SK Chemicals to Take the Lead in the $7.6 Billion Recycled PET Market

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Mar 15, 2023, 09:00 ET

Signed a $100 million asset purchase agreement with Shuye of China; secured the world's first mass production system for recycled raw materials and PET
The abundant supply of recycled plastic raw materials enables SK chemicals to have the highest level of price competitiveness and facilitates the development of disruptive recycling technologies
Targeting the market for high-value-added special materials such as industrial fibers to meet various customer demands such as climate neutrality and price

SEONGNAM, South Korea, March 15, 2023 /PRNewswire/ -- SK chemicals accelerates its entry into the global market and business expansion with the world's first chemically recycled BHET (r-BHET) of 70,000MT and chemically recycled PET (CR-PET) of 50,000MT production systems.

SK chemicals announced on the 6th that it held a board of directors meeting and signed an asset transfer agreement related to the chemically recycled BHET and chemically recycled PET business division of Shuye, a Chinese company specializing in green materials. The acquisition price for this deal is approximately 98.4 million dollars.

SK chemicals' acquisition of Shuye's assets includes a depolymerization plant that chemically decomposes waste plastics to produce recycled BHET and a CR-PET production facility that uses the r-BHET produced here to make PET again, which can be sold separately. As a result, SK chemicals has secured the world's first commercially available polyester chemically recycled raw materials and production facility, which can be sold separately.

Through the acquisition of Shuye's assets, SK chemicals has obtained a commercial production system for chemically recycled BHET and products that utilize depolymerization technology about 1-2 years ahead of other domestic companies. By producing recycled plastic raw materials such as waste PET in China, where there is abundant supply, SK chemicals is expected to gain a high level of price competitiveness.

Through this investment, SK chemicals has completed a recycled plastic value chain that extends to chemically recycled BHET, chemically recycled PET, and chemically recycled copolyester (CR-Copolyester), securing the sustainability of copolyester, which is its core business, and laying the groundwork for new growth.

According to Wood Mackenzie's report, the global recycled PET market in 2022 is approximately 9.7 million tons, with the majority of the market currently being mechanically recycled PET (MR-PET). The chemically recycled PET market, which is yet to be formed due to raw material shortages such as 'r-BHET,' is expected to rapidly grow by 2030 to form a 4.6 million-ton (about $7.6 billion) market due to various factors such as carbon emissions, regulations on plastic use and recycling, and changing consumer preferences for a circular economy. As such, SK chemicals is expected to grow with the aforementioned asset acquisition.

Along with the expansion of its copolyester business, SK chemicals plans to make the chemically recycled BHET and chemically recycled PET businesses with high growth potential as new development drivers and focus on them starting from the early stage of market formation.

SK chemicals' strategy is to supply chemically recycled PET to the domestic and foreign food and beverage bottle markets, as well as the food packaging market, highlighting its excellent properties such as transparency, appearance, and stability. In addition, the company plans to enter high-value-added markets, such as industrial specialty fibers, where the use of physically recycled PET is difficult, and take the lead in the global $7.6 billion market. The company also plans to sell the chemically recycled BHET as a standalone product to polyester manufacturers who want to produce recycled products.

By quickly validating its own technology through operations of the secured production and pilot facility, SK chemicals plans to accelerate domestic depolymerization plant investment and continuously discover business partners to build global production infrastructure in Europe, North America, and beyond.

In addition, SK chemicals plans to accelerate the development of depolymerization technology with 'r-TPA,' which can be a game-changer in the recycled plastic industry. 'r-TPA' is a chemically recycled raw material that allows easy removal of impurities from waste PET and production of high-quality recycled plastic without requiring additional production equipment.

Ahn Jae-hyun, the CEO of SK chemicals, said, "The early securing of chemically recycled BHET will accelerate the enhancement of our corporate value through the recycling business as a part of our financial story expansion," and added, "We will strive to become a leading company in the global recycled plastic market by pursuing global expansion and advanced recycling business models."

About SK Chemicals

SK Chemicals is one of the world's leading manufacturers of chemical and life science products. The South Korean company's Green Chemicals business focuses particularly on the development and production of biocopolyesters, copolyesters and polyethylene terephthalates (PET), as well as engineering plastics. The Life Science business unit focuses on the production and marketing of medicines. Through continuous innovations that meet the world's highest technological standards, SK Chemicals is known as a market-leading supplier of environmentally friendly materials and holistic medical products.

SOURCE SK Chemicals