Canada's Loop Industries Inc. and South Korea's SK Global Chemical Co. Ltd. have entered a strategic partnership agreement to accelerate the commercialization of Loop's sustainable PET plastic and polyester fiber manufacturing technology.
As part of the agreement, SK Global Chemical will make a $56.5 million strategic equity investment in Loop Industries, purchasing 4.71 million shares of common stock of Loop Industries, amounting to a 10 percent stake in the company.
The investment will be used by Montreal-based Loop to fund its planned Infinite Loop manufacturing facility in Bécancour, Quebec.
Loop's patented technology allows for waste PET plastic and polyester fiber to be upcycled into virgin-quality PET using low heat and no added pressure. The low-energy process allows Loop to eliminate contaminants such as dyes, additives and other impurities. Compared with traditional mechanical recycling that can cause degradation in PET quality, the technology causes no degradation in quality or strength, and can be repeated "infinitely," the company says. This means the waste PET and polyester fibers can be restored to original raw material state and recycled 100 percent with the same quality as new products.
SK Global Chemical and Loop Industries plan to form a joint venture with exclusivity to commercialize Loop Industries' technology for manufacturing sustainable PET in Asia.
Construction of a first facility in South Korea with a capacity to process 84,000 tons of waste PET per year is expected to begin in 2023. In total, four facilities are planned in Asia with a combined consumption of waste PET plastic and polyester fiber amounting to approximately 400,000 tons.
"We are excited to collaborate with SKGC to commercialize our technology and play a meaningful role together to mitigate the environmental impact of global plastic waste and help consumer brands meet their stated goals for achieving high rates of recycled content in their products," said Loop CEO and founder Daniel Solomita.
Once fully operational, the four facilities could claim an annual savings of 632,100 metric tons of CO2, the equivalent of more than 2.5 billion kilometers driven by an average passenger vehicle or about 270 million liters of gasoline consumed.
"This investment decision not only secured the depolymerization technology, which is a differentiated plastic recycling technology, to SK Global Chemical, but also laid a foundation to build an eco-friendly plastic cycle in Asia," SK Global Chemical CEO Kyung Soo Na said.
"We look forward to collaborating closely with the acclaimed company, Loop, which has great technology competencies in correlation to the plastics recycling category. Furthermore, it is our sincere intention to further expand and add value in the APAC region together with Loop backed by its chemical recycling technology that will work towards realizing a plastic circular economy."