Indorama Ventures reconsiders Texas PET plant as US tariffs shift packaging landscape

USA – Indorama Ventures, a global leader in petrochemicals based in Thailand, is reassessing the completion of its US$2.3 billion polyethylene terephthalate (PET) production facility in Texas.

This review comes amid favorable changes in U.S. trade policies that are encouraging domestic production of cosmetic and personal care packaging materials.

Construction of the facility was halted in 2023 due to rising labor costs and material shortages. However, recent shifts in U.S. trade policy—particularly the imposition of new tariffs on aluminum—are reshaping the competitive landscape for packaging materials.

In February, President Donald Trump announced a 25% levy on aluminum imports, a move that has prompted many beauty and personal care brands to reconsider their reliance on metal packaging in favor of more cost-effective and recyclable PET alternatives.

The Texas facility is currently 80% complete and, once operational, is expected to produce 1.1 million metric tons of PET and 1.3 million metric tons of purified terephthalic acid (PTA) annually.

Both materials are essential components in the manufacture of rigid and flexible packaging, particularly for cosmetics, lotions, and personal hygiene products.

Resuming production at the Texas site could significantly enhance U.S. PET independence by reducing reliance on imports, especially from China.

China remains a dominant exporter of PET and beauty-related products. According to the Observatory of Economic Complexity, China exported US$4.41 billion worth of beauty products in 2023, much of it destined for the U.S. market.

The potential restart aligns with broader industry trends as companies navigate rising material costs and supply chain uncertainties.

Many personal care brands are responding to tariffs by adjusting pricing, exploring new sourcing strategies, or shifting their focus to alternative international markets.

Others are streamlining operations to remain competitive amid an unpredictable economic climate.

Indorama Ventures sees the evolving tariff environment as a potential catalyst to solidify its position in the U.S. market.

Completing the Texas plant would not only bolster the domestic supply of PET and PTA but also provide local manufacturers with more stable access to essential packaging inputs.

The company is currently evaluating market conditions and policy developments to determine the viability of resuming construction.

A final decision is expected later this year, pending further clarity on trade dynamics and domestic demand for sustainable packaging solutions.

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