SK chemicals and Shuye sign US$100M deal for “world’s first” recycled raw materials production system

16 Mar 2023 --- Korea-based SK chemicals has made a US$100 million asset purchase agreement with Shuye, a Chinese company specializing in green materials to secure the “world’s first” mass production system for recycled raw materials and PET.

Shuye’s supply of recycled plastic raw materials enables SK chemicals to have price competitiveness and facilitates the development of disruptive recycling technologies. 

The system targets the market for high-value-added special materials such as industrial fibers to meet various customer demands such as climate neutrality and price. 

SK chemicals is now accelerating its entry into the global market and business expansion with a chemically recycled hydroxyethyl terephthalate (r-BHET) of 70,000 metric tons and chemically recycled PET (CR-PET) of 50,000 metric tons production systems. 

Ahn Jae-hyun, the CEO of SK chemicals, says, “the early securing of r-BHET will accelerate the enhancement of our corporate value through the recycling business as a part of our financial story expansion.” 

Chemically recycled BHET
The assets acquired by SK chemicals include a depolymerization plant that chemically decomposes waste plastics to produce r-BHET and a CR-PET production facility that uses r-BHET produced to reproduce PET, which can then be sold separately. 

By producing recycled plastic raw materials, SK chemicals expects to gain a high level of price competitiveness. By acquiring Shuye’s assets, SK chemicals has obtained a commercial production system for chemically recycled BHET and products that utilize depolymerization technology about one-two years ahead of other domestic companies. 

By producing recycled plastic raw materials such as waste PET in China, where the company says there is abundant supply, it is expected to gain a high level of price competitiveness. 

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

The CR-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 metric tons and US$7.6 billion worth market due to various factors such as carbon emissions, regulations on plastic use and recycling and changing consumer preferences for a circular economy. 

Expanding tech
Along with expanding its copolyester business, SK chemicals plans to make the r-BHET and CR-PET businesses with high growth potential as new development drivers and focus on them starting from the early stage of market formation.

The company says it plans to supply CR-PET to the domestic and foreign F&B bottle markets and the food packaging market, highlighting the material’s properties such as transparency, appearance and stability. 

In addition, it plans to enter high-value-added markets, such as industrial specialty fibers, where physically rPET is difficult and take the lead in the global US$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 validating its technology through secured production and pilot facility operations, SK chemicals aims to accelerate domestic depolymerization plant investment and continuously discover business partners to build global production infrastructure in Europe and North America.

Furthermore, SK chemicals plans to accelerate the development of depolymerization technology with recycled thermoplastic polyamide (r-TPA), which can “be a game-changer” in the recycled plastic industry. rTPA 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. 

Edited by Natalie Schwertheim