Indorama Ventures plans to make significant investments in its recycled PET production capabilities. | Kwangmoozaa/Shutterstock

Citing the need to meet rising demand in the near future, plastics producer Indorama is investing $1 billion in its recycling operation.

In a recent quarterly earnings call, company leaders discussed the firm’s recycling plans for the future.

“All of our customers are in touch with us and demanding that we improve and increase the recycling content in our PET,” said Aloke Lohia, vice chairman and group CEO of Indorama Ventures.

Indorama Ventures (IVL) is making the major investment so that, “by 2025, when the brand owners want 25% (recycled) content in the packaging, IVL would be able to deliver them,” Lohia said. He added that “all the brand owners are talking to us on whether we understand the importance.”

Indorama’s recent comments on recycling investments were first reported by Reuters.

Brand owners want to keep PET as their main packaging choice, Lohia noted, but they also want to increase the portion of their feedstock that comes from recycled material.

“That is good news for us,” Lohia told investors. “We just have to ensure that we can deliver 25% recycling content.”

He said the company will produce recycled plastic through both chemical and mechanical recycling processes. Traditionally mechanical recycling involves steps such as grinding, washing and melting plastics. Chemical recycling is a blanket term for a number of recycling technologies, including those that break down the plastic into its chemical building blocks, which can then be processed into new plastics.

Through mechanical recycling, Indorama plans to offer a 25% and a 100% recycled plastic pellet.

“The challenge in recycling in the circular economy is going to be the collection of the waste,” Lohia said. He noted that deposit systems, and particularly their greater adoption around the world, will be a key driver of increased PET collection.

Indorama has pushed further into the recycling sector in recent years. This year, the company purchased Athens, Ala. reclaimer Custom Polymers PET for about $30 million. Indorama also expanded its PET recycling operation in Mexico. Last year, Indorama acquired a French PET and HDPE reclaimer.

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