Indorama Ventures, Varun Beverages form joint venture for PET recycling units

IVL Dhunseri Petrochem Industries Limited, a subsidiary of Indorama Ventures Public Company Limited, and Dhunseri Ventures Limited have formed a joint venture with Varun Beverages Limited to establish greenfield polyethylene terephthalate (PET) recycling facilities in India and aims to reach 100,000 metric tons of combined annual capacity of recycled PET.

It plans to finish constructing two PET recycling facilities by the end of 2025, while having the potential for another facility, according to a joint statement.

The under-construction facilities include one in Kathua, situated in the Union territory of Jammu and Kashmir, and the other in Khurdha, in the eastern Indian state of Odisha.

"Anticipated to substantially diminish plastic waste, these new PET recycling facilities will convert post-consumer PET bottles into valuable resources," the executive president Petchem Special Projects and chair of the ESG Council of Indorama Ventures, Yash Lohia, said.

The demand for R-PET is projected to grow from around 400,000 metric tons in 2025-26 to over 1 million metric tons by 2031 in India, driven by regulatory mandate and an effort to achieve a circular economy for PET, the companies said.

The increase is demand is expected due to the Indian government's mandate of having 30% recycled plastic content in plastic packaging by 2025-26, escalating it to 60% by 2028-29.

At the same time, the move aimed to cater to the needs of India's beverage makers, many of whom have established sustainability goals in line with regulatory directions.

"As part of our long-term vision and in line with PepsiCo's global PEP+ objectives ... We are making investments that emphasize using green energy as well as reuse of PET which will be instrumental in mitigating environmental impact," said Varun Jaipuria, the executive vice-chairman of Varun Beverages. The collaboration represents a strategic foray for Varun Beverages into the recycling market, Jaipuria said.

Kolkata-headquartered Varun Beverages Limited is PepsiCo's second-largest bottling company globally outside the US, while Indorama Ventures is the world's largest producer of recycled PET resins that are widely used in food and beverage packaging.

Platts assessed premium R-PET clear flakes with PVC content of less than 30 ppm, unchanged from the last assessment at $945 per metric ton FOB India on Sept. 2. The R-PET food grade pellets with a minimum intrinsic viscosity of 0.8 was also assessed unchanged at $1,280/t FOB India, amid stable fundamentals.