POSCO International Corp., the energy and trading arm of steel giant POSCO Holdings Inc., has injected an additional 1.26 trillion won ($862 million) into Agpa Pte Ltd., which oversees the South Korean company’s vegetable oil refining business in Southeast Asia.
The capital injection, made through a rights offering subscription, raised POSCO International’s ownership in the Singaporean holding firm to 100%.
POSCO International began developing palm plantations in Papua, Indonesia in 2011 and started commercial production in 2016 as part of its strategy to expand its agri-food business across Southeast Asia.
It currently operates three oil extraction plants, producing 210,000 tons of palm oil annually.
This month, the company is set to complete a palm oil refining plant in partnership with GS Caltex Corp. in Kalimantan, Indonesia with an annual capacity of 500,000 tons. GS Caltex is South Korea’s second-largest oil refiner.
The two companies have invested a total of 260 billion won in the facility, which will produce bio feedstocks and edible oils for both the Indonesian market and neighboring Southeast Asian countries.
Palm oil is extracted from the fruit of the palm oil tree. After refining, the oil derived from the seed of the palm fruit is used as cooking oil and eco-friendly raw materials.
The by-product powder, made by crushing the leftover pulp and shell after oil extraction, is used as an ingredient in cosmetics, soap and detergents.
