Loop Industries, Inc. (NASDAQ:LOOP) rose Wednesday, on plans to form a strategic partnership with SK global chemical Co. Ltd to bring sustainable and circular plastics to the Asian market.
Wednesday’s news release reported Loop and SKGC intend to form a joint venture with exclusivity to build sustainable PET plastic and polyester fiber manufacturing facilities throughout Asia, which accounts for approximately 60 percent of the world’s population, making it a key market in terms of plastic manufacturing, consumption and waste.
Under the terms of the Memorandum of Understanding for the proposed joint venture, SK global chemical will own 51 percent of the joint venture and Loop will own 49 percent. Loop will also receive a recurring annual royalty fee as a percentage of revenue from each facility for the use of its technology.
SKGC has today issued a separate press release discussing Loop’s technology and SKGC’s objectives for the Joint Venture. As stated in SKCG’s press release, initial discussions between the partners contemplate beginning preparation on a first facility located in South Korea in the first half of 2022 and the construction of four facilities in Asia by 2030, with projected combined consumption of waste PET plastic and polyester fiber amounting to approximately 400,000 tons.
Once fully operational, these four facilities could claim an annual savings of 632,100 metric tons of CO2, which is the equivalent of more than 2.5 billion kilometers driven by an average passenger vehicle or ~270 million liters of gasoline consumed
LOOP leaped $2.40, or 18.2%, to $15.59.