Indorama to increase PET recycling capacity to 750,000 tonnes/year by 2025

London (ICIS)–Indorama Ventures Public Company Ltd (IVL) has announced it will increase its recycled polyethylene terephthalate (R-PET) recycling capacity to reach 750,000 tonnes per year by 2025, the Thai-based company said in its recently released annual report.

Writing in the report introduction , Chief Executive Officer of Feedstock and PET Business Dilip Kumar Agarwal said: “We have committed to the Ellen MacArthur Foundation that we will increase our PET recycling capacity to 750,000 metric tons by 2025 while leading the development of the circular PET ecosystem.

“As a part of building a circular value chain for PET, we have taken the strategic step to invest in and create global recycling assets as a new vertical for growth as well as to support our brand owners to reach their PET recycled content goals.”

Alongside scaling up its PET recycling capacity, the company looks to have a return on capital employed (ROCE) of around 12-14% by 2025.

The company has already expanded its mechanical recycling capacities, which started with the acquisition of Wellman International in Europe in 2011,  with its flake processing facilities in Spijk, the Netherlands and Verdun, France, which produce flakes for conversion to food-grade and fibre-grade material in Ireland.

As well as recycled PET and fibre facilities in Thailand, the company has integrated three recycled PET sites in the US and Mexico, including Green Fibre International Inc with a R-PET flake capacity of 40,000 tonnes/year.

IVL further expanded its European operations in 2018 when it acquired 52,000 tonne/year plastic recycler Sorepla in France, which enhanced its recycling portfolio with food-grade R-PET.

Indorama has invested in advanced chemical recycling technology with its joint venture with Loop Industries in the US, and a partnership with Ioniqa in the Netherlands.

“Our investments in recycled assets not only show our sincere commitment towards sustainability, but also we believe they would be highly value accretive in the future,” Agarwal said.

In terms of addressing growing consumer concerns and backlash associated with plastic waste, IVL is investing $1.5bn to build a global recycling infrastructure, encouraging recycling of PET, and working to deliver a circular economy for beverage packaging. The company recognises failure to address anti-plastics campaigns may adversely impact the recycling industry’s growth potential.

As such, the company is working with the EU to reduce plastic waste as part of the Single-Use Plastic Directive, and has signed the Ellen MacArthur Foundation New Plastics Economy Global Commitment, one of only two virgin petrochemical producers to do so as of March 2019.

Companies such as Procter and Gamble have signed agreements with IVL for supply of R-PET, and P&G announced earlier this year that it will be the first company in Europe to produce product using Indorama’s Circular Plastics resin, obtained via chemical recycling.

ICIS INSIGHT
“As the largest global PET resin producer IVL is taking a leading position in addressing improved sustainability in the PET sector. The company has a clear vision to improve the supply of recycled feedstocks, exploring opportunities in both mechanical and chemical capabilities.  Acquisitions will be key to the expansion of R-PET supply and recent activities are evidence to that strategy,” said Helen McGeough, ICIS senior analyst, Plastic Recycling.

“This drive is critical, especially in a low crude oil environment with downward pressure on prices through the chain, that impact recycled plastic markets the harshest.  Distractions from sustainability agendas in such uncertain and challenging times is unsurprising.  However, long term commitments remain and so it is just a question of time as to how quickly the industry can get back on track with them” McGeough added.