SK Trading lands 40% stake in Korean waste fats supplier

In South Korea, SK Trading International signed a share purchase agreement for equity investment in Daekyung O&T on Monday. For this contract, SK Trading International formed a consortium with Korea Development Bank’s Private Equity Division and Eugene Private Equity. The three companies plan to establish a Special Purpose Company (SPC) to acquire a 100% stake in Daekyung O&T. Within the SPC, SK Trading International will hold a 40% stake, while Korea Development Bank and Eugene PE will collectively hold the remaining 60%. The detailed terms of the shareholding structure will not be disclosed due to contractual obligations.

Established in 1995, Daekyung O&T specializes in the production of waste-based raw materials at its 13 business sites nationwide. It is the country’s largest company supplying raw materials, such as animal fats from slaughterhouse waste and Used Cooking Oil (UCO) from restaurants and food factories, for biodiesel and bio-aviation fuel.

Animal fats and UCO are gaining attention as key raw materials for bio-aviation fuel among sustainable aviation fuels (SAF) as the SAF market expands. These materials are not subjected to global regulations due to their waste-recycling nature, and they offer greater carbon reduction benefits compared to plant-based raw materials like Soybean oil.

SK Trading International views this investment as leverage for securing raw materials for bio-aviation fuel. Unlike ground transportation, which is transitioning to batteries and fuel cells as fossil fuel alternatives, aviation transportation is constrained by battery density limitations and safety, making the use of liquid fuel unavoidable for the future. As a result, nations worldwide are exploring alternatives, such as biofuels and synthetic crude oil, to reduce carbon emissions throughout the aviation fuel consumption process.