Indorama Ventures reviews US PET facility after tariffs favor domestic production

Indorama Ventures, a Thailand-based petrochemical company, has announced plans to review the construction of a US$2.3 billion PET production facility in Texas, US. The move comes as new US trade policies promote domestic production of cosmetic and personal care packaging materials.

PET is commonly used plastic packaging due to its lightweight and recyclable properties.

Construction of the PET facility halted in 2023 after labor shortages and cost pressures, says Indorama Ventures. However, US President Donald Trump announced a 25% levy on aluminum in February, influencing beauty and personal care companies to move from metal packaging to PET-based alternatives. 

The facility is 80% complete and, when in operation, could produce 1.1 million metric tons of PET and 1.3 million metric tons of purified terephthalic acid annually. These materials are important for personal care packaging. 

PET independence 

Resuming US PET production could reduce reliance on overseas exports, especially from China, and strengthen US PET supply chains. 

China is a large exporter of PET, cosmetics products, and ingredients. In 2023, the country exported US$4.41 billion in beauty products, primarily to the US, reports the Observatory of Economic Complexity.

Personal care companies are deliberating how to address recent US tariffs and navigate an uncertain economic climate. Some are passing the extra costs to consumers, while others are turning their attention to different international markets and cutting operating expenses.