Posco International, the trading arm of the country’s leading steelmaker Posco, has set up a holding company in Singapore to expand its palm oil business, the company said Wednesday.

The trading company is currently seeking to transfer 85 percent of its stake in an Indonesian palm farm to the holding company in the city state.

The transfer will be completed by the end of the year, officials in Songdo, west of Seoul, said. The company plans to dispatch professionals next year to expand the palm oil business and look for joint ventures.

Setting up a holding company in Singapore will offer better physical access to the Asian financial and logistics hub, which is home to international palm oil companies like Wilmar International and Golden Agri Resources, they added.

Posco International started its palm oil business in Indonesia back in 2011 and kicked off commercial production of crude palm oil five years later.

The production of crude palm oil is expected to reach 170,000 tons this year, up from 56 thousand tons produced in 2018.

The company expects to see its operating profit reaching $63 million this year, up from $7 million back in 2018.

“The food business, along with steel and energy, is the company‘s main growth promoting business, and in particular, it is time to expand the front and rear value chains based on the growth we‘ve reached so far. The Singapore-based holding company will be developed into a maintenance company that can carry out its own palm farm business, and based on this, it will grow into a food business company in the ASEAN region,” an official from Posco International said.