November 28, 2024

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Lee Sang-hoon (left), executive vice president at Posco International, and Lee Hee-byung, president of the ingredient business unit at Daesang, pose for a photo at a signing ceremony in Seoul, Thursday.

South Korean commodities trader Posco International said Friday it will strengthen its food business overseas by cooperating with Korean food giant Daesang.

The two companies signed a memorandum of understanding to review joint investments in new overseas starch sugar businesses on Thursday.

"We hope that this cooperation with Daesang, who conducts the largest starch business in the country, provides us with the opportunity to expand the value chain of the food business," said Lee Sang-hoon, executive vice president at Posco International.

According to the memorandum, the two companies will cooperate by sharing data collected by subsidiaries abroad and attempt to stabilize supply and demand for ingredients needed to sustain a viable starch sugar business overseas.

"Both companies are putting in efforts to gain the necessary capabilities that will allow us to actively respond to issues regarding national food security, which is growing more and more important nowadays," Lee said.

Starch sugar is a natural substance extracted from crops such as corn, potatoes and wheat tapioca. The substance is used for production of various industrial goods such as adhesives, cosmetics and pharmaceutical products.

According to Posco International, the company is first mainly aiming to expand its starch sugar business in the Southeast Asian market, as Daesang has operated starch sugar-related businesses in a number of Southeast Asian countries including Vietnam, the Philippines and Indonesia since 2007.

"Daesang's global business is improving steadily every year. We hope that Daesang's business in Southeast Asia will expand significantly with this business agreement with Posco International," said Lee Hee-byung, president of the ingredient business unit at Daesang.

By Lee Yoon-seo (yoonseo.3348@heraldcorp.com)