Hyundai Oilbank, Lotte Confectionery tie up for biodiesel business

Hyundai Oilbank Co., a South Korean refiner backed by Saudi Aramco, and food maker Lotte Confectionery Co. have forged a strategic partnership to jointly seek business opportunities in the biodiesel sector.

Under the deal signed on Monday, Lotte will supply byproducts made during the food manufacturing process, such as used cooking oil, to Hyundai for use as feedstock for biodiesel.

Biodiesel is a form of diesel fuel derived from plants or animals. It is a renewable, biodegradable fuel manufactured from vegetable oils, animal fats, or recycled restaurant grease.

Hyundai Oilbank, a unit of HD Hyundai Co., formerly known as Hyundai Heavy Industries Holdings Co., is building a biodiesel fuel plant with an annual production capacity of 130, 000 tons at the Daesan petrochemical complex in Seosan, 130 km southwest of Seoul. The plant is set to be completed by 2023.

HD Hyundai is the largest shareholder of Hyundai Oilbank with a 74.1% stake, followed by Saudi Aramco with a 17% stake.

Hyundai and Lotte said they are also considering launching a joint venture to enter the overseas biodiesel market and procure raw materials.

WHITE BIO

Hyundai Oilbank has been tapping into the white biotechnology market, with an aim to transform into an eco-friendly company.

The company said in May it has selected white bio as its future business, alongside blue hydrogen and eco-friendly chemicals and materials for sustainable growth.

White bio uses living cells from plants, enzymes and microorganisms to produce energy with a lower carbon footprint.

Hyundai Oilbank Chief Executive Chu Young-min said new businesses such as white bio, blue hydrogen and other eco-friendly projects will account for up to 70% of its entire business profits by 2030.

The biodiesel partnership between Hyundai and Lotte follows a similar tie-up in 2014 when Hyundai Oilbank and Lotte Chemical Corp. established a petrochemical joint venture, Hyundai Chemical Co.

Lotte Confectionery said it plans to expand its biotechnology acquired through its partnership with Hyundai into the cosmetics sector.

Write to Kyung-Min Kang and Soo-Jung Ha at Kkm1026@hankyung.com
In-Soo Nam edited this article.