POSCO International, NongHyup Feed team up for stable animal feed supply

The Korea Times

The Korea Times

Business

Wed, November 29, 2023 | 23:46

Companies

POSCO International, NongHyup Feed team up for stable animal feed supply

Posted : 2022-11-09 16:40

Updated : 2022-11-09 17:05

POSCO International CEO Joo Si-bo, left, and NongHyup Feed CEO Jeong Sang-tae hold copies of a signed memorandum of understanding (MOU) at the POSCO affiliate's headquarters in Seoul, Wednesday. Courtesy of POSCO International

By Lee Kyung-min

POSCO International, a trading affiliate of steel giant POSCO, is strengthening its cooperation with NongHyup Feed, an animal feed manufacturing affiliate of the National Agricultural Cooperative Federation, for a stable supply of key input produce materials, according to the two firms, Wednesday.

The joint cooperation is one of the latest public-private initiatives to fortify food security for local animal feed manufacturers, long criticized for relying on other global peers for importing up to 75 percent of feed input materials.

The NongHyup affiliate with a domestic market share of 31 percent will be able to maintain product cost advantages over imports, as underpinned by a stable supply of corn and palm oil sludge managed and stored in overseas grain terminals operated by the POSCO affiliate.

POSCO International CEO Joo Si-bo and NongHyup Feed CEO Jeong Sang-tae signed a memorandum of understanding (MOU) at the POSCO affiliate's Seoul office, Wednesday.

Key areas of cooperation include the stable supply of grain kept at POSCO International, long-term supply contracts for feed input materials, joint overseas food businesses and investments, as well as the exchange of information and knowledge mediated by the POSCO affiliate's global network.

Of the 21 million tons of animal feed needed a year, 16 million tons, or 75 percent, are imported.

The NongHyup affiliate processes corn and wheat imported from the U.S., South America and Ukraine.

Wednesday's MOU is the latest in a series of strategic investments by POSCO International seeking to elevate its energy and food businesses as a core growth driver, as buttressed by its years of trading experience.

The firm plans to invest 3.8 trillion won ($2.7 billion) in the energy sector by 2025, as buoyed by the recent acquisition of POSCO Energy, Nov. 4, about seven months after it took over Senex Energy, an Australian producer of natural gas, on March 31.

The natural gas production capabilities of Senex will triple over the next three years. At least 1.6 trillion won will be spent in the same period to fortify existing natural gas storage facilities in Dangjin, South Chungcheong Province, and Gwangyang, South Jeolla Province.

"We will continue to strengthen such meaningful cooperation to help generate a positive outcome for the local animal feed industry," Joo said.

lkm@koreatimes.co.kr