Interview: SABIC sees COVID-19 change plastic usage, need to maintain sustainability efforts

Singapore — Major petrochemicals producer, SABIC, expects the lifestyle changes brought about by the COVID-19 pandemic to shape the different usage of plastics going forward, according to the company's vice president and regional head for South Asia and ANZ, Janardhanan Ramanujalu.

"We have seen a rise in demand for new and enhanced applications to help safeguard against COVID-19 on the frontlines," Ramanujalu said in an email interview with S&P Global Platts. This included "production of ventilators and respiratory masks; polypropylene (PP) products used in making medical disposable gowns, masks, shields and coveralls to safeguard community health as well as other intensive care equipment, such as infusion pumps, monitors and diagnostic devices."

In the early stages of the pandemic, PP prices were supported by the sharp spike in demand for masks, S&P Global Platts data showed. Demand for plexi-glass, a derivative of methyl methacrylate, or MMA, also witnessed a steep climb given its usage in protective gears.

It is not impossible for these lifestyle changes to become the new normal.

"Aside from medical supplies, the demand for packaging materials used for food and other essential goods has certainly grown, driven by retailers' need to meet rising consumer demand and [to] restock shelves quickly," Ramanujalu said.

The increase in demand for plastics used in packaging was driven mainly by the shift in consumer's preference for retail e-commerce during the pandemic.

Supply, logistical challenges during COVID-19

A key challenge during the COVID-19 pandemic is to ensure the stability of the supply chain amid logistics and manpower issues as countries went under lockdown.

With several planned petrochemical expansions delayed due to the pandemic, SABIC, according to Ramanujalu, did not experience any major disruption to its production or expansion plans.

"As the majority of SABIC products are considered essential during this crisis, we could continue to supply material and support customers without disruption, amid unprecedented prolonged challenges."

SABIC prioritized requests from the healthcare industry for the production of, among others, ventilators to aid the fight against COVID-19, by leveraging on its extensive worldwide distribution network and regional business response teams.

"With the chemical industry playing a crucial role in the fight against the pandemic, many of our manufacturing sites were permitted to operate in full compliance with local regulatory as well as health and safety guidelines aligned with the local authorities and the World Health Organization guidelines", he added.

Need to maintain sustainability efforts during pandemic

Global recycled plastic demand is expected to grow in the next few years given the increased focus and capital investments into the recycled plastic space, according to S&P Global Platts Analytics. Some of the new projects include investments from Coca-Cola, Indorama, PTT and Suez.

"It is even more critical during this time, that manufacturers commit their operations to supporting sustainable solutions and commit to designing products for recyclability. Change needs to happen throughout the value chain, and this starts from manufacturers and suppliers, down to the end-user," Ramanujalu said.

"To this end, we have made several landmark decisions and invested its scientific and technological expertise over the past year to advance the circular economy and help close the loop on waste for the good of our business and planet," he added.

As for SABIC's forecast and outlook on the growth of recycled plastics and the trend of sustainability, Ramanujalu said: "Today, more than ever, industry needs to respond to the world's environmental and societal challenges by embedding sustainability and recycling into its very DNA. We understand the global market for recycled plastics is expected to grow by $14.74 billion over the next few years."

The growth in the use of plastics has put recycling in the spotlight and there is increasing pressure on the industry to utilize resources more efficiently, develop innovative ways to recycle plastics and avoiding waste by keeping valuable plastics in the value chain.

"Supporting the growth and development of a circular economy, one in which products and raw materials are not wasted, but rather used to create new, valuable and durable products, has been a key goal of SABIC's sustainability platform. The circular economy is a concept embedded in our product innovation and development processes," Ramanujalu said

Chemical Recycling

SABIC, headquartered in Saudi Arabia, is the first petrochemical company in the world to scale-up high-quality processes for the chemical recycling of used mixed plastic back to the original polymer for commercial application. SABIC is also a founding member of the Alliance to End Plastics Waste, or AEPW.

"In a circular economy, chemical recycling can play a crucial role in converting hard or difficult to recycle plastic wastes such as used mixed plastic waste, thereby preserving material resources, increasing overall recycling rates and enabling its further conversion back to the same or similar polymers," Ramanujalu said

Not only does chemical recycling enable the possibility of closed loop recycling of plastics, it boasts of a carbon footprint advantage over incineration, offers greater flexibility and broader coverage of waste types, leading to higher potential for waste management.

"Chemical recycling also produces virgin-like quality as compared to mechanical recycling, and hence, can be used in applications with more stringent requirements (such as those found in the food packaging industries) where conventional mechanical recycling is not possible," Ramanujalu said.