[Asia Economy Reporter Hyungsoo Park] Hanchang is showing strong performance. It appears that the news of the government increasing the proportion of pyrolysis treatment for waste plastics is influencing the stock price.
As of 12:23 PM on the 29th, Hanchang is trading at 1,060 KRW, up 14.59% from the previous day.
The Ministry of Environment recently announced in the presidential work report that it will expand the recognition of recycling types to allow pyrolysis oil made from waste vinyl and other materials to be used as alternative petroleum raw materials. The plan is to increase the pyrolysis proportion from 0.9% in 2020 to 10% by 2026. Pyrolysis oil technology is a method that converts waste plastics such as polyethylene, polypropylene, polystyrene, and waste vinyl into recycled oil.
The government, aiming to improve regulations, has identified 50 tasks that can be improved in the near future. With the relaxation and abolition of these 50 corporate-related regulations, large companies such as Hyundai Heavy Industries and LG Chem can immediately proceed with private investments worth approximately 1.6 trillion KRW.
Additionally, the government decided to immediately lift regulations on three on-site projects that have faced difficulties in investment execution due to regulatory uncertainties. As a result, improvements were made to safety regulations for cooperative robots in shipyards, permission was granted for waste plastic pyrolysis hazardous facilities to enter industrial complexes, and a foundation for the use of biodegradable plastics was established. Furthermore, the government completed 140 regulatory improvement measures across all ministries.
Hanchang introduced its main business, the pyrolysis oil business, as manufacturing, installing, and operating plants that pyrolyze polymer waste such as waste plastics, waste synthetic resins, and marine waste into liquid fuel oil. The waste treatment industry is difficult for competitors to enter and has an oligopolistic nature, making it hard for new companies to enter. While traditional waste treatment methods such as incineration or landfill focus on disposal, pyrolysis treatment, a chemical treatment method, can convert waste into high value-added oil or chemical raw materials, making it an eco-friendly and economical method.
The annual generation of waste plastics, the main raw material for the pyrolysis oil business, is estimated at 360 million tons. Due to COVID-19, online shopping, food packaging, and delivery increased by 15.4% compared to before the pandemic. Only about 13% of waste plastics are recycled, while the rest are simply incinerated (27%) or landfilled (40%). From a circular economy perspective, Hanchang emphasized that the pyrolysis oil industry, a chemical recycling technology, is essential.
In June, Hanchang opened a specialized factory for manufacturing pyrolysis plants in Gunsan. It is expected to supply large-scale equipment orders without disruption. The Jindo plant for marine waste chemical recycling is also scheduled for a completion ceremony next month. It is anticipated that the production of high-quality refined oil will demonstrate Hanchang’s technological capabilities.
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