POSCO INTERNATIONAL : to Establish a Holding Company in Singapore for Its Agro Business

POSCO INTERNATIONAL

to Establish a Holding Company

in Singapore for Its Agro Business

- Transferring the Company's 85% stake in its Indonesian palm oil corporation to the holding company by the end of this year
- Expanding the value chain into the upstream and downstream sectors to acquire new palm plantations and building palm oil refinery plants

POSCO INTERNATIONAL (President Joo Si-Bo) has recently established a holding company in Singapore to expand its palm oil business.

POSCO INTERNATIONAL decided to 'Establish a holding company for palm oil business in Singapore' at the Board of Directors meeting held at the end of October, and created a limited company named AGPA in Singapore in early November. Work is currently underway to transfer the Company's 85% stake in its Indonesian palm plantation to the holding company. Following the completion of the equity transfer by the end of this year, the Company is set to assign expert employees to the holding company from 2022 onwards and fully initiate business operations to expand the palm oil business value chain and look for joint venture investors among others.

Some of the reasons that drove the Company to establish a holding company in Singapore include limitations in business expansion that are inherent in the current business structure centered around its Indonesian palm oil corporation (PT. BIA*) and the necessity to shift to a more optimal governance structure to further advance its investment business.

* PT.BIA : PT Bio Inti Agrindo

Singapore is home to a number of major palm oil companies including Wilmar and Golden Agri Resources, and its status as a financial and logistics hub provides advantages in readily managing and operating palm business as a whole while expediently responding to market conditions.

POSCO INTERNATIONAL plans to leverage the holding company to acquire new palm plantations that generate synergy with its existing palm oil business and invest in palm oil refining and biofuel plants as well as biofuels derived from renewable raw materials in order to broaden its green business value chain.

The Company started its palm oil business back in 2011 in Indonesia, and has made remarkable progress in just one decade. Since the initiation of commercial CPO (Crude Palm Oil) production in 2016, PT. BIA has posted 56,000 tons in production in 2018 and is expected to reach 170,000 tons in production this year. Its operating profit, which stood at USD 7 million in 2018, has grown rapidly to USD 15 million in 2020, and is estimated to surge to USD 63 million in 2021.

POSCO INTERNATIONAL has not just met but exceeded international standards in implementing environmental policies for the stable operation of its palm oil business. The Company achieved Indonesia's sustainable palm oil certification ISPO (Indonesian Sustainable Palm Oil) in 2019, and the global sustainable palm oil certification RSPO (Roundtable on Sustainable Palm Oil) to pave the way to sustainably conduct palm oil business. In addition, the Company became the first Korean business to announce the NDPE (No Deforestation, No Peat, No Exploitation) policy in 2020 to protect the due rights and human rights of indigenous peoples all while producing palm oil, and has since provided free-of-charge economic assistance and infrastructure support -education, health care and housing - to help improve the quality of life for local community members.

"Agro business, along with steel and energy business, constitutes our key growth business areas, and it is time that we expand our value chain into the upstream and downstream sectors on the basis of growth that we have achieved over the years", an official from POSCO INTERNATIONAL stated, and added "We will ensure that our holding company established in Singapore develops expertise to independently conduct palm oil business and builds on this success to emerge as a top-tier agro business player in the ASEAN region".