SK Geo Centric Co., a subsidiary of South Korea’s SK Innovation Co., is reevaluating its investment strategy for the planned $1.3 billion waste plastic recycling complex in Ulsan, citing surging costs and an increasingly tough business environment. Originally announced last November, the project’s scope is likely to be more than halved.
The Ulsan Advanced Recycling Cluster (ARC), initially intended to house facilities for pyrolysis, high purity polypropylene (PP) extraction, and polyethylene terephthalate (PET) depolymerization, is undergoing a strategic reassessment. Currently, SK Geo Centric is considering only proceeding with the construction of the pyrolysis plant, which processes waste plastic into reusable forms. Decisions regarding the additional facilities will be based on the outcomes of forthcoming feasibility studies.
As of late April, SK Geo Centric executives have communicated to employees the necessity of a thorough review of the business plan due to the deteriorating external business conditions. The investment, initially projected at 1.8 trillion won ($1.3 billion), is expected to drop significantly if the company opts to construct solely the pyrolysis facility. This adjustment would also result in a substantial reduction in the planned recycling capacity of 320,000 tons of waste plastics annually.
Despite these cutbacks, the project’s potential has not been completely shelved. Industry insiders report that SK Geo Centric is still in discussions with potential partners, including Canada’s Loop Industries Inc., and remains committed to adapting its investment timeline to align with market conditions and the company’s financial health.
An SK Geo Centric official highlighted the long-term viability of the plastic recycling market, spurred by regulatory changes such as the European Union’s mandate for a minimum of 30% recycled materials in plastic products by 2030. Furthermore, the demand for recycled plastics remains strong, with several international beauty, food, and fashion brands reportedly committing to purchase a significant portion of the output from the Ulsan ARC. This ongoing interest underscores the strategic importance of adjusting project scales thoughtfully rather than discontinuing them entirely.
