SK Chemical and Kelinle Collaborate on Chemical Recycling of Waste PET

Seoul, December 10, 2025 /PRNewswire/ — SK Chemical announced today that it has achieved vertical integration in the recycling business for the first time in Korea by securing its own feedstock through a partnership with a Chinese plastic recycling company.

1. Establishment of a Joint Venture and Construction of a Feedstock Innovation Center
SK Chemical (CEO Ahn Jae-hyun) announced on December 10 that it has signed an agreement with Kelinle, a plastic recycling specialist based in Shaanxi Province, China, to establish a joint venture for the construction of a "Feedstock Innovation Center" (FIC) for processing waste plastics. The center will enable SK Chemical to build a complete value chain encompassing waste plastic procurement, preprocessing, and production of chemically recycled materials. This makes SK Chemical the first chemical company in Korea to operate a chemical recycling business while possessing its own waste plastic procurement and preprocessing facilities.

2. Processing Hard-to-Recycle Waste to Produce PET Pellets
The two parties plan to construct the FIC on approximately 13,200 square meters of idle land owned by Kelinle in Weinan City, Shaanxi Province, China. The facility will process waste plastics into PET pellets.

• Feedstock Source: Unlike mechanical recycling, which primarily uses PET bottles, the center will focus on processing traditionally hard-to-recycle materials, such as discarded bedding and fine particles (micro-powders) generated during PET bottle crushing.

• Technical Collaboration: Kelinle will leverage its decade-long experience and local resources in plastic recycling to handle feedstock procurement, while SK Chemical will provide technical support for preprocessing.

• Production Scale: The initial annual production capacity is planned to be approximately 16,000 tons of PET, with gradual expansion to 32,000 tons per year. The output aims to supply most of the feedstock required by SK Chemical’s Shantou plant.

3.  Ensuring Stable Supply and Enhancing Cost Competitiveness
SK Chemical positions its circular recycling plastic business as a future growth driver. The establishment of its own feedstock supply system is expected to significantly enhance the business’s competitiveness and stability.

1. Securing Stable Supply: SK Chemical’s chemical recycling (depolymerization) process breaks down waste plastics into molecular-level raw materials, which are then synthesized into plastics. Waste plastics serve as the foundational feedstock. By sourcing feedstock directly through the joint venture, the company can mitigate risks related to price fluctuations and supply instability associated with external procurement.

2. Strengthening Cost Advantages: The center will process materials such as discarded bedding, which have lower acquisition costs compared to easily recyclable transparent PET bottles. The company estimates that once the center is operational, it could reduce feedstock costs by approximately 20%, thereby breaking down the price barrier between recycled plastics and petroleum-based materials.