SK geo centric breaks ground on world’s first plastic recycling complex

[Courtesy of SK innovation]

SK geo centric Co. broke ground on a plastic recycling complex in Ulsan, a city on South Korea’s east coast. The plant is part of the company’s business restructuring to create new resources from abandoned plastics, in a move away from the traditional high dependence on oil in the petrochemical industry.

The company held a groundbreaking ceremony for the world’s first plastic recycling complex, Ulsan Advanced Recycling Cluster (ARC), on Wednesday. The recycling facilities will sit on a 215,000-square-meter site within SK innovation Co.’s Ulsan complex and will involve a total investment of 1.8 trillion won ($1.4 billion). Ulsan ARC is scheduled to be completed by the end of 2025, with commercial production scheduled to begin in 2026.

The complex aims to recycle 320,000 tons of waste plastic annually from 2026, processing approximately 9 percent of Korea’s yearly 3.5 million tons of incinerated or landfilled waste plastic.

Ulsan ARC is expected to incorporate three chemical recycling technologies: pyrolysis, high-purity polypropylene (PP) extraction, and depolymerization of polyethylene terephthalate (PET). To achieve this, the company has partnered with global recycling specialist companies, including Loop Industries Inc., Plastic Energy Ltd. (PE), and PureCycle Technologies Inc. (PCT). Pyrolysis is a technique that involves heating materials like vinyl to extract oil, also known as “urban mining.” PET depolymerization utilizes catalysts to break down PET polymers, reverting them to raw materials.

SK geo centric has opted for chemical recycling methods, enabling the conversion of almost all waste plastics into raw materials and facilitating repeated recycling.

According to McKinsey & Co. Inc., the shortage of chemically recycled plastic is expected to increase to 120 million metric tons in 2030 from 69 million metric tons in 2025. Samil PwC Business Research estimates that the waste plastic market will grow by over 40.5 percent to $63.8 billion from $45.4 billion in 2027.

SK geo centric has already secured pre-purchase agreements for 30 percent of the Ulsan ARC production volume. While the customers have not been disclosed, they are rumored to be global consumer goods companies. Its partners, Loop Industries, PCT, and PE, count global corporations such as Danone S.A.’s Des Eaux Minerales d’Evian SA, L’Oreal SA, Procter & Gamble Co., and L’Occitane Inc. as their customers.

Prime Minister Han Duck-soo attended the groundbreaking ceremony, where he referred to plastics as “at the core of transitioning to a circular economy” and expressed the government’s aim to build the foundation for a plastic-free society to reduce the social costs associated with increasing plastic waste as well as enhance industrial competitiveness. SK innovation Vice Chairman Kim Jun stated that waste plastics will be “reborn as resources,” while Ulsan will become the hub of the future plastic circular economy in Korea.

During a press conference the day before, SK geo centric Chief Executive Officer Na Kyung-soo highlighted the company’s commitment to begin a renaissance in the petrochemical industry starting with the Ulsan ARC. Stating that the nation’s chemical industry almost faced “sudden death,” Na said the company will “mark the beginning of a renaissance in the chemical industry by turning waste plastics into new resources.” He anticipated that the revenue would exceed 700 billion won and the operating profits would range between 250 billion and 300 billion won once the three factories are operative.