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SK to invest in Canadian Loop Industries

June 24/2021

MOSCOW (MRC) -- South Korea’s SK Global Chemical (SKGC) plans to take a 10% stake, for about Canadian dollar (CD) 56m (USD45m), in Canada’s Loop Industries, and the companies plan to form a joint venture, Loop said. 

South Korea’s SK Global Chemical is buying a 10-per-cent stake in Quebec-based Loop Industries Inc. for USD56.5-million, and the two plan to form a joint venture to deploy Loop’s proprietary plastic recycling technology in Asia.

Under the deal, SKGC will buy 4.7 million Loop shares for USD12 each. SKGC is also being granted options to boost its stake over the next three years, contingent on the progress of construction of a first Asian manufacturing plant.

The two are announcing the deal eight months after Loop’s shares tumbled following a negative report by prominent U.S. short-seller Hindenburg Research. Hindenburg said in mid-October it had interviewed former employees, competitors, corporate partners and chemists, and concluded that “Loop is smoke and mirrors with no viable technology."

Loop responded by saying the report was “either unfounded, incorrect or based on the first iteration” of its technology, which is a chemical process, rather than a mechanical one, for recycling plastic into what the company says is high-quality usable material.

Loop’s shares on the Nasdaq lost half their value in the 17 days after the release of Hindenburg’s report, falling as low as USD5.85. They have since recovered, closing on Tuesday at USD13.12.

The deal with SKGC, part of one of South Korea’s largest conglomerates, shows the promise of the technology, said Loop founder and chief executive officer Daniel Solomita.

Under a memorandum of understanding, the companies intend to form a joint venture to build sustainable polyethylene terephthalate (PET) and polyester fibre manufacturing facilities throughout Asia. SKGC would own 51 per cent of the venture and Loop the remainder. Loop would also receive an annual royalty based on a percentage of revenue.

PET, used in things such as drink bottles, is a major source of pollution, and Loop says its process recycles it into virgin-quality plastic. “Our technology is really at the forefront of what the circular economy is,” Mr. Solomita said. “You take a finished product and break it down into what it used to be, and build it back up again into a finished product or something of a higher quality."

As per MRC, Clariant, a specialty chemicals major, is selling its pigments business to a consortium consisting of pigment maker Heubach Group (Langelsheim, Germany) and private investment firm SK Capital (South Korea). The combined business will operate under the Heubach name and create a leading global pigments business with annual sales of more than EUR 900 million (USD1.09 billion).

According to MRC's ScanPlast, the total estimated PET consumption in Russia increased in January-April 2021 by 13% compared to the same period a year earlier and amounted to 263,660 tonnes. 78.3% of the increase in consumption falls on the share of bottled PET granulate due to the virtual absence of exports and an increase in the volume of imports. In April, the total estimated consumption amounted to 80,150 tonnes, which is 34% more than in the same month last year.


mrcplast.com
Author:Anna Larionova
Tags:APET-granulate, PET-granulate, PET bottles, PET films, PET preforms, SK Corporation, Canada, Russia, South Korea.
Category:General News
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