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Posco International, GS Caltex to build $210m palm oil refinery in Kalimantan
Two South-Korean companies signed a US$210 million deal on Thursday to establish a palm oil refinery at the Balikpapan industrial complex in East Kalimantan.
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POSCO International Vice Chairman Jeong Tak (right) and GS Caltex CEO Hur Sae-hong (left) pose on Oct. 12 at the POSCO Center in Seoul after signing an agreement to make a joint investment in an Indonesian palm oil refining business. (POSCO International/-)
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wo South Korean companies, Posco International Corp., the trading arm of steel firm Posco, and chemical firm GS Caltex Corp, signed a US$210 million deal on Thursday to establish a palm oil refinery at the Balikpapan industrial complex in East Kalimantan.
Through this agreement, the two companies decided to jointly invest in the AGPA Refinery Complex (ARC), a corporation established last March in Indonesia to refine palm oil.
The ARC will be a part of a larger plan to produce bio-aviation fuel (BAF) in Indonesia to meet demand for sustainable aviation fuel (SAF).
“Amid the increase in global population and growing demand for biochemicals, the palm oil business has become promising,” POSCO International said in a statement.
“Beyond the palm oil production, our company will engage in refining, so that we can expand the value chain to various new business sectors, such as bioenergy, foods and chemistry of fat and oil.”
Posco International will own 60 percent of the ARC while GS Caltex will own the remaining 40 percent.
ARC plans to use the fresh funds to begin construction of the palm oil refinery in the first quarter of 2024.
