PET updates: Lotte Chemical halts recycling plant in South Korea; Toray to sell stake in Indonesian PET maker

South Korean chemical firm Lotte Chemical says it has officially scrapped its ambitious project to build a chemical recycling facility for waste polyethylene terephthalate (PET). The company’s decision comes as the five-year initiative originally announced in 2021 is faced with prolonged market depression, shrinking margins, and aggressive price competition from overseas.

The cancelled venture at Lotte’s No. 2 Ulsan plant was designed as a pioneer project for South Korea. It centred on constructing a depolymerisation facility capable of breaking down 45,000 tonnes/year of waste PET into its base monomer, bis(2-hydroxyethyl) terephthalate (BHET). That raw material was then intended to feed a nearby 110,000-tonne C-rPET (chemically recycled PET) production unit.

Although Lotte Chemical completed construction on the C-rPET unit in 2022 and finalised the engineering design for the BHET facility, real capital deployment stalled. Out of an estimated total budget of around US$55 million), only US$12 million was actually spent. The existing C-rPET production assets will remain idle rather than being dismantled, preserving the possibility of a future restart should circular economy market conditions dramatically improve, it says.

A massive surge in cheap basic feedstocks and synthetic materials flooding out of China has created a global supply glut, driving down prices and severely damaging Korean profit margins. In parallel, consumer and industrial adoption of chemically recycled plastics has progressed far slower than anticipated. Advanced chemical recycling involves high capital intensity and expensive purification processes, making rPET significantly more costly to produce than virgin plastics, a price premium buyers are increasingly unwilling to pay during a broader economic slowdown, says a news report.

In other news, Japan’s Toray Industries announced recently that it will sell its shares in its Indonesian PET bottle resin manufacturing joint venture, PT Petnesia Resindo (PNR), to PT. Pioneer Polyindo Complex of Indonesia.

It has entered into a share transfer agreement with Pioneer. Toray holds a 47.1% stake in PNR and the sale is scheduled to be completed in December 2026.

The company adds it has positioned enhancing capital efficiency and sustainable value creation through portfolio optimisation as key management priorities. The transaction is part of Toray’s efforts to enhance capital efficiency and corporate value by optimally allocating management resources from a best-owner perspective. Toray further adds it will continue to steadily optimise its management resources to deepen growth and create value.

Other details of the sale deal were not disclosed.

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