Trading Companies Accelerate Efforts to Secure High-Value Food Products in Southeast Asia
Active Consideration of Resource Development and Renewable Energy Projects in Southeast Asia
[Asia Economy Reporter Ki-min Lee] General trading companies, which have been focused on trading-centered businesses, are actively expanding into Southeast Asia to secure future growth engines. In the past, general trading companies' Southeast Asia businesses mainly involved food-related sectors such as palm oil and mangoes, but recently they have shifted towards high value-added businesses like resources and energy.
According to the industry on the 12th, LX International is reviewing a nickel mining project in Indonesia. Based on past experience in Indonesian coal development projects, it is known that they are considering direct development rather than acquiring nickel mines.
Nickel is a key material for battery cathodes, and as demand for battery electric vehicles increases, the use of nickel is also expected to rise. For this reason, automobile and electric vehicle companies are considering building battery factories directly in Indonesia. LG Energy Solution and Hyundai Motor Group will soon begin construction of a battery joint venture in Indonesia.
An industry insider said, "Indonesia prohibits the export of resources such as nickel without processing, making it one of the countries battery companies are considering entering," and added, "If LX International intensifies its nickel mining business, finding trading partners within Indonesia will not be a problem."
In addition, LX International, which has entered the healthcare market based on medical devices such as virus diagnostic kits, is also planning to expand its business including healthcare product distribution and diagnostic solution construction and investment, centered on Indonesia.
Other general trading companies are also actively reviewing resource and renewable energy development projects in Southeast Asia. Southeast Asia is considered a region with abundant energy sources such as geothermal, wind, solar, and biofuels, as well as rich resources and excellent potential for development. Moreover, governments of each country provide various incentives through policy support.
POSCO International is challenging the second gas field myth in Malaysia following Myanmar. Last month, POSCO International won the exploration operation rights for the PM524 block located offshore in the eastern Malay Peninsula from the state-owned oil company Petronas in an international bidding for exploration blocks.
Exploration operations will be conducted for four years from the contract signing date. POSCO International will hold an 80% stake and have the operating rights, while Petronas Carigali, Petronas's oil development subsidiary, will participate as a partner with a 20% stake.
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Samsung C&T, which declared coal phase-out last year as the first non-financial company in Korea, is also seeking to enter Southeast Asia as well as North America in relation to renewable energy businesses such as solar power. Samsung C&T has successfully completed a 1,369 MW wind and solar power complex project in Ontario, Canada.
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