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South Korean oil refiner Hyundai Oilbank and Lotte Confectionery have signed a deal to produce biodiesel from used cooking oil (UCO), the Korean JoonAng Daily reported.

As part of the agreement, Lotte Confectionery would supply by-products made during the company’s food manufacturing process – mostly UCO – to Hyundai Oilbank to be used as a biodiesel feedstock, the report said.

A new 130,000 tonnes/year biodiesel production facility was being built by Hyundai Oilbank at its Daesan plant in Seosan, South Chungcheong, which was due for completion by next year, the Korean JoonAng Daily wrote.

The two companies are also considering establishing a joint venture for overseas expansion and raw material procurement, according to the 1 August report, while planning to broaden their co-operation to areas outside feedstock sourcing.

“HD Hyundai and Lotte Group have been strengthening the partnership with each other through Hyundai Chemical, a joint petrochemicals company between Hyundai Oilbank and Lotte Chemical,” Lee Seung-soo, head of the global business division at Hyundai Oilbank, said.

“We expect this collaboration to mark another starting point for the two companies to explore new opportunities for joint businesses,” he added.

Hyundai was established in 1964 as Kukdong Oil Industry Company and later taken over by the Hyundai Group. It is currently a part of the Hyundai Heavy Industries Group.

According to its website, Seoul-headquartered Lotte Confectionery produces more than 200 gum, chocolate and biscuit products, which are sold in more than 70 countries. The company has production facilities in Yeongdeungpo, Yangsan, Pyeongtaek and Daejeon.