Avatar Hainan Yisheng Receives FDA Opinion Letter on rPET for Food Contact

Recently, Hainan Yisheng Petrochemical Co., Ltd., a subsidiary of Hengyi Petrochemical (stock code: 000703.SZ), received an opinion letter from the U.S. Food and Drug Administration (FDA) regarding its application file - PNC002807. The letter confirms that the post-consumer rPET produced by Hainan Yisheng's physical recycling process can be used to manufacture PET containers for contact with all types of food, with up to 100% recycled content, under usage conditions A-H and J.

The raw materials used in Hainan Yisheng's production process are sourced from post-consumer PET beverage and food bottles in the domestic market. The process is licensed from Erema, which has already received a non-objection letter from the FDA. Since purchasing the Erema process, Yisheng has made no modifications. According to the FDA, Yisheng's process is consistent with the process description in Erema's non-objection letter No. 140, leading to this conclusion. Additionally, Hainan Yisheng has installed Solid State Polymerization (SSP) after the Erema process to further enhance purification and impurity removal capabilities.

Hainan Yisheng launched a 50,000-ton-per-year rPET physical recycling production capacity in 2021 and is currently building an additional 90,000-ton-per-year capacity. The company has become one of the largest domestic producers of food-grade rPET, leveraging its largest domestic virgin bottle-grade PET business and research and development in semi-chemical methods. Yisheng's product line is now the most extensive in the industry, positioning it as a potential leader in the future integration of PET packaging business in China.

Against the backdrop of product upgrades, the demand for polyester bottle chips is continuously increasing. In 2021, the global apparent consumption of bottle-grade PET was estimated at around 32.08 million tons, with a year-on-year growth rate exceeding 12%. Domestically, the demand for bottle-grade PET has been growing rapidly, with an annual apparent consumption of 7.05 million tons, a year-on-year increase of about 24%. On the downstream demand side, the traditional soft drink market has performed well. Meanwhile, the pandemic has also driven the rapid development of bottle chips in new application areas such as fresh e-commerce, household disinfection and cleaning products, and new materials like eco-friendly flooring and optical films. The demand for bottle chips continues to rise. As an industry leader, the company's capacity for polyester bottle chips (including recycled bottle chips rPET) is 2.7 million tons.

Looking ahead, the company will seize the opportunity of the robust market demand for bottle chips and further expand its market share to maximize profits.