SK and Carlin Le: Chemical Recycling of Waste PET

Recently, SK Chemicals announced that by collaborating with Chinese plastic recycling companies, it has independently secured the raw materials needed for recycling, achieving vertical integration of its recycling business for the first time in South Korea.

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Establish a joint venture to build a raw material innovation center.

On December 10th, SK Chemicals (represented by CEO An Jae-hyun) announced that it has reached an agreement with Kelinle, a plastic recycling specialist company in Shaanxi Province, China, to jointly establish a joint venture company to build a "Feedstock Innovation Center" (FIC) for processing waste plastics.

The establishment of this center means that SK Chemicals will build a complete value chain that covers the procurement of waste plastics, pretreatment, and the production of chemically recycled materials. This move makes SK Chemicals the first chemical company in South Korea to have both waste plastic procurement and pretreatment facilities while engaging in chemical recycling business.

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Processing difficult-to-recycle waste to produce PET granules.

The parties plan to build an FIC on approximately 4,000 ping of idle land owned by Corintech in Weinan City, Shaanxi Province, China, to process waste plastic into PET pellets.

Raw material sourceUnlike conventional recycling, which primarily uses PET bottles, this center focuses on processing waste mattresses that are traditionally difficult to recycle, as well as the fine particles (micro-powder) generated during the crushing of PET bottles.

Technical CooperationKolinle will leverage its ten years of local plastic recycling business experience and resources to handle raw material procurement, while SK Chemical will provide technical support for pretreatment.

Production scaleThe plan is to start with an initial annual production of approximately 16,000 tons of PET and gradually expand to a scale of 32,000 tons per year, aiming to supply the majority of raw materials needed for the SK Shantou factory.

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Stable supply and enhance cost competitiveness.

SK Chemical positions its plastic recycling business as a future growth driver, and the establishment of its own raw material supply system is expected to significantly enhance the competitiveness and stability of this business.

Ensure stable supply.SK Chemical's chemical recycling (depolymerization) business breaks down waste plastics into molecular-level raw materials to re-synthesize plastics, making waste plastics equivalent to basic raw materials. By obtaining raw materials directly through a joint venture, it can avoid the risks of price fluctuations and supply instability associated with external procurement.

Enhance cost advantagesThe center processes raw materials such as old bedding, achieving a lower cost than easily recyclable transparent PET bottles. The company analyzes that after the center becomes operational, it is expected to reduce the cost of waste plastic raw materials by about 20%, thus breaking the price barrier of recycled plastics compared to petrochemical-based materials.