Loop and SK Geo Centric decide to terminate joint venture agreement

Clean technology company Loop Industries and SK Geo Centric (SKGC) have decided to terminate their joint venture agreement to construct and operate an Infinite Loop manufacturing facility in South Korea. This move is part of Loop’s strategy to focus on investing in regions with lower operating costs and providing licensing and engineering services in markets with higher expenses. The decision to dissolve the JV is also influenced by strategic changes within SK Group, Loop mentioned in a filing with the SEC.

Despite the end of the JV, SKGC remains financially committed to Loop and retains the right to appoint a director to Loop’s board. However, Vice President Jonghyuk Lee from SK geo centric’s Green Business Division recently stepped down from his board position due to a new role within SKGC’s restructured organization.

The joint venture between Loop and SKGC was established on April 27, 2023, with the goal of setting up and operating an Infinite Loop production site in Ulsan, South Korea. SKGC held a majority stake of 51% in the venture and had exclusive rights to utilize Loop’s technology across Asia for a specific period.

This decision reflects Loop’s focus on strategic ventures in more cost-effective regions, while SK Group’s evolving strategies play a part in the termination of the JV agreement. Despite ending the joint venture, SKGC maintains its financial support for Loop and can still nominate a director to Loop’s board. Vice President Jonghyuk Lee, who represented SKGC on Loop’s board, has stepped down from his position following a reshuffle within SKGC’s organization.

The objective of the joint venture, which was formed less than two years ago, was to establish an Infinite Loop manufacturing facility in Ulsan, South Korea. SKGC held a controlling interest of 51% in the venture, and the partnership was granted exclusive rights to use Loop’s technology in Asia for a specific period.

This recent development is in line with Loop’s strategy to concentrate on investment opportunities in areas with lower operational costs and to offer licensing and engineering services in markets where expenses are higher. The decision to dissolve the joint venture is also influenced by ongoing strategic changes within SK Group. Although the partnership has come to an end, SKGC remains financially committed to Loop and retains the option to name a director to Loop’s board. Vice President Jonghyuk Lee of SKGC’s Green Business Division recently resigned from his board position to take on a new role as part of SKGC’s restructured organization.