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Indorama reports growth in recycling business in 2020

The company saw 22 percent year-over-year growth in this segment compared with 7 percent growth in virgin PET.

March 4, 2021

Indorama Ventures Public Co. Ltf. (IVL), headquartered in Thailand, reported fourth-quarter and year-end financial results for 2020 in late February. The global chemical producer saw its full-year sales volumes grow 18 percent to 14.08 million metric tons, while its full-year core earnings before interest, taxes, depreciation and amortization (EBITDA) declined 3 percent to $1.11 billion. The company’s operating cash flows grew 6 percent to $1.39 billion.

In comments the company submitted to the Stock Exchange of Thailand along with its audited year-end financials, IVL points to “robust” polyethylene terephthalate (PET) demand in 2020, which resulted in 7 percent year-over-year growth in its PET sales volume. The company attributed the growth to increased demand from producers of thermoformed packaging for food and large format bottles.

“Additionally, despite a low virgin PET environment, our recycled PET (rPET) business grew, reflecting strong commitments from customers towards circularity,” IVL says, reporting 22 percent year-over-year sales volume growth in that segment. Despite that growth, recycling had an EBITDA of $28 million in 2020 compared with $480 million for IVL’s PET business.

The company says it is prioritizing improving its cost competitiveness and advocacy on PET sustainability and growing its recycling, packaging and specialty chemicals businesses.

IVL also says its expansion plans for rPET (bottle flakes) and downstream rPET are well on track to meet its commitment to the Ellen MacArthur Foundation to reach 750,000 metric tons by 2025.

The document notes that the company's recycling growth plan includes adding 600,000 metric tons of capacity from 2021 through 2023 at a cost of approximately $400 million. IVL says it expects the return on capital employed for these projects to be in the 13 to 15 percent range.

The company has made a number of acquisitions in the recycling sector recently, including Green Fiber International Inc. in Fontana, California; Sorepla Industrie S.A. in France; and a Poland-based PET recycling company.

In addition to these mechanical recycling operations, the company says it is investing in chemical recycling to depolymerize postconsumer PET and polyester fibers into monomers that can be used to make very pure rPET.