SKC Collaborates with Chandra Asri to Grow the Biodegradable Industry

Indonesia: SKC, the chemical division of SK Group, has partnered with Chandra Asri, the largest petrochemical manufacturer in Indonesia, to grow its booming eco-friendly materials business in Southeast Asia.

According to the source SKC subsidiary Ecovance and the Indonesian company signed a memorandum of understanding about their business partnership last month. According to the agreement, the two businesses will work together to obtain new clients, create products using Ecovance's biodegradable plastic materials, and examine future investments to address the issue of plastic waste in Southeast Asia, especially Indonesia.

As a joint venture with local partners, such as food producer Daesang and trading firm LX International, SKC launched Ecovance in 2021 to commercialise its eco-friendly materials business, one of the three pillars of its future development drivers along with battery and chip materials. SKC committed 104 billion won ($80 million) to acquire a 57.8% stake at the time, while Daesang and LX International promised 40 and 36 billion won for a 22.2 and 20 percent part, respectively.

Due to its non-toxic makeup and firmness resembling petroleum plastic manufactured by employing nanocellulose taken from wood, high-strength Polybutylene Adipate Terephthalate, or PBAT, is viewed as an alternative biodegradable plastic and has been the subject of research and development by Ecovance.

According to SKC, Ecovance intends to construct in Korea the second largest PBAT manufacturing facility in the world, with an annual production capacity of 70,000 metric tonnes.

The new relationship was also verified by an SKC representative, who stated, we expect to contribute to setting up an industrial ecosystem for eco-friendly materials in Indonesia and Southeast Asia overall.

With a compound annual growth rate of 13.1%, the worldwide PBAT market is expected to rise from $1.5 billion last year to $2.8 billion in 2027 because of rising demand from developing nations that require more consumer goods and packaging.

Chandra Asri, which has its corporate office in Jakarta, had $2.4 billion in revenue in 2017. The newest relationship with SKC comes as it works to expand its eco-friendly materials industry and diversify its line of business.

SKC, established in 1976, has consistently broken records in Korea and around the world via innovation and challenge. In 1977, SKC developed PET (polyester) film for the first time in Korea, and in 2008, it was the first company to commercialise biodegradable film worldwide. SKC was the first company to successfully commercialise an eco-friendly HPPO technology globally in 2008 and the first company to commercialise PO (Propylene Oxide) in Korea in 1991. After developing the CMP (Chemical Mechanical Polishing) Pad, SKC, a pioneer in the localization of semiconductor materials, is now a pioneer in the localization of high-end Blank Mask.