#South Korea #Seoul #recycling #SK Chemicals #Kelinle

SK Chemicals’ Vertical Integration in Recycling

SK Chemicals, a leader in the plastics industry, has made significant strides in establishing the first vertical integration within the Korean recycling sector. This pioneering move is realized through their innovative strategy of securing in-house access to the raw materials essential for recycling. On December 10, 2025, SK Chemicals announced the formation of a joint venture with Kelinle, a well-respected Chinese company specializing in plastics recycling, located in Shaanxi Province, China. This partnership aims to construct the Feedstock Innovation Center (FIC), a facility designed specifically to process waste plastics into reusable raw materials.

Overview of the Feedstock Innovation Center (FIC)

The FIC is set to transform a massive 13,200 square meter site in Weinan into a state-of-the-art recycling facility. Unlike conventional mechanical recycling processes that predominantly utilize PET bottles, the FIC will focus on converting various discarded materials, particularly textiles, such as old blankets. This innovative approach is designed to utilize advanced technologies for depolymerization, an essential process that breaks down polymers at a molecular level, making it possible to recycle materials that are otherwise considered non-recyclable.

Initially, the FIC will possess a production capacity of approximately 16,000 tons of PET granules each year, with plans to eventually double that capacity. The majority of these granules will be supplied to SK Shantou, further solidifying their position in the competitive recycling market.

Benefits of In-House Sourcing

The establishment of this recycling facility is expected to be a major milestone for SK Chemicals, enhancing both their competitiveness and supply chain stability. Traditionally, plastic manufacturers have relied on external suppliers for their raw materials, exposing them to price fluctuations and supply instability. By introducing an internal procurement system for recycled plastics, SK Chemicals aims to mitigate supply uncertainties and enhance cost competitiveness. This internal sourcing will focus on materials that are generally burnt due to their difficult processing, offering a cost-advantage compared to clearer PET bottles, which are easier to recycle.

Industry Impact

The FIC's establishment is anticipated not only to supply reliable raw materials critical to ongoing plastic recycling operations but also to potentially decrease sourcing costs for waste plastics by about 20%. This advantage is particularly pertinent given the increasing global regulations mandating the use of recycled materials, which is likely to intensify the demand for recyclable plastics.

Moreover, addressing the global waste issue effectively, the new facility aims to recycle an estimated 4.6 million tons of beddings disposed of annually, which currently have a recycling rate of less than 1 percent. This repositioning of old blankets into resources demonstrates an innovative way to reduce waste significantly.

Future Prospects and Technologies

As the world’s first company to commercialize chemical recycling based on depolymerization, SK Chemicals is well-equipped to tackle the complexities of recycling challenging waste materials, including textiles and colored PET bottles. This advanced recycling method not only allows for repetition without compromising quality but also stands out for its hygienic advantages over mechanical recycling, setting SK Chemicals apart from competitors.

In conclusion, SK Chemicals, under the leadership of CEO Ahn Jae-hyun, has successfully laid out a comprehensive recycling value chain through the FIC. This venture not only emphasizes sustainable practices but is set to redefine standards in the industry by overcoming the cost barriers associated with recycled plastics compared to petrochemical-derived materials. With ongoing advancements, SK Chemicals aims to continue spearheading innovative solutions toward a more sustainable future.