A palm grove in Indonesia owned by Posco International. (Posco International)
The trading company is currently seeking to transfer 85% of its stake in an Indonesian palm grove to the city-state holding company.
The transfer will be completed by the end of the year, officials said in Songdo, west of Seoul. The company plans to send professionals next year to develop the palm oil business and seek joint ventures.
Setting up a holding company in Singapore will provide better physical access to the Asian financial and logistics hub, home to international palm oil companies like Wilmar International and Golden Agri Resources, they added.
Posco International launched its palm oil business in Indonesia in 2011 and began commercial production of crude palm oil five years later.
Crude palm oil production is expected to reach 170,000 tons this year, compared to 56,000 tons produced in 2018.
The company expects operating profit to hit $63 million this year, up from $7 million in 2018.
“The food industry, along with steel and energy, is the main growth activity of the company, and in particular, it is time to extend the front and back value chains according to the growth that we have achieved so far. The Singapore-based holding company will be developed into a maintenance company that can conduct its own palm business, and on this basis, it will become a food company in the ASEAN region,” said an official from Posco International.
By Hong Yoo (email@example.com)