business

- Signed an agreement with GS Caltex to jointly pursue palm oil refining business in Indonesia on the 12th
- Making joint investment of USD 210 million in a refinery company to produce 500,000 tons of refined oil annually
- Jointly seeking to expand into eco-friendly energy businesses such as sustainable aviation fuel (SAF) following the palm oil refining business

In the process of transforming itself into an eco-friendly integrated corporation, POSCO INTERNATIONAL has partnered with GS Caltex to start the palm oil refining business in earnest.

On the 12th, the two companies held a signing ceremony at the POSCO Center for a joint project of constructing a biofuel refinery in Indonesia, with POSCO INTERNATIONAL Vice Chairman Jeong Tak and GS Caltex President Heo Se-Hong in attendance.


Acquired through the process that increases added value by utilizing crude palm oil produced from oil farm plantations, the palm oil acquired is used in various fields, such as agro, cosmetics, and bioenergy.

Through this agreement, POSCO INTERNATIONAL and GS Caltex will jointly invest USD 210 million in AGPA Refinery Complex (ARC), which was established in Indonesia in March of this year for palm oil refining business. The investment ratio will be 60:40 between the two.

ARC will use the investment to build a palm oil refinery on a 300,000 m2 site at the Balikpapan Industrial Complex in Kalimantan Timur, Indonesia in the first quarter of 2024. The refinery will produce 500,000 tons of refined oil annually starting in the second quarter of 2025, and the products will be sold not only to the Indonesian domestic market but also to neighboring countries, such as Korea and China.

The joint promotion of the refinery project was possible because POSCO INTERNATIONAL's business needs to expand the value chain of the palm business and GS Caltex's business needs to secure raw materials and production bases due to the increasing demand for biofuels were well aligned. In addition, the business interests of POSCO INTERNATIONAL, which is expanding as a global eco-friendly integrated business company, and GS Caltex, which is accelerating its green transformation, were also aligned.

The two companies will expand beyond the palm oil refining business to eco-friendly biofuel and other next-generation energy businesses, such as sustainable aviation fuel. To this end, POSCO INTERNATIONAL and GS Caltex will introduce a waste palm oil recovery facility to deal with waste palm oil generated by palm oil plantations and consider building a sustainable aviation fuel plant that will recycle the waste palm oil recovered from the ARC site.

Having developed oil palm plantations on the island of Papua, Indonesia in 2011, POSCO INTERNATIONAL produced its first crude palm oil in 2018, and has continued to grow ever since by producing 186,000 tons of crude palm oil, achieving USD 170.8 million in sales and USD 80.36 million in operating profits last year.


Palm oil has the highest productivity per unit area of any vegetable oil, which is 10 times higher than soybean oil and 7 times higher than sunflower oil. Additionally, the strengths of this crop are recognized by experts due to its ability to be harvested for over 20 years once planted, as well as being environmentally friendly by using less land and water compared to other plantations.

POSCO INTERNATIONAL has been sincerely committed to coexistence with local communities through its palm business. In 2020, the company became the first Korean company to declare NDPE*, a policy for environmentally and socially responsible palm oil industry to protect the environment and the human rights and any other rights of local residents. In 2021, the company obtained RSPO** certification, which is an internationally recognized certification for sustainable palm oil.
*No Deforestation, No Peat, No Exploitation, **Roundtable on Sustainable Palm Oil

"The palm oil business has a bright future as global population growth and industrial demand for bio-chemicals are expanding," remarked a POSCO INTERNATIONAL official. "We plan to expand the value chain beyond palm oil production to refining and expand into various new businesses, such as bioenergy, agro, and chemistry of fat and oil."
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Posco International Corporation published this content on 12 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 October 2023 23:46:40 UTC.