Daily Management Review

Plastic Manufacturer Indorama Invests ‘$1 billion’ For Plastic Recycling


Indorama looks to increase its “green credentials” amid stronger regulations and customer demands on recycling.

Indorama Ventures is a chemicals company from Thailand which has made a commitment of investing “$1.5 billion” for recycling at a time when more and more consumers are becoming aware of the environmental damage caused by “single-use plastic” while the push towards recycling from the regulators get stronger.
Indorama mainly produces “PET resin” and fibers, the former is a polymer that goes into the manufacturing of “plastic bottles while the latter is used to make “seat belts and tyres”. Within a year’s time the company has manufactured almost “5,000 kilotons of PET” and its C.E.O Aloke Lohia said:
“We are investing $1 billion in recycling over the next five years.”
Moreover, Lohia also informed that the above mentioned investment will also cover “greenfield and brownfield mergers and acquisitions” by keeping the focus on “bottle-to-bottle recycling”. Indorama has eleven recycling facilities spread across the globe, such as in “Thailand, Mexico and France”.
The company wants to further its “green credentials” as new regulation begins to come from the governments fuelled by customers’ expectations. In the month of March, in an announcement, the European Commission said that it has set forth a target of incorporating twenty five percent of “recycled plastic in PET bottles by 2025, with a targeted 90% collection rate”.
As per Indorama’s plans, post 2023, the company would like to make an additional invest of “$500 million by 2025” in order to support its customer base in achieving the “25% target”. In Lohia’s words:
“There is infrastructure in the world to recycle PET. The problem lies in the collection”.
According to the estimation of “Consultancy Wood Mackenzie Chemicals”, in 2017 the PET beverage bottles’ collection rate across the EU was around 58%. North America accounts for 40% of Indorama’s revenue while Europe adds another 30%. Indorama’s customers include Nestle, Coca-Cola and PepsiCo.
Furthermore, Indorama informed that it is collaborating with “brand owners and governments” to effectuate “more bottle-to-bottle recycling”. As per Lohia:
“The acquisitive company still has $2.5 billion of uncommitted capital for new projects in its other businesses, including olefin, fibers and feedstocks”.