"Recycling Today” recently spoke with SK Geo Centric’s CEO Na Kyung-Soo to discuss the company's “Waste & Carbon Zero” strategy, its related investments and the plastic industry.
SK Geo Centric, a subsidiary of SK Innovation, has been developing petrochemicals in South Korea for 60 years. The company says its goal is to transform into the world's leading plastic recycler by leveraging what it calls “vast opportunities” for the development of "urban oil fields.”
To achieve this, the company has launched its Waste & Carbon Zero strategy. Through 2021 and into 2022, SK Geo Centric has invested $260 million to further mechanical and advanced recycling of plastics and the necessary infrastructure. In the North American markets, SK Geo Centric has invested $56.5 million in Quebec-based Loop Industries, $55 million in PureCycle Technologies of Orlando, Florida, and $10 million with Closed Loop Partners, New York City, to advance circular business models, scalable recycling technologies and material recovery infrastructure in the U.S.
Recycling Today recently spoke with SK Geo Centric CEO Na Kyung-Soo to discuss the company's Waste & Carbon Zero strategy, its investments and the plastic industry. The following interview has been edited for clarity.
Recycling Today (RT): SK Geo Centric has launched its Waste & Carbon Zero strategy. Can you explain in detail what this strategy encompasses and what your specific goals around plastics are?
Na Kyung-Soo (NKS): The SK Geo Centric Plastic & Waste Zero strategy is to recycle 2.5 million tons of produced plastic, accounting for 100 percent of the [company’s] global production volume, and expand the proportion of eco-friendly products, such as ethylene and acrylic acid (EAA) copolymers, to 100 percent by 2027.
To meet this goal, we are running a 3R strategy to reduce plastic usage and replace it with eco-friendly or recyclable products. Ultimately, SK Geo Centric is committed to reducing its carbon emissions by half compared with 2019 levels and achieving a net zero target by 2050.
RT: What do you believe the biggest hurdles in plastics recycling are? How can they be overcome?
NKS: Recycling plastic is inherently difficult and faces numerous challenges. Firstly, we need to create a social atmosphere of recycling plastic and build a social system to encourage it. We should also drive the shifts in people’s perception of the reckless use of plastic.
Another challenge comes in the form of collecting plastics. The amount of plastic that is recyclable is quite limited based on the variation in the types of plastic. Each plastic has its own set of challenges when it comes to recyclability. Incorrectly discarded plastic mixing with recyclable plastic can disrupt the recycling process. In some cases, items discarded with plastic recyclables are not plastic. Once contaminated by outside elements, including food, plastic is much more difficult to recycle.
Korea is good at separating plastics from the waste stream, but the Asian region is still lagging. Investments in facilities to collect and sort plastics are needed. It is also essential that the government and citizens should be engaged in efforts to do that.
By adopting great technology, we should increase the rate at which discarded plastic is collected and sorted. Establishing a circular economy to efficiently collect and recycle plastic requires the construction of more recycling facilities.
Developing a plastic circular economy is not something SK Geo Centric can do alone. As a company, we have acquired a 10 percent equity stake in Loop Industries. Additionally, we recently joined as an equal partner [in] a joint venture with Loop Industries and Suez to build an “infinite loop” facility.
[The] SK Geo Centric Research and Development Center is also working to improve postprocessing pyrolysis technology to remove impurities like chlorine and sulfur.
RT: Many chemical companies that have embraced chemical recycling have been accused of greenwashing. How do you respond to those accusations?
NKS: SK Geo Centric’s commitment to developing a more sustainable business model speaks for itself. We are building the world's first large-scale plastics recycling cluster in Ulsan, South Korea. As a company, we are taking concrete steps to reduce carbon emissions. As part of this effort, SK Geo Centric’s pyrolysis oil carbon reduction process was certified by the country’s Ministry of Environment for its carbon reduction effect. When processing 1 ton of plastic, the technology could capture as much as 2.7 tons of carbon without incineration.
There is a perception that the chemical recycling process requires a lot of utility and energy, and residues from the process are not good for the environment. The process often refers to pyrolysis, which can be a competitive solution compared to landfilling. The latest research in pyrolysis includes technology that allows for minimizing the use of energy and recycling of residues.
RT: Recently, your company acquired three different methods of plastics recycling, pyrolysis, depolymerization and solvent extraction technology for polypropylene. How does SK Geo plan to use this technology to meet its recycling goals?
NKS: As well as our research scaling pyrolysis technology, we are also working with our partner Loop Industries to scale depolymerization, a process that breaks down large molecular blocks, such as polyethylene terephthalate (PET), into reusable basic materials. Additionally, SK Geo Centric and PureCycle announced the location of Asia’s first polypropylene (PP) recycling plant. We are also negotiating a joint venture agreement with PureCycle Technologies and [its] solvent extraction technology to recycle large amounts of PP.
RT: What role does mechanical recycling play in your strategy?
NKS: What matters is how smart we can be when it comes to the use of plastics. If we care about the environment, we need to reduce the use of single-use plastics and shift toward multiuse plastics. If that is not possible, the obvious alternative is recycling. It’s important to use plastics in the longest possible and smartest way. Among the recycling methods, mechanical recycling is the cheapest. However, mechanical recycling has limitations because materials can only be recycled a limited number of times until degradation happens, causing a reduction in quality.
As a method to remove the limitations, we are considering advanced recycling. SK Geo Centric believes that the advanced recycling process we are developing could help solve the plastic waste problem. As part of this global approach, we anticipate forging deeper collaborations with North American companies.
RT: How do the company’s North American partnerships with Loop Industries and PureCycle factor into its recycling goals?
NKS: With Loop Industries and PureCycle, we are building facilities and ramping up plastic reduction efforts across Asia and globally. We are also working to recycle the synthetic fibers from clothes containing large amounts of polyester. Boosting the technology’s applications will increase recycling rates and help achieve our stated goals.
With PureCycle’s technology, we anticipate producing 60,000 tons of recycled plastic annually from raw PP material as part of our urban oil field strategy. If successful, we could replicate the model driving the development of our Ulsan recycling cluster to other markets, including China.
SK Geo Centric is partnering with Loop and Suez to build an infinite loop manufacturing facility in Europe. The partnership will combine SK’s petrochemical manufacturing, Suez’s resource management expertise and Loop’s breakthrough proprietary technology.
RT: Your company is also expanding into Asia. Where will the facilities be located, what will they specialize in and when will they be operational?
NKS: By 2025, a large-scale recycle cluster will be built in Ulsan, near our existing refining and chemical plants. At full capacity, the Ulsan cluster could recycle about 200,000 tons of plastic, which will help capture 500,000 tons of carbon emissions annually.
The advantage of the Ulsan recycling cluster is the synergies it unlocks. For example, various byproducts extracted from the recycling process, including PP and PET, can be used as feedstock to support other recycling processes. Some of the waste can also be used to support pyrolysis. Even the final discharges captured by the recycling process can be utilized by the refinery located next to the cluster. Having a recycling cluster completed in Ulsan, we are also considering expanding it into China and Southeast Asia.
RT: Where will you source the material for these facilities? What types of materials will you be targeting?
NKS: We are working with several companies in South Korea and Asia to secure PP materials and PET, including hard-to-recycle colored PET bottles, as part of our ongoing effort to grow our recycling feedstock. Korea generates about 8 million tons of plastic waste annually. Despite that volume, there is still a shortage of recyclable-ready plastic waste. Only when we can secure a stable source of raw material will we be able to establish a profitable circular economy underpinned by advanced recycling operating at scale.
Our target feedstock is mostly from municipal recycling facilities. We are also considering using waste generated from industrial manufacturing processes as feedstock. [The] most commonly used plastics, PET and PP, will be our priority. Our priority is to recycle flexible films by pyrolysis. To that end, advanced recycling will be used to recycle colored PET bottles or polyester fiber that cannot be processed by mechanical recycling.
RT: Why is it important to invest in recycling plastic and the circular economy of plastics?
NKS: A plastic circular economy is fundamental to solving the plastic waste problem. It is difficult for us to create a plastic circulatory system alone. We found the Closed Loop Partners (CLP) Fund shares the same values with us. The CLP Fund, which brings together companies invested in eco-friendly businesses, has also accelerated the establishment of a circular economy.
Plastic recycling is in the early stage of rapid development. SK Geo Centric looks forward to developing new technologies and business opportunities that the CLP Fund could help foster. We look forward to cooperating with different stakeholders and expect to find opportunities for new technology.
Adel Omrani spent more than 20 years at General Electric Co., where he held numerous leadership and senior operational roles across the United States, the Middle East and Africa.
Covanta, a provider of sustainable materials management and environmental solutions based in Morristown, New Jersey, has appointed Adel Omrani as executive vice president of safety, operations and engineering. He will report directly to President and CEO Azeez Mohammed.
According to a news release from Covanta, Omrani will oversee waste-to-energy operations in North America. There he will work to optimize safety performance and invest in technologies that will enhance the company's infrastructure and ability to support the growth of its zero-waste-to-landfill services.
"With more than 25 years of deep operational experience in transformative markets around the globe, Adel is an exceptional addition to the Covanta team," Mohammed says. "His expertise in leading cross-functional teams, managing a high-performing workforce and delivering operational excellence is perfectly matched for our strategic efforts to grow and leverage Covanta's unique zero waste-to-landfill solutions."
Before joining Covanta, Omrani spent more than 20 years at General Electric Co. (GE), where he held various leadership and senior operational roles across the United States, the Middle East and Africa. Most recently, he served as regional president and CEO of GE Gas Power, where he oversaw all commercial and operational aspects of a 20-gigawatt installed base power generation equipment and services business. This included planning and executing more than 700 maintenance events per year across more than 20 countries.
Before this role, Omrani served as chief operating officer and chief commercial officer for various power generation and services business units within GE. He began his career as a design engineer with GE Aviation and later advanced to the role of general manager for contractual services in Africa for GE Power & Water.
"I couldn't be more excited to join Covanta at such a pivotal time in its history," Omrani says. "Covanta is an extraordinary company with an exceptional team and portfolio of services that is unmatched across the industry."
Omrani holds a Bachelor of Science and a Master of Science in mechanical engineering from the University of Tennessee, and a Ph.D. in mechanical engineering from the University of Tennessee Space Institute.
The company has revised its projected its annual revenue may be $215 million more than previously anticipated.
In light of a strong second quarter, Waste Connections,Woodbridge, Ontario, has raised its expectations for the remainder of 2022, according to its second-quarter financial report.
Net income for the second quarter was $257.1 million, an increase of nearly 22 percent over last year’s net income of $210.9 million for the same period.
“Solid waste pricing growth of 8.8 percent enabled us to overcome increased inflationary pressures during the period and deliver adjusted EBITDA margin in line with our outlook for quarter two and flat on a year-over-year basis, excluding the margin dilutive impact from acquisitions completed since the year-ago period," Waste Connections President and CEO Worthing F. Jackman says.
According to the company’s filing with the federal Securities and Exchange Commission, its net income was up about 26.5 percent during the second quarter of 2022 (about $224 million) compared with 2021 (about $177 million).
Revenue for the quarter was about $1.81 billion, up 18.4 percent from the $1.53 billion Waste Connections brought in during the second quarter of 2021.
For the second quarter of ’22, Waste Connections’ adjusted EBIDTA was about $566.8 million, compared with about $485 million for the second quarter of 2021, an increase of about 16.9 percent, according to the company’s SEC filing.
The updated outlook for the remainder of 2022 includes a revised annual revenue projection of $7.125 billion, up $215 million from an earlier estimate, Waste Connections Chief Finance Officer and Executive Vice President Mary Anne Whitney says.
“Adjusted EBITDA for the full year is now estimated at approximately $2.19 billion, or about 30.7 percent of revenue, down about 50 basis points from our initial outlook as follows: 40 basis points reflect the impact of incremental price increases to overcome higher inflationary pressures, including over 100 basis points from higher fuel and third-party logistics as compared to our original outlook, and 10 basis points is from the margin dilutive impact of acquisitions completed since February,” Whitney says.
Strong pricing coupled with fuel surcharges helped protect the company from inflationary pressures, Jackman says.
“We are extremely pleased with our performance in the first half of the year, led by strong execution and continued pricing implementations to address macro challenges,” Jackman says. “In the second quarter, as cost pressures persisted, we once again delivered pricing above our outlook, and we positioned ourselves for another sequential increase in quarter three to drive higher pricing the second half of the year.”
The first half of 2022 also was marked by heavy acquisition activity, which Jackman says should help increase revenue.
“We’ve already closed 12 acquisitions year-to-date with annualized revenue of approximately $245 million, about two times the level of what we would consider average for a full year,” he says. “These transactions are all in solid waste and include West Coast franchises, as well as new market entries and tuck-ins spread across competitive markets in the U.S. and Canada.”
According to the SEC filing, Waste Connections is carrying about $5.6 billion in long-term debt, issues in notes the come to maturity between 2028 and 2052. Interest rates on those notes range from 2.2 percent to 4.25 percent.
The company will build an advanced plastics recycling plant in China.
Honeywell, with headquarters in Charlotte, North Carolina, has announced that China Tianying Inc. (CNTY), an international environmental management company headquartered in Hai’an City in the Jiangsu province of China, will apply Honeywell’s UpCycle Process Technology in the plastics recycling facility it has planned for Jiangsu. The facility will use Honeywell’s UpCycle Process Technology to convert mixed plastics into recycled polymer feedstock (RPF). This will be the first commercial facility to use Honeywell’s UpCycle Process Technology in China.
Unlike Honeywell’s earlier announcements about the joint ventures it has formed with Avangard Innovative in the U.S. and Sacyr in Spain that will deploy UpCycle Process Technology, the company is not forming a joint venture with CNTY.
Kevin Quast, global business lead, Honeywell Plastic Circularity Business, tells Recycling Today, “Honeywell UOP’s strength is in licensing new technologies, not in the owning and operating of assets. The primary business model for Honeywell UOP is licensing, engineering and services rather than joint ventures. Given that the UpCycle Process Technology is a new technology that Honeywell UOP is commercializing, Honeywell UOP chose to explore joint venture opportunities with a couple of customers.”
Honeywell UOP will provide CNTY related engineering work and technical services for the project up to its startup and commissioning. The company also will provide technical support services for the plant's operation, optimization, monitoring and maintenance during its lifetime.
CNTY intends to apply Honeywell UpCycle Process Technology in building more waste plastics recycling plants in the future based on the success of this project, according to a news release issued by Honeywell. The two parties also explore potential collaboration in various fields, including end-of-life plastics pretreatment and pyrolysis equipment manufacturing.
“Honeywell’s UpCycle Process Technology not only expands the types of recyclable plastics that help close the loop within the plastics supply chain but also helps minimize consumption of fossil fuels over the course of virgin plastics production, reducing the carbon footprint,” says Vimal Kapur, the Houston-based president and CEO of Honeywell Performance Materials and Technologies. “We are glad to collaborate with CNTY on commercializing this innovative technology in China. Its application addresses challenges posed by waste plastics and promotes a circular economy in China and the world, enabling a more sustainable future of plastics industry.”
Honeywell’s UpCycle Process Technology uses molecular conversion, pyrolysis and contaminants management technology to convert end-of-life plastic back to Honeywell RPF, which is then used to create new plastics. The UpCycle Process Technology expands the types of plastics that can be recycled to include colored, flexible, multilayered packaging and polystyrene. When used in conjunction with other chemical and mechanical recycling processes, along with improvements to collection and sorting, Honeywell says its UpCycle Process Technology has the potential to increase the amount of global plastic waste that can be recycled to 90 percent.
Indiana-based metals recycler donates to Christian organization providing relief to war refugees from Ukraine.
Indianapolis-based Trinity Metals has announced making a $50,000 donation to Colorado-based Torchbearers International. The recycling company describes Torchbearers as a Christian ministry currently providing support for Ukrainian refugees who have fled their home country due to the Russian attacks.
“Any financial reserves we had available to us this spring were running short due to the pandemic,” says Peter Reid General Director of Torchbearers International. “It was [Trinity Metals’] gift that allowed us to reach out in ways which would not have been possible otherwise,” he adds.
Throughout the past few months, Torchbearers International has taken in a group of Ukrainian refugees at some of its European centers. When the Ukrainians arrived, they brought little with them, according to Trinity Metals.
“Many knew of no one in their new country, [and] those with health challenges such as diabetes were left without the means to receive the medication or treatment they needed,” says the company. Torchbearers has been seeking to help the refugees and provide for their medical needs, in part thanks to the contribution from Trinity Metals.
“We strive to run Trinity Metals and guide our personal lives to the best of our ability in accordance with Judeo-Christian principles,” says Wade Conner, CEO of Trinity Metals, who calls the donation “an easy decision.”
Continues Conner, “We want to live out those values through everything we do. We felt strongly that the crisis in Ukraine demanded a tangible and significant response from us—and we wanted to help in any way we could.”
Torchbearers International describes itself as having 25 centers in the Americas, Europe, Asia and the Pacific, designed in part to offer a variety of biblical courses, conferences and training for men and women.
Trinity Metals describes itself as a wholesaler and processor specializing in upgrading nonferrous scrap metals to their highest value using the best practices and technology available.