POSCO International Acquires Major Indonesian Palm Company for 1.3 Trillion Won, Completes "Full Value Chain"

Securing Management Control of Sampoerna Agro
Holding Farmland Twice the Size of Seoul
Establishing Local Refining Plant with GS Caltex
Enabling Full Value Chain from Seed Development to Production

POSCO International has acquired Sampoerna Agro, an Indonesian plantation company, for 1.3 trillion won, thereby securing farmland more than twice the size of Seoul. On this day, the company completed a local palm oil refining plant, thus establishing a complete value chain from palm seed development to the production of palm oil, which serves as a raw material for biofuel.

Transporting palm fruits harvested from the Sampoerna Agro Farm in Indonesia. POSCO International

POSCO International announced on the 20th that it has acquired shares of Sampoerna Agro, a listed Indonesian company, thereby securing management control and becoming the largest shareholder.

Sampoerna Agro operates palm plantations across Sumatra and Kalimantan in Indonesia. The company also owns a subsidiary and a research institute specializing in palm seeds, which together hold the second-largest market share in Indonesia.

With this acquisition, POSCO International has added 128,000 hectares of farmland to its portfolio. Palm plantation businesses can harvest crops from three to four years after planting for up to 20 years. Notably, Sampoerna Agro's plantations have already reached the mature stage, which means stable profits can be generated from the early stages of the acquisition. Including its existing Papua plantation in Indonesia, POSCO International now possesses a total of 150,000 hectares of global agricultural land.

POSCO International began developing palm plantations in Papua in 2011, started commercial production in 2016, and currently operates three oil extraction plants with an annual production capacity of 210,000 tons of palm oil. As its existing plantations have matured, the company recorded an average annual operating margin of 36% through last year.

Panorama of Sampurna Agro Milking Plant in Indonesia. POSCO International

POSCO International's series of palm plantation acquisitions are part of POSCO Group's efforts to strengthen future competitiveness. Last year, the group reorganized its business portfolio under the "2 Core (Steel, Secondary Battery Materials) + New Engine (New Businesses)" strategy and has been making strategic investments to preempt high-growth, high-profit markets. The aim is to increase profitability by securing biofuel sources while also reducing carbon emissions.

A POSCO International representative stated, "By acquiring palm plantations more than twice the size of Seoul, we expect to reduce the country's dependence on imported edible palm oil and establish a stable production and supply base, thereby contributing to national food security. Since palm oil is also used as a biofuel, this move aligns with the global trend toward energy transition."

On the 19th (local time), attendees are taking a commemorative photo at the inauguration ceremony of the palm oil refinery plant in Balikpapan, East Kalimantan, Indonesia. From the fourth person on the left: Cheon Sungrae, Head of Business Synergy Division at POSCO Holdings; Lee Seunghun, Head of Supply & Trading Division at GS Caltex; Heo Sehong, President of GS Caltex; Lee Gyein, President of POSCO International; Park Sudeok, Charge d'Affaires of the Embassy of the Republic of Korea in Indonesia; Moon Jinseok, Vice Chairman of Korindo Group. POSCO International

Photo by POSCO International

On the 19th (local time), POSCO International held an inauguration 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 is owned 60% by POSCO International and 40% by GS Caltex, with a total investment of 210 million dollars.

Approximately 100 key figures attended the inauguration ceremony, including Lee Gyein, President of POSCO International; Heo Sehong, President of GS Caltex; Yuliot Tanjung, Vice Minister of Energy and Mineral Resources of Indonesia; Rahmad Mas'ud, Mayor of Balikpapan; and Park Sudeok, Charge d'Affaires of the Embassy of the Republic of Korea in Indonesia. PT. ARC has an annual refining capacity of 500,000 tons, which is equivalent to 80% of the palm oil refined and imported into Korea each year. Construction of the plant began in May last year, and after trial operations following completion, production is scheduled to begin within the year.

Through the expansion of its palm business value chain, POSCO International plans to supply crude palm oil produced at its plantations to PT. ARC, and the refined oil produced there will be sold not only in Indonesia but also in Korea, China, and other markets. GS Caltex will focus on enhancing operational efficiency at the refinery and supplying refined oil for biodiesel to the Korean market.