November 24, 2025 [Storage Terminals Magazine]- POSCO INTERNATIONAL has established a comprehensive palm oil value chain spanning from seed development to biofuel feedstock production through two simultaneous strategic initiatives in Indonesia. Last week, the company secured management control of Sampoerna Agro, one of Indonesia’s leading palm companies, while inaugurating a major new palm oil refinery on the same day.
On November 19, POSCO INTERNATIONAL acquired shares in the Indonesian-listed company Sampoerna Agro, becoming its largest shareholder and securing management control. The acquisition, designed to expand the company’s global palm business value chain, represents a total investment of approximately KRW 1.3 trillion based on the exchange rate at the time of disclosure.
The acquisition adds 128,000 hectares of plantations—an area more than double the size of Seoul—to POSCO INTERNATIONAL’s portfolio. Combined with existing plantations in Papua, Indonesia, the company now controls a total global farming base of 150,000 hectares.
As a prominent Indonesian-listed company, Sampoerna Agro operates palm plantations across Sumatra and Kalimantan islands. The company owns a palm seed subsidiary and research institute that hold the second-largest domestic market share in Indonesia.
A key advantage of the newly acquired plantations is their immediate profitability potential, as the palm trees have already reached maturity. The palm plantation business operates as a long-term, high-return industry, with harvesting becoming viable three to four years after planting and production continuing for over 20 years.
POSCO INTERNATIONAL’s existing palm operations began with plantation development in Papua in 2011, entered commercial production in 2016, and currently operate three milling plants producing 210,000 tons of palm oil annually. The mature plantations have contributed significantly to group profitability, recording an average operating profit margin of 36% through last year.
On the same day, POSCO INTERNATIONAL held the completion ceremony for PT. ARC (PT. AGPA Refinery Complex), a palm oil refining joint venture established with GS Caltex in Balikpapan, East Kalimantan, Indonesia.
PT. ARC operates under a partnership structure with POSCO INTERNATIONAL holding 60 percent ownership and GS Caltex holding 40 percent, representing a total investment of USD 210 million. The newly completed refinery boasts an annual refining capacity of 500,000 tonnes, equivalent to approximately 80 percent of South Korea’s annual imports of refined palm oil.
The ceremony drew approximately 100 key figures, including POSCO INTERNATIONAL CEO Lee Kye-In, GS Caltex CEO Heo Se-Hong, Indonesian Deputy Minister of Energy and Mineral Resources Yuliot Tanjung, Mayor of Balikpapan Rahmad Mas’ud, and Korean Ambassador to Indonesia Park Soo-Deok.
The refinery, which broke ground in May of the previous year, will undergo trial operations before commencing full production later this year.
POSCO INTERNATIONAL will supply crude palm oil produced from its plantations to PT. ARC, with the refined oil being sold in the Indonesian domestic market and exported to South Korea, China, and other countries. GS Caltex plans to apply its accumulated expertise to enhance operational efficiency at the refining facilities and supply refined palm oil for biodiesel to the Korean market.
The integrated operations are expected to strengthen the POSCO Group’s competitive position in the global palm oil market while reducing South Korea’s dependence on imported edible oils and establishing a stable production and supply base to enhance national food security.
Since chairman Jang In-Hwa assumed office, the POSCO Group has actively pursued future growth businesses for stable profit generation. The expansion of the Indonesian palm oil business represents part of the group’s broader infrastructure initiatives, leveraging POSCO INTERNATIONAL’s extensive experience in overseas agribusiness operations.
To bolster future competitiveness, the POSCO Group restructured its business portfolio last year into a “Two Core (steel + secondary battery materials) + New Engine (new growth businesses)” framework. The group is executing strategic investments to secure positions in high-growth, high-return markets including India and North America. In India, the group is pursuing the establishment of a local steel mill in partnership with the JSW Group. In September, the company signed an MOU with Cleveland-Cliffs for cooperation in the steel business to proactively address trade barriers and accelerate its entry into the North American market.
