rPVB for leather: Carter Industrial's Analysis

Is there any estimate on the size of the global (and Chinese if industry data is available) PVB market - conventional fossil fuel-based PVB, and recycled PVB?

The global leather market, including synthetic leather, is a large and growing market that was valued at around USD 33bn in 2022, with a CAGR of 7.2% during 2022-2032, and is expected to reach USD 65bn by 2031. The PU, PVC, and bio-based leather market shares in 2022 are 50%, 35% and 15%, respectively.

In the automotive and architectural industries, the total worldwide amount of produced PVB sheets is estimated to be around 120 million kg per year. As demand for sustainable materials continues to grow, we anticipate a shift towards increased use of recycled PVB leather in across industries, which we are well-positioned to provide through our innovative manufacturing processes and commitment to sustainability.

What is the rPVB industry's growth like? What are the biggest drivers for demand growth? What are the big consumer brands doing to increase rPVB sourcing?

We expect rapid growth in the rPVB industry due to increasing demand for sustainable and eco-friendly products. We project a significant increase in demand for rPVB over the next few years, driven by the EU carbon border tax and other regulations that encourage the use of sustainable materials. Consumer brands are increasingly looking for sustainable sourcing options to meet the demands of environmentally conscious consumers.

How did and when did Carter Industrial get into the rPVB business? Did it start off making conventional PVB or other things?

Carter Industrial began providing rPVB in 2014, as part of our vision to revolutionize the synthetic leather industry through sustainable materials and innovative manufacturing practices that connect the entire supply chain.

Our aim is to become a global leader in this space, generating profits for our partners while reducing carbon emissions and driving positive change for the environment and society. Prior to our focus on rPVB, we traded in plastic secondary processing products such as PVC, PU, TPU synthetic leather, and sheet/film.

We also established manufacturing facilities for environmentally friendly PU leather, waterproof cloth, and other products that align with our vision for sustainability. Our commitment to sustainability is reflected in every aspect of our business, from the materials we use to our manufacturing processes and supply chain management.

What is its annual production volume (all of its production facilities - Guangdong, Jiangxi - together)? Will it expand production capacity to meet demand growth?

Our annual production volume is over 300,000 yards in 2022, and we are expecting significant growth in demand due to increasing regulations for sustainable materials. We plan to expand our production capacity to meet the expected demand growth.

Does Carter sell directly to factories that use rPVB? If so, what are the biggest and fastest-growing market segments? (e.g., bags, shoes, furniture, garments, sports equipment)

Yes, we sell directly to factories that use rPVB, and the biggest and fastest-growing market segments are bags and sports equipment. We are not allowed to name any brands using our rPVB due to confidentiality agreements, though some of the clients are definitely some of the most renowned brands internationally.

Where does Carter source waste glass for the PVB? What is the supply chain's development like? Is the volume sufficient to meet its needs?

At Carter Industrial, we are committed to sustainability and reducing waste in all aspects of our business. One area where we have made significant strides is in our ability to recycle safety glasses, including laminated glasses from automobile windscreens and building windows. These types of safety glasses are not recyclable in most regions, including Hong Kong, where there are currently over 900,000 cars on the road. As these safety glasses approach the end of their life, they can pose significant pressure on our landfill systems.

To address this issue, we have developed innovative technology that can recycle safety glasses, including laminated glasses from automobile windscreens and building windows, and repurpose them for use in our rPVB production processes. This technology involves a four-step process that includes separation, purification, re-formulation, and resin production. Currently, we source waste glass from foreign countries such as Japan, EU, and the US, and perform these steps in Taiwan.

While the volume of waste glass we currently source is sufficient to meet our needs, we understand the growing demand for sustainable materials and are planning to set up recycling operations in Mainland China. Our commitment to sustainability extends beyond our production processes and supply chain management to include innovative solutions for reducing waste and repurposing materials that would otherwise end up in landfills.

Why does the company locate its research facility in Taiwan? Is there an advantage to doing so?

We have chosen to locate our research facility in Taiwan for several reasons. First and foremost, Taiwan is known for its strong support of recycling policies and commitment to sustainability. This aligns well with our own values and mission to revolutionize the synthetic leather industry through sustainable materials and innovative manufacturing practices.

Additionally, Taiwan is a hub for the latest branding R&D trends, providing us with access to cutting-edge research and development resources and opportunities. By having a lab in Taiwan, we are able to perform R&D for branding at the earliest possible stage, enabling us to stay ahead of the curve and continue to innovate and improve our products.

What is the process of obtaining Global Recycled Standards certification? Is it stringent?

The Global Recycled Standards (GRS) certification is a rigorous process that applies to every single unit in the supplier chain, from the top of waste glass obtaining to synthetic leather making. Every single company in the chain is required to obtain GRS certification, which involves going through an audit process by an auditor company such as Control Union or ITS.

The GRS certification ensures that the materials used in production are sourced and processed in a sustainable and ethical manner, and that they meet strict environmental and social criteria. It also verifies that a certain percentage of the final product is made from recycled materials, which is important for brands looking to demonstrate their commitment to sustainability and reduce their environmental impact.

All transactions must have a transaction certificate (TC) to prove the safe transaction of materials throughout the supply chain. The GRS certification is a vital tool for brands looking to ensure that their products are sustainable and socially responsible, and it is an important part of Carter Industrial's commitment to sustainability and innovation.

You wrote "The rPVB developed by Carter does not contain toxic chemicals such as DMF and DMFu" - is this certified by the GRS or another third party?

Yes, Carter Industrial is committed to using sustainable materials and avoiding the use of toxic chemicals in our production processes. We are proud to say that our rPVB products do not contain restricted heavy metals, DMF, DMFu, or other restricted toxic elements. We also comply with a range of international standards, including REACH, RoHS, ASTM, and EN71-3, to ensure the safety and quality of our products.

To ensure compliance with these international standards, we work with third-party laboratories to test our products and verify that they meet the required standards. This ensures that our products are safe for human health and the environment, while also meeting the needs of our customers for sustainable and high-quality materials. We are committed to continuous improvement and innovation in our products and processes, and will continue to strive to meet and exceed industry standards for sustainability and safety.

You wrote "For every tonne of rPVB we produce, we save up to 17 tonnes of CO2, and 53 tonnes of water consumption." - is this substantiated by a third-party? How is this calculated?

We calculate these savings in our laboratory, benchmarking with the conventional synthetic leather-making process. We have a detailed breakdown of emission in both CO2 and water savings.

References

The global synthetic leather market size is expected to be worth around USD 64.6 billion by 2032 from USD 32.8 billion in 2022, growing at a CAGR of 7.2% during the forecast period from 2023 to 2032. This market growth is expected to be driven by the global rise in synthetic leather demand from the footwear sector. Natural leather replacements are also in demand due to the high price of natural leather. (June 2023, Market.Us https://market.us/report/synthetic-leather-market/)

The total worldwide amount of produced PVB sheets for the automotive and architectural industry is estimated at around 120 million kg per year. (Mater. Recycl – Trends Perspect (2012), PVB sheet recycling and degradation)