Conflict Between Large and Small-Medium Enterprises in Plastic Waste Recycling, 'Will a Win-Win Agreement Be Reached?'

Dongbanwi, Plenary Session on 21st... Decision on Suitable Industry Designation
SMEs "Millions of Jobs Will Disappear" Concern
Possibility of Agreement and Win-Win Pact Between Large and Small-Medium Enterprises

Amid the prolonged COVID-19 pandemic leading to increased use of disposable products, plastic waste is piling up at the Suwon Resource Circulation Center in Yeongtong-gu, Suwon-si, Gyeonggi-do. [Image source=Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] The Win-Win Growth Committee is set to decide tomorrow (the 21st) whether to designate the waste plastic recycling industry as a sector suitable for small and medium-sized enterprises (SMEs), drawing keen attention from the industry.

Large corporations are entering this sector by acquiring small waste management companies, while the SME sector is opposing this, arguing that the household waste market?which accounts for about 12% of total waste plastic?should be protected from new entries or expansions by large corporations.

The Win-Win Growth Committee is reportedly making final mediation efforts to resolve the issue through win-win agreements between large and small-medium enterprises rather than through coercive measures.

According to the government and industry sources on the 20th, the Win-Win Growth Committee will hold its 72nd plenary session in Yeouido, Seoul, on the 21st to review and decide on whether the waste plastic recycling industry should be designated as an SME-suitable sector. Previously, in October last year, the Korea Resource Circulation Federation and others applied to the committee to designate the waste plastic recycling business as an SME-suitable sector.

The current point of contention is the collection and recycling of household waste plastic, which is separated and disposed of through recycling collection in apartments and residential areas. This accounts for 12% of total waste plastic. Recently, large corporations have been attempting to enter the market by acquiring or investing in related recycling companies. SK Eco Plant has acquired DY Polymer and DY Indus, which produce raw materials for waste plastic recycling.

Small recycling companies are demanding that large corporations stop encroaching on the 'material recycling market,' which consists of the cycle of collecting, sorting, crushing, and converting recycled materials into fuel, and instead focus on the 'chemical recycling market,' which requires capital and creates high added value.

[Image source=Yonhap News]

Shin Chang-eon, chairman of the Korea Resource Circulation Federation, said in a phone interview with Asia Economy on the 20th, "If large corporations enter the recycling industry, millions of jobs will disappear due to the introduction of automated facilities," and emphasized, "There needs to be a division of roles with large corporations."

The recycling industry has relatively low entry barriers, resulting in many small-scale businesses, and the collection and sorting of recyclables have played a role in job creation. Chairman Shin expressed concern that the entry of large corporations into the recycling industry could lead to the closure of small businesses and a reduction in jobs for vulnerable groups.

He stated, "The recycling technology developed by SMEs in Korea is among the best in the world," and criticized, "Large corporations suddenly want to enter the recycling market now that they have to consider ESG management and carbon emission rights."

The federation representing SMEs is not opposed to win-win agreements. Chairman Shin said, "If both sides make concessions and find a consensus, we are considering a method of signing a win-win agreement with large corporations through the Win-Win Growth Committee without designating the sector as SME-suitable." However, he drew a clear line by adding, "The scope of business entry by large corporations must be clearly defined for a win-win agreement to be possible."

Another representative of a small waste management company said, "Large corporations say they will only enter the chemical recycling market, but in reality, they are trying to collect waste plastic from households for physical recycling, so reaching an agreement is not easy."

This content was produced with the assistance of AI translation services.