SK Chemicals Pioneers Korea's First Vertical Integration in Recycling with In-House Feedstock

SK Chemicals Breaks Ground in Recycling Innovation

SK Chemicals is taking a significant step forward in the recycling industry by establishing Korea's first vertical integration in recycling. This move is exemplified by its recent announcement to create a joint venture with Kelinle, a specialist in plastic recycling based in Shaanxi Province, China. This partnership aims to develop a Feedstock Innovation Center (FIC) dedicated to processing waste plastics, slated to begin operations in the second half of 2026.

The FIC aims to transform how waste plastics are sourced and processed into reusable materials. By building this facility, SK Chemicals is set to not only enhance the production of chemically recycled materials but to also streamline the sourcing of waste plastics. This positions SK Chemicals at the forefront of circular recycling, making it the first domestic chemical firm to establish a comprehensive corporate structure focused on waste plastic sourcing.

The partnership will utilize an idle site of approximately 13,200 m² owned by Kelinle in Weinan, Shaanxi Province. The innovative facility will be designed to handle a variety of inputs, specifically focusing on discarded textiles and materials often overlooked in conventional recycling processes. Unlike mechanical recycling, which typically relies on sorted PET bottle inputs, the FIC will give new life to end-of-life textiles such as old blankets and scraps from shredding PET bottles, converting them into high-quality feedstock for chemical recycling.

Initially, the FIC is expected to produce around 16,000 tons of PET pellets annually, with plans to increase this capacity to approximately 32,000 tons. This supply will predominantly meet the feedstock requirements for SK Shantou, marking a significant milestone in ensuring a stable and cost-effective feedstock supply for SK Chemicals’ circular recycling business.

Enhancing Competitiveness and Sustainability

The establishment of the Feedstock Innovation Center is anticipated to provide SK Chemicals with a competitive edge by reducing dependence on external suppliers. Traditionally, recycled plastic producers acquire waste material from various suppliers, exposing them to price fluctuations and supply shortages dictated by market conditions. Given the rising global demand for recycled materials due to stringent regulatory pressures, securing a stable and secure feedstock supply is essential.

By developing an in-house sourcing mechanism for waste plastics, SK Chemicals aims to mitigate the uncertainties that come with fluctuating external supplies. The FIC will target materials that are usually incinerated or deemed unsuitable for recycling, thereby allowing the company to procure valuable feedstock at lower costs than conventional clear PET bottles. Ultimately, it is projected that once the FIC achieves full operational status, it could stabilize feedstock procurement costs, potentially reducing expenses by up to 20%.

Another advantageous outcome of this initiative is the significant reduction of waste; globally, around 4.6 million tons of bedding are disposed of each year, with recycling rates falling below 1%. By converting these traditionally wasted resources into feedstock, SK Chemicals not only supports its circular economy goals but also plays a vital role in reducing landfill use.

Advanced Recycling Technology

Though materials like discarded blankets present favorable procurement costs, transforming them into reusable feedstock necessitates advanced technological capabilities. SK Chemicals stands out as the first company in the world to successfully commercialize the depolymerization process that can convert textile waste and colored PET materials into valuable raw materials for recycling. This innovative recycling process allows for the restoration of plastics back to their molecular state, enabling repeated recycling cycles without compromising material quality.

Ahn Jae-hyun, CEO of SK Chemicals, highlighted, "With the establishment of the Feedstock Innovation Center, we are enriching our comprehensive recycling value chain, spanning from depolymerization and material production to efficient feedstock sourcing. The cost benefits derived from repurposing challenging waste materials like discarded textiles will aid in breaking down the cost barriers of recycled plastics, which have historically been more expensive than petroleum-derived counterparts."

In alignment with these developments, SK Chemicals has also created a subsidiary in Shantou for chemical recycling, promoting a global hub for circular recycling with the production of r-BHET and CR-PET. Furthermore, domestically in Korea, the company established the Recycle Innovation Center at its Ulsan plant to integrate depolymerization pilot projects with copolyester production, effectively bridging research and production.

About Kelinle

Kelinle is a leading player in the plastic recycling industry based in Shaanxi, China, with a decade of experience in waste plastics processing. The company specializes in PET flake production and possesses a dedicated research and development team focused on recycling innovations, including multiple patents related to recycling technology through collaboration with Xi'an University of Technology. This joint venture exemplifies the merging of expertise and innovation in the pursuit of improved recycling processes and sustainability in the industry.

In conclusion, the creation of the Feedstock Innovation Center marks a pivotal moment in Korea’s recycling landscape, establishing a robust foundation for the future development of a sustainable circular economy in the plastics sector.