VIETNAM – SKC, the chemical division of South Korean conglomerate SK Group, has commenced construction of a biodegradable material production facility in Hai Phong City, Vietnam, which is set to become the world’s largest polybutylene adipate terephthalate (PBAT) production factory.

Situated in the Dinh Vu Industrial Park, the biodegradable material production project is expected to involve an investment exceeding VND11.8 trillion (US$90.3 million) by 2030.

SKC has set ambitious timelines, aiming for construction completion by June 2025 and operational commencement in September 2025 following a trial run in July of the same year, as reported by The Star.

The construction kick-off comes after SKC obtained an investor registration certificate (IRC) from Hai Phong City in September last year.

Spanning 22,389 square meters, the plant will have an annual production capacity of 70,000 tonnes of PBAT biodegradable plastic products, 59,500 tonnes of polybutylene succinate (PBS) biodegradable plastic products, and 6,300 tonnes of tetrahydrofuran (THF) solvent byproducts.

In preparation for future growth, SKC has secured an additional site nearby to serve as a launchpad for global expansion.

SKC views biodegradable materials, often referred to as ‘perishable plastic,’ as a sustainable alternative to traditional plastics, particularly amidst increasing public awareness and regulatory measures to reduce disposable goods.

The company anticipates strong market growth. Industry experts forecast that the global biodegradable materials market will expand at an annual rate exceeding 20%.

Highlighting the project’s significance, Haiphong People’s Committee Deputy Chairman Le Anh Quan emphasized its role in combating global plastic waste pollution and advancing the plastics industry towards a sustainable, green, and circular economy.

Aligned with Vietnam’s RE 100 clean energy initiative, renewable energy sources will power the biodegradable material facility entirely.

SKC plans to develop high-strength PBAT using nanocellulose to broaden its application in textiles and nonwovens, extending beyond its traditional use in food packaging films and shopping bags.

Last year, the company announced plans to divest its polyurethane raw material business to accelerate its focus on its businesses in secondary batteries, semiconductors, and eco-friendly materials.

 In a statement following a board meeting on October 12, SKC’s executives decided to sell a 100 percent stake in SK pucore, the company’s polymer material-making wing, to Glenwood Private Equity for 410.3 billion won (US$303.9 million).

SK pucore serves as a key manufacturing base for polyol, the primary raw material for polyurethane (PU) products. Notably, SK pucore developed “Re-Polyol,” an eco-friendly polyol made from recycled materials—a first for a South Korean company.

The company has also significantly expanded its overseas production bases in countries such as the United States, China, Poland, and Mexico.

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