A view of Sampoerna Agro’s palm plantation in Indonesia, newly acquired by POSCO International. (Provided by POSCO International.)
SEOUL, Nov. 20 (Korea Bizwire) — POSCO International is deepening its push into the global biofuel market with a sweeping expansion of its palm oil business, announcing a major acquisition in Indonesia alongside the completion of a new refinery jointly built with GS Caltex.
The company said on Nov. 20 that it has acquired a controlling stake in Sampoerna Agro, a large Indonesia-listed palm producer, securing management rights and becoming its largest shareholder. The deal, valued at roughly 1.3 trillion won (about US$1 billion), marks one of POSCO International’s largest overseas agribusiness investments to date.
With the acquisition, the company adds 128,000 hectares of farmland — more than twice the size of Seoul — to its portfolio. Combined with its existing plantation in Papua, POSCO International now controls 150,000 hectares of palm estates globally, strengthening its vertical integration across the palm oil value chain.
Sampoerna Agro operates plantations across Sumatra and Kalimantan and owns Indonesia’s second-largest palm seed subsidiary and a research institute. Palm plantations typically enter full production three to four years after planting and can continue yielding for over two decades, offering stable, high-margin returns.
POSCO International noted that the newly acquired farms are already in the mature fruit-bearing stage, enabling immediate profitability.
A worker applies fertilizer at a Sampoerna Agro palm plantation. (Provided by POSCO International.)
The company first entered the palm business in Papua in 2011 and began commercial production in 2016. It now operates three processing plants capable of producing 210,000 tons of palm oil annually, generating an average operating margin of 36 percent in recent years.
On the same day, POSCO International also held a completion ceremony for PT ARC, a palm oil refinery jointly established with GS Caltex in Balikpapan, East Kalimantan. POSCO International owns 60 percent of the venture and GS Caltex the remaining 40 percent, with total investment reaching US$210 million.
The new refinery has an annual processing capacity of 500,000 tons — equivalent to about 80 percent of the refined palm oil imported into South Korea each year. Construction began in May of last year, and production is expected to begin later this year following test operations.
Under the partnership, POSCO International will supply crude palm oil from its plantations to PT ARC, while GS Caltex will oversee refinery operations and supply refined palm oil for biodiesel production in the Korean market. Output will also be sold in Indonesia, China, and other regional markets.
A company official said the expansion positions POSCO Group to play a leading role in the global palm oil sector, reducing Korea’s reliance on imported edible oils while strengthening supply stability for both food and biofuel markets.
Ashley Song (ashley@koreabizwire.com)
