POSCO International has completed a fully integrated palm oil value chain in Indonesia following its acquisition of one of the country's leading plantation companies and the inauguration of a large-scale refinery developed with GS Caltex. The moves, announced on 19 November, significantly expand the Korean group's footprint in biofuel feedstock and strengthen long-term supply security for the region.
The company secured management control of Indonesia-listed Sampoerna Agro through an estimated KRW 1.3 trillion (about USD 1.0 billion) investment, adding 128,000 hectares of mature palm plantations across Sumatra and Kalimantan. The acquisition increases POSCO International's total plantation area to 150,000 hectares, including existing assets in Papua. Sampoerna Agro also brings a leading palm seed subsidiary and research institute with strong domestic market share.
Because the newly acquired plantations are already mature, POSCO International expects the assets to generate stable profits immediately. The company's Papua plantations, which entered commercial production in 2016, have delivered an average operating margin of 36% in recent years, supported by annual production of 210,000 tonnes of crude palm oil (CPO).
POSCO International, formerly known as POSCO Daewoo, has evolved beyond its origins as a steel trading and shipping business. Today it serves as the POSCO Group's global trading, energy, and agro-industry arm, reflecting the group's strategy to diversify into high-growth sectors outside traditional steel. Its operations now span gas exploration, LNG value chains, secondary battery materials, food resources, and renewable energy, positioning the company as a broader energy and materials solutions provider.
Its expansion into palm oil and biofuel feedstock aligns with the POSCO Group's "New Engine" strategy, which prioritises future energy security and low-carbon growth. Korea relies heavily on imports for edible oils and biofuel raw materials, and securing upstream plantations and refining capacity gives POSCO International greater supply stability, reduced cost volatility, and a stronger platform for national food and energy security. Integrated palm operations -- from seed development to refining -- also position the group to serve rising regional demand for biodiesel and other renewable feedstocks.
On the same day as the acquisition announcement, POSCO International and GS Caltex held an inauguration ceremony for the PT AGPA Refinery Complex (PT ARC) in Balikpapan, East Kalimantan. The joint venture, 60% owned by POSCO International and 40% by GS Caltex, represents a USD 210 million investment and has an annual refining capacity of around 500,000 tonnes -- equivalent to nearly 80% of South Korea's annual refined palm oil imports. Construction began in May 2023.
The facility will process CPO supplied by POSCO International into refined palm oil products, including feedstock for biodiesel. The output will be marketed in Indonesia and exported to South Korea, China, and other Asian markets. GS Caltex said the refinery provides a stable supply of biodiesel feedstock, including palm stearin, and strengthens the company's increasing focus on global bio-based operations.
Saehong Hur, GS Caltex's chief executive, said the completion of ARC represents tangible progress in the company's green transition strategy and will support broader competitiveness across its low-carbon business portfolio, which includes hydrogen, CCUS, and plastic recycling initiatives.POSCO International stated that the integrated value chain -- from seed development and plantations to refining -- reinforces the POSCO Group's long-term efforts under Chairman Jang In-Hwa to expand future growth businesses and support food and energy security.