HD Hyundai Oilbank CEO Chu Young-min (left) shakes hands with Korindo Group Chairman Robert Seung after signing an agreement at Korindo Group's headquarters in Jakarta, Indonesia, in October. (HD Hyundai Oilbank)

HD Hyundai Oilbank announced Tuesday that it has signed two new agreements to secure some 80,000 tons annually of palm fatty acid distillates, a key renewable raw material for biodiesel production, as part of its push to propel its biofuel business.

Through the latest deals, Hyundai has managed to stabilize and bolster the supply chain for its biodiesel plant with a total annual capacity of 130,000 tons, set to be operational by the end of this year, the company added.

In an agreement inked with Korindo Group, a South Korean firm based in Indonesia, Hyundai secured 40,000 tons of PFAD annually, while also agreeing to cooperate on various projects in the biomass business and in reforestation projects designed to curb carbon emissions.

Korindo Group, founded in 1969, is a leading company in the palm industry in Indonesia with a diverse business portfolio encompassing paper manufacturing, palm trading and logistics.

“We highly anticipate great synergy with Korindo Group (which has) expertise in diverse business areas. Through this partnership, we will explore various collaboration opportunities, not just limited to the field of PFAD,” HD Hyundai Oilbank CEO Chu Young-min said.

Hyundai secured an additional supply of PFAD through a separate purchase deal signed with LX International, another Korean firm that has a strong foothold in Indonesia’s palm industry. The company currently owns a palm tree farm spanning 24,000 hectares and is actively engaged in the local palm oil distribution businesses.

In recent years, Hyundai has been ramping up its efforts to expand its presence in the biofuel business, identifying it as its new growth engine.

By 2025, it aims to complete a plant for eco-friendly bio-jet fuel, with a total annual capacity of 500,000 tons.