JAKARTA – POSCO International has completed the integration of its palm-oil value chain after acquiring an Indonesian plantation company and finishing the construction of a palm-oil refinery in the country.

As previously reported by IDNFinancials.com, the trading and energy arm of POSCO Group purchased 65.72% of PT Sampoerna Agro Tbk (SGRO) for USD 566 million through its Singapore subsidiary.

Total investment in Indonesia by POSCO is estimated to reach USD 862 million, according to the Korea Times report, as Indonesian capital-market rules require a mandatory tender offer for shares held by minority investors.

The acquisition adds 128,000 hectares to POSCO’s plantation portfolio in Papua, bringing its total global agricultural land to 150,000 hectares.

POSCO began developing its Papua palm-oil estates in 2011 and commenced commercial production in 2016.

The company currently operates three CPO mills with a combined annual capacity of 210,000 tonnes.

Because the newly acquired plantations are already in full production, the company expects this portfolio expansion to significantly boost profits.

“The existing estates record an average operating margin of 36% and will support the profitability of POSCO Group,” a POSCO International official said.

On Wednesday, POSCO International and GS Caltex also marked the completion of the palm-oil refinery they jointly built in Indonesia.

Trial operations will begin shortly, with commercial output targeted to start by the end of this year. The joint venture was established in 2023 with an investment of USD 210 million.

The refinery has a processing capacity of 500,000 tonnes per year, equivalent to 80% of Korea’s refined palm-oil import needs.

POSCO will supply CPO from its plantations to the refinery, which will in turn produce refined palm oil for the markets in Korea, Indonesia and China.

GS Caltex will optimise refinery operations and supply refined palm oil for Korea’s biodiesel requirements.

“By reinforcing its leadership in the global palm-oil sector, POSCO Group aims to reduce Korea’s dependence on imported vegetable oils and contribute to national food security,” the official said.

The expansion is also aligned with POSCO Group Chairman Chang In-hwa’s strategy to build sustainable, future-oriented businesses for stable long-term growth.

Bambang Sulistyo, President Director of the Sampoerna Group, said the company remains committed to focusing on its existing business lines while exploring new opportunities in line with operational needs and developments.

“We are confident that the new owner will be a good home for our employees and will lead SGRO towards better business-growth prospects going forward,” he said in a written statement on Thursday (20/11/2025).

Bambang added that although many investors are interested in Indonesia’s palm-oil industry, POSCO is viewed as the most suitable party to continue SGRO’s positive performance. (DK/KR/ZH)