"Midnight Meeting Leads to Dramatic Agreement" Domestic 2 Trillion Won Waste Plastic Market, Role Sharing Between Large and Medium Enterprises

Dongbanwi Holds Plenary Session and Decides on 'Win-Win Agreement'
SMEs to Handle Household Waste Plastic Market
Role Sharing with Large Corporations... Mutual Cooperation Promised

At a recycling sorting center in Busan, the classification of recyclable waste such as plastics discharged from each household is underway. [Image source=Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] The conflict between large and small-to-medium enterprises (SMEs) over the waste plastic recycling industry has been resolved through mediation by the Win-Win Growth Committee.

On the morning of the 21st, the Win-Win Growth Committee held its 72nd plenary session at the 63 Convention Center in Yeouido, Seoul, and decided to sign a win-win cooperation agreement between large and small-to-medium enterprises regarding plastic sorting and plastic raw material recycling industries.

This comes one year after SMEs, including the Korea Resource Circulation Federation, applied to the Win-Win Growth Committee last October to designate the waste plastic recycling business as a sector suitable for SMEs.

The Win-Win Growth Committee reportedly played the role of mediator during the meeting between large and small-to-medium enterprises until around 11 p.m. on the 20th, leading to the win-win agreement. A committee official stated, "Although the agreement nearly fell through due to the sharp differences in opinions between both sides, a dramatic agreement was reached late at night."

As a result, the waste plastic recycling market will have divided roles between large and small-to-medium enterprises. The material recycling market, which utilizes household waste plastics, will be handled by SMEs. This method involves recycling waste plastics by converting them into uniformly sized small granules. Household waste plastics account for about 10% of the total waste plastic market.

On the 21st, Oh Young-kyo, Chairman of the Shared Growth Committee (center), attended the 72nd Plenary Session of the Shared Growth Committee.

In the 'chemical recycling market,' which chemically decomposes industrial plastic waste, large enterprises will be allowed to operate businesses. It was considered appropriate for large companies to enter the chemical recycling market due to the high level of technology and capital required.

On the other hand, the market for collecting and sorting waste plastics from apartments and residential areas has been operated by SMEs for about 40 years. If large companies enter this sector, it is expected that small businesses will suffer due to the introduction of automated systems, and jobs for vulnerable groups will decrease.

Recently, with the analysis that the waste plastic recycling industry is a profitable market and ESG (Environmental, Social, and Governance) management emerging as a key issue in the industry, large companies, especially in the petrochemical sector, have been entering the market one after another. Although conflicts arose as some large companies acquired small recycling-related firms and entered this market, the issue was resolved by agreeing to sign a win-win cooperation agreement.

The win-win cooperation agreement is scheduled to be signed by SME organizations and 19 large companies at the end of this month. In addition to the six large companies such as Lotte Chemical, SK Geocentric, and LG Chem, which had been in discussions with the Win-Win Growth Committee, 13 petrochemical large companies voluntarily joined. The agreement implementation period is three years.

Based on the win-win cooperation agreement, large companies will operate win-win cooperation programs aimed at strengthening technology and quality competitiveness for SMEs. SMEs plan to practice win-win cooperation by jointly working to secure carbon emission rights for their large enterprise partners.

According to an IBK Investment & Securities report released in November last year, the global waste recycling service market size is approximately 69.5 trillion KRW, with the plastic recycling market accounting for 6.6% of that, or 4.6 trillion KRW.

The total sales of domestic waste plastic recycling-related companies reached about 1.56 trillion KRW as of 2019. It is estimated that the waste plastic market has grown to over 2 trillion KRW due to the surge in single-use product usage amid the COVID-19 pandemic.

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