In its “2019 Annual Report,” Aloke Lohia, the group CEO of Indorama Ventures Public Co. Ltd. (IVL), Thailand, says the social and political pressure on single-use plastics “creates a tremendous opportunity for IVL to enlarge our recycling investments and create a positive impact on global circular economy initiatives.” He goes on to say that he has pledged to the Ellen MacArthur Foundation that the company will use 750,000 metric tons of recycled polyethylene terephthalate (rPET) content by 2025.
“It is important for our stakeholders to understand that this will not negatively affect our existing PET resin business,” which he says has grown by 1 million metric tons per year “and will continue growing together with the recycled material.”
Dilip Kumar Agarwal, the CEO of the company’s feedstock and PET business, says, “As a part of building a circular value chain for PET, we have taken the strategic step to invest in and create global recycling assets as a new vertical for growth as well as to support our brand owners to reach their PET recycled content goals. Recent acquisitions like Sorepla in France, Customer Polymer and Green Fiber in the USA show our commitment to adding recycling assets to the portfolio. We have also invested in chemical recycling through a joint venture with Loop Industries in the U.S. and a partnership with Ioniqa in the Netherlands.”
He adds that IVL’s investments in recycled assets show the company’s commitment to sustainability in addition to being highly accretive in the future, noting that IVL has a target of 15 percent return on capital employed for its recycling assets.
Sanjay Ahuja, IVL chief financial officer, says recycling will be “the major beneficiary of capital in 2020,” noting that the company expects to spend $30 million to $40 million on each acquisition or capex in this segment.
The company’s Chief Strategy Officer Deepak Parikh adds that IVL will invest $1 billion over the next four years in recycling.
“As the largest global PET resin producer, IVL is taking a leading position in addressing improved sustainability in the PET sector,” says Helen McGeough, senior analyst, Plastic Recycling, for London-based ICIS. “The company has a clear vision to improve the supply of recycled feedstocks, exploring opportunities in both mechanical and chemical capabilities. Acquisitions will be key to the expansion of rPET supply and recent activities are evidence to that strategy.
“This drive is critical, especially in a low crude oil environment with downward pressure on prices through the chain, that impact recycled plastic markets the harshest. Distractions from sustainability agendas in such uncertain and challenging times is unsurprising. However, long-term commitments remain, and so it is just a question of time as to how quickly the industry can get back on track with them” McGeough adds.