Bring Hannah back up here to introduce our next company.
Thanks, Tony. Next up, we'll have Loop Industries. Loop is a technology company whose mission is to accelerate the world's shift towards sustainable PET plastic and polyester fiber, and away from its dependence on fossil fuels. Loop owns patented and proprietary low-energy technology that depolymerizes no and low-value waste PET plastic and polyester fiber into its base building blocks, which are then filtered, purified, and polymerized to create virgin-quality Loop-branded PET resin and polyester fiber suitable for use in food-grade packaging, enabling its customers to meet their sustainability objectives. I'm happy to introduce Loop's Founder and CEO, Daniel. I believe he's joining us virtually. The VP of Investor Relations, Kevin O'Dowd, is here with us in person. They will begin with a presentation on the company before we move into Q&A at the end of the session.
Hi, thank you very much. Let me just set up the screen. Loop's technology, basically what it is, is it's tackling the global plastic waste problem. Today, there's still billions and billions of tons of plastic being produced, and most of that plastic today cannot be recycled. That's a big challenge that we're facing. Basically, one of the main reasons why plastics cannot be recycled and why recycling rates are so low is because there's so many different types of materials and construction to go into the different pieces of either textile waste or packaging waste. All those different materials and construction create a huge problem for traditional recycling technologies.
Loop's technology is really here to be able to bring a real solution and a proven solution to the PET plastic, which is the number one used plastic for packaging, water bottles and soda bottles, and polyester fiber for the textile industry. What we do is we sell PET plastic and polyester fiber to all of the large CPG companies around the world, either companies that are using PET plastic, like I said, for water bottles, soda bottles, shampoo, any type of packaging, or from the polyester fiber industry, from carpets, textiles, clothing, all of those different industries. A water bottle and a pair of polyester shorts are made with the exact same base chemicals.
If you think about that water bottle or a pair of shorts, they're both, if you break it down to its really its chemical base, it's one DMT molecule and one MEG molecule, and another DMT and another MEG. Those molecules are attached together to make a polyester chain. DMT starts off today. Traditionally, DMT is made from crude oil, and monoethylene glycol starts off as natural gas. Either that water bottle or that pair of shorts, Loop can break that down into those base chemicals. We purify those base chemicals back to their purest form, and then we rebuild them up into a brand new piece of plastic, again, going back either into the packaging industry or into the textiles. We can go textile to textile. We can go textile to packaging, water bottles, soda bottles, whatever it is.
At the end of the day, we come back to any type of purity that we need for our customers. As far as the technology, we've built the technology over the past nine years. We have a facility that we run here in Montreal, Canada, just outside of Montreal, Quebec, Canada, where we produce about 2.5 million pounds of material for different customers, such as On Running shoes, Evian, L'Oréal . Anything to do with the polyester world, everything we produce is virgin quality polyester or PET made from 100% recycled content. The key to the technology is very low heat and no added pressure for the depolymerization, which is what allows us to use materials that are more difficult to recycle because of those different materials of construction. Also, we tremendously reduce the greenhouse gases and emissions up to 81% versus the petroleum industry.
Low conversion costs and high production yields compared to other recycling technologies. We can upcycle low-value polyester waste that's currently destined to landfill or incineration, such as, like I said, carpets and clothing, as well as other types of packaging. Enables textile to textile recycling, which right now is probably the hottest segment in recycling, is textile to textile, being able to supply textile fashion brands with virgin quality material coming from textile waste, which cannot be done through traditional recycling means. That's really a really important market segment that we're capturing at our joint venture project in India, close to the textile supply chain. That's going to be the largest textile to textile recycling facility in the world. Food safe. On the packaging side, everything we produce is 100% recycled content of the highest quality, exactly the same quality as the petroleum industry.
We are certified with the FDA in the United States, Health Canada, and REACH certification for Europe. On the textile side, we have GRS certification for the textile recycling. It is a globally patented technology. We have patents in over 200 countries globally. A little bit on how the technology works. Like I said, either taking a water bottle or a textile, at the end of the day, you can just break it down to a molecular chain of one DMT molecule attached to one MEG molecule, another DMT, another MEG. That is what gives plastic its strength. We take the finished product, we break it down into those two base chemicals. We purify them back. We remove all the coloring, all the additives, all of the dyes.
We bring it back to its purest form, and then we can rebuild it up into any type of finished product. At the end of the day, we are reinventing how you make those two chemicals, the DMT and the MEG. We're eliminating the need for fossil fuels. The way to produce it back into the PET resin, we use traditional technology that is used around the world today. It is really bringing those base components, the DMT and the MEG, producing those from waste rather than the petroleum industry. Here are some of the type of feedstocks that we use for our process. PET fines is from the mechanical recycling industry, colored flakes, again, type of packaging. PET trays, if you ever buy some food that you want to put into the microwave to heat up or to cook, those black trays that come under that.
Polyester fiber, so again, all from the textile industry. All of these feedstocks today that you see on the screen are unable to be recycled today because of the fact that there's a lot of different materials of construction. Probably the easiest way for me to explain that would be if you take any type of textile, you'll usually have polyester, which we will recycle. But you have polyester mixed with nylon, polyester mixed with cotton. You'll have spandex, buttons, and zippers. All of those materials have different starting components. That's why recycling is very challenging, because traditional recycling, you're using high heat and pressure to be able to either melt the product down into a new form or to try to break it apart.
The problem is once you use high heat and high pressure, you'll be breaking apart all of those other components as well, the spandex, the nylon. When you start breaking down all of the components, that's when you'll have a mixture of waste that cannot be recycled. In Loop's technology, the genius that we've developed is being able to simply isolate the polyester piece. We break down the polyester or the PET into the DMT and the MEG. All of the other waste components, like the buttons, the zipper, cotton, or nylon, it all stays whole, and we can filter it out of the process after the depolymerization. Rather than trying to get a very clean, clear feedstock at the beginning of the process, we eliminate it during the process.
That's a huge advantage on being able to recycle, especially textile waste, because of those different materials and components. Even a simple water bottle has over four different components. You have a cap, which is generally polypropylene. You have the bottle, which is PET. Then you have a label, which is either paper or LDPE, and then you have a glue on the bottle to be able to recycle it. Even a bottle as it is, if you just put that into the recycling, it cannot be recycled as is. In our process, it can. That's a big advantage that we have, especially when we want to source low-cost feedstocks. There's not too much competition for these types of feedstocks because there's no other technology that is able to recycle these materials effectively.
The strategic evolution of Loop, we've developed the technology over the past nine years. Like I said, it's a patented technology. We have over 200 patents globally. We have five different patent classes. We've been operating our facility in Canada, producing 2.5 million pounds per year over the past five years. We have all the learnings from the facility running it 24/7, 365. We sold our first technology license to the Société Générale Group out of France. The French bank, their private equity arm, bought a license to our technology to build a plant in Europe for the technology. We have our first textile-to-textile recycling facility, which will be located in India, with operations set to begin in 2027.
That's going to be the largest textile-to-textile recycling facility in the world, producing about 70,000 tons a year, which equals approximately 165 million pounds per year of textile waste going back into the textile industry. We have a global technology deployment through a combination of licensing and partnering for building out our large-scale manufacturing facilities. We really focus on low-cost manufacturing. In the world we live in today, in the global markets, we really have to be very conscious of the costs. There is a limit to what brands will pay. They will pay a little bit premium for sustainability, but when those premiums get too high, brands tend to shy away from it. Going into the low-cost manufacturing regions, and India is a perfect example for that.
Being able to go into India makes us very cost competitive with any other product in the world. That is where we have a lot of customer demand for the material because we are very competitive on the price. Here is our production facility in Canada. Like I said, we have five years of continuous operations. We do a lot of work with the different brand companies. Companies that we have sold products to, like L'Oréal, Evian, Water, L'Occitane, On Running, the Swiss shoe company. We just launched a pair of running shoes with them. We produce all that here at our facility in Canada. Now we are taking this and building it around the world. Like I said, one project in Europe with Société Générale, they have licensed the technology where we do not have to deploy capital.
They've paid us an upfront EUR 10 million fee for the license, and then there's subsequent payments that come through the life of the construction. There's a residual after construction as well. The large textile-to-textile recycling plant in India is really going to be the key driver for us. Here's the product portfolio that we go into. Textile-to-textile for polyester, like I said, that's the biggest market today is the textile-to-textile companies, such as fast fashion companies such as Zara and H&M, sportswear companies like Nike and Adidas. They're all looking for a way to be able to recycle their textiles or to incorporate more textile-to-textile recycling into their product offerings. Loop's technology allows them to do that, as we've demonstrated with On Running shoes. On Running sent us a whole bunch of old running shoes to our facility in Canada.
All of the top part, the netting of the shoe, that's all polyester fiber. They sent us that material. We broke it down, built it back up for them. You can buy them at the On Shoes website. It is part of their subscription program. It is called the CloudEasy. That is one of the running shoes that we have done in the textile industry. PET for bottle grade. We have worked with companies like L'Oréal, L'Occitane, and Evian Water. We have products on the shelves around the world with these companies. Tire cord is another interesting one. Believe it or not, the inside of car tires, there is a big polyester shell. The shell, the casing that the rubber is put onto, is all polyester. They need more sustainability in that industry, but they also need the quality.
They really need to have virgin petroleum-based quality because the structure of the tire is very important. Loop can provide them with that type of material. We also sell the monomers as-is that can be used into other industries. Those are really the product portfolio that we're focusing on today. It's really about integrating recycled material into high-performance products, reaching company sustainability goals, contributing to the supply chain decarbonization, and seamlessly integrating the recycled content supply chain. These are the markets, but what we can do with the low-cost manufacturing is really being competitive on a price point. That's really key for our customers. Again, here's some of the products on the target market, on the textiles, the fashion industry, home and lifestyle products. Beddings, curtains, things of that nature.
The automotive industry, tire cord , food and beverage, cosmetics, and pharmaceutical. We have certified our plastic for even higher than food grade, it is a pharmaceutical grade. We have become the new benchmark in the pharmaceutical industry for recycled content. We worked with an Italian company called Bormioli, who provides pharmaceutical packaging for the pharma industry. On the textile customers, like I said, this is the biggest market for us. 66% of the global polyester market of about $85 billion, 66% of that is textiles. All of the fashion industry, the carpet industry. What we provide is virgin quality, performance, ensuring spinability, dyeing, and the production of challenging products. Superior production yields, up to 30% better production yields versus, let's say, the mechanical recycling industry, which starts from water bottles. Suited for all color and applications, including whites.
That's a big thing that we've seen with a lot of the customers. When you're trying to use mechanical recycled polyester, which means starting from a water bottle to produce a textile, which is kind of downcycling, they can't get the colors right. They can't use it for white applications, where we've solved that challenge for them. We've successfully produced tons of material for the different brands in the textile-to-textile industry. On the packaging customers, we provide them with quality. The excellence and quality, starting with the low-grade feedstock, the low-quality feedstock, the colored stuff, the opaque stuff. We provide virgin quality material so you can't distinguish it from the petroleum industry, pharmaceutical, the highest quality. We do a lot of co-branding and co-marketing with the companies. You'll see an example later, but we always have our logo on the package with the companies as well.
The virgin quality, performance, ensures transparency, making it ideal for high-end brands. We have successfully trialed, conducted with all of the global leading brand companies and converters. Here are some of our biggest brand collaborations that we have done. Those are the On Shoes I was talking about. It is the On Shoes Cyclon . You can go get that on their website. It is exclusively online through their subscription program. Pleats Mama, these are bags, purses done in South Korea with Hyosung, one of the spinners, and Pleats Mama, the brand company. All of these brands were made from textile to textile. We took waste carpets from Dalton, Georgia, and turned that into a Pleats Mama bag. We have the Evian water bottles, which is a co-marketed product between Evian and Loop. You have our logo on the package.
We have the Lush soap that is on for sale in Paris right now at their flagship store. Again, you have Loop's logo on the package. Those are limited edition Evian water bottles that are sold exclusively at an online retailer in South Korea. A very popular L'Oréal product, Men Expert Water. It's a cleansing product. We did all of the packaging for that here in Canada. It's sold in the United States at the Ulta stores and Carrefour stores in France. Our commercialization strategy, we really have those different pillars. There's a need for recycling in different countries around the world. We had to kind of see how is the best for us to play in this global sandbox. What we've decided is we have a direct investment approach with a strategic partner.
We'll always go in with an experienced operating partner that understands how to operate chemical facilities. We target low-cost manufacturing regions to increase ROI and profits. We leverage those partnerships where Loop brings in the technology, all of the sales and the marketing, because we've done so much sales and we've developed so many customer relationships with all the big brands around the world. We bring in a local partner that has the operational and construction capabilities and also understands the waste supply chain. In India, our partner at Ester does that for us. We generate in that partnership where we own, let's say, 50% of the facility. We'll own 50% of the profits, but we also have a licensing. We take 5% of sales coming back to Loop on an annual basis for all of the technology and the sales activities.
Five percent sold to us comes off the top to us directly, and then 50/50 split at the commercial facility. On a licensing side, we look where CapEx are generally more expensive and you need more government subsidies such as Europe. That is where we decided we feel it is better to partner and really focus more on just the licensing, which can accelerate the rollout because we do not have to put as much capital in. The licensor is the one that puts in the capital. That is what we did with Société Générale. They bought a license. Now they are developing the project. They are choosing the location. They are working with the governments. They are putting up the capital. We receive royalty streams from that. We also sell all of our engineering services and plant modules to the licensees.
It's a great business model, less cash required, and that's for higher-cost manufacturing countries such as North America, Europe, and some more developed parts of Asia, such as South Korea and Japan. That's the model there. Modular construction is really interesting. It allows us to generate income by selling the modules. The modules are all built in India at low-cost manufacturing. We sell them to the projects. It reduces the overall CapEx and OpEx of projects, and it improves the timelines because all of these modules are built in-house under good weather conditions. Everything is built in shops, and then it's shipped on site. All of the engineering services selling the packages for our engineering as we build different projects around the world. Infinite Loop India, this is the largest textile-to-textile recycling facility in the world.
Like I said, it's a 70,000-ton capacity, which is about 165 million pounds . It's going to be operational in 2027. Ester Industries is our partner. They are PET experts. They have three PET plants running in India today since they've been in operation since 1985. They have really good government relationships for permitting, construction, feedstock sourcing. We have selected Gujarat as the province, as the strategic location where we've secured the land for the facility. Why Gujarat? Because they have key infrastructures, renewable energy, which reduces the carbon impact of our material, which is very important for our customers. It is really close to the Surat region, which is really the waste polyester hub in India.
All of the textile, all of the waste coming into our facility, all of the feedstock coming in is coming from waste polyester, which is, and the output is going to be polyester fiber sold to the fashion industry. We have a leading engineering firm, Tata Consulting Engineers in India, that's completing all of the engineering packaging, and they'll be doing the construction of the facility. Tata is a renowned engineering firm in India. They have global experience as well. They're also the ones that are working with us on the modules. Working with a very reputable firm in India. We've hired a Big Four firm, KPMG, to do the detailed project report and for the debt syndication. Loop generates, like I said, Loop generates our royalty revenue by granting the JV a license to the technology. For sales, that's a 5% of sales coming back to Loop.
We have really fantastic financial returns for India. Low-cost manufacturing, low source of feedstock, very low labor rates. Construction costs are very low as well because of having the lower labor rates in India. We see India's approximately 70% reduction in CapEx versus building a plant, let's say, in a high-cost manufacturing country such as South Korea versus India. Those are really important economics to be able to keep prices in line, so customer demand is strong, and to still have very robust financial returns. It's a 50/50 joint venture with Ester. Like I said, the waste polyester is really important for us. Having that availability because of all the sewing factories in India, you wouldn't be able to get that type of waste polyester in North America or in Europe. The supply chain isn't there.
You need to be in Asia for that supply chain. There is no better country than India for that. It is such an up-and-coming market. Tons of investment going there. Tons of European and Western companies and European and North American companies building manufacturing there. The supply chain for all of the textiles is all across Asia. It is close to the end markets as well. Low-cost manufacturing is the key into the plastics world. Today, China is flooding the world with cheap chemicals, cheap plastics. Being in India allows us to be competitive even with the Chinese market. What is really cool about India is the availability of clean energy and biofuel. 100% of our energy needs are going to be coming from renewable energy, where they burn rice husk, which is the peel of a piece of rice.
They use that as an energy source. It is a really interesting way for us to reduce global emissions for our plastics. We also have the traceability. That is another really important part when you are talking about the polyester textile companies, being able to trace the supply chain, where it is coming from, making sure it comes from polyester fiber, all the way through to the finished product. If you take a pair of shorts or a T-shirt made with our polyester, we can examine that under a microscope and tell that it is coming from our process. You can certify it all the way back to what type of feedstock was used to produce that finished product. That is something that is really important to be able to have that traceability through our supply chain for the customers.
Global brand customers are really interested in becoming feedstock suppliers to enable full circularity. A lot of the big textile companies and fashion companies have manufacturing in India, in Bangladesh, in Thailand, other parts of the world where they generate a lot of this type of textile waste. They will be sending that waste to us as they do today in our Canadian plant, and we complete the circularity of their products. Being able to give them back the circularity, taking in that waste product and then providing a new product from it. Project economics on the Infinite Loop, like I said, it's all going to be sales to the global textile companies for circular fashion. Loop generates royalties as a percentage of sales.
Very attractive project economics and returns due to low-cost manufacturing, low-cost labor, and much lower CapEx, generating strong free cash flow from the facility. The other big partnership we have is with the Société Générale Group, the French bank. Loop completed the sale of its first Infinite Loop technology license to Société Générale Group for the first facility. It is for one facility in Europe. They have an objective to build three or four of these facilities, but we started with a license for one. We received an initial EUR 10 million down payment with two additional milestone-based payments to be paid out, and then all of the engineering services that will go along with that. Any additional projects in Europe after the first one would require an additional technology license.
Société Générale did an extensive due diligence on Loop's technology, looked at all the technologies in the space. They chose our technology, and we put that deal together in December of last year. We are forming a strategic partnership in Europe. Loop has a lot of the contacts with all of the European brands and will be leading the way on customer discussions for the facility. We have the right to invest up to 50% in the facility if the economics are attractive enough, but most of the capital being put into the project is going to be by Société Générale and their partners in Europe. As part of the strategic partnership, Société Générale Group also invested an additional EUR 10 million into Loop via a convertible preferred security with a conversion price of $4.75 a share, which will convert in 2030.
Really, our vision for 2030 is to continue with the Canadian plant producing the 2.5 million pounds a year, then have the first plant starting in 2027, delivering material to the textile companies, have the second plant, so a second facility in India starting soon after, and then have the European facility up and generating profits before 2030. That is kind of the five-year plan. Financing future products will be done through the free cash flow from the joint ventures and licensing fees and engineering services. There is no need to go out and raise additional capital for all of these new facilities. On the licensing side, obviously, we have a very asset-light model where we just receive the licensing fees and the engineering services. Any future additional expenditure in India with the Ester partnership would be through the profits of the joint venture.
We want to have a global footprint in Europe, Asia, and North America through technology licensing and direct investment. Government regulations and brand commitments are really driving sustainability forward. Europe and Asia are really leading the way there. It is creating a huge demand for Loop's technology and our finished product to the brands.
Thanks so much for that overview. I think that was a really, really good understanding for the audience of the company and what it does and the market opportunity. I know that we're about at time, so I want to first see if the audience has any questions. If not, I'm going to try to sneak one in before we hop off. Anything from the audience?
I guess my question would be, since the last few years when Loop's been here, it seems like there's been a lot more focus on the textile-to-textile side of the business, and that's getting a lot more attention with your India JV. I guess, can you just touch on a little bit the economics of that sort of project versus some of the other applications that have been highlighted more further in the past?
Yeah, textile versus packaging is very interesting because there's really no solution for textile-to-textile. No one is out there getting textile-to-textile material today. What's happening is the textile companies are using mechanical recycled PET, where they start with mechanical recyclers start with a water bottle.
They take off the label, they take off the cap, they wash it, they melt it down into a new product, a new pellet, and then they sell that. They turn that into a fiber. It works well for certain products, especially low-end products like the carpet industry. Mohawk Industries is the largest mechanical recycler in North America. More and more, because there is pressure from the packaging companies, packaging companies are saying, "We do not want our water bottles going into textiles. We want the water bottles to go back into packaging." Even though there are color issues and quality issues, they can get some recycled content into some packaging. It leaves the textile companies with no alternative. That is where there is a big pull from the textile companies to be getting more recycled content.
The dream is for them to get it from textiles, which Loop can deliver that to the customers, as we've demonstrated with On Running shoes. I think the other pull is really on the textile side is the polyester is the actual product. You are the running shoe. You are the shirt or the shorts or whatever product they're making. When it's lifestyle brands like, let's say, Nike or Zara, H&M, usually it's a younger generation. They tend to care a little bit more about sustainability, more about the environment. When it's outdoors, running shoes, people are more conscious of the environment. That brings a big pull, much more demand from the customer pool to incorporate more recycled products. For us, low-cost manufacturing in India is perfect because of the low-cost nature of the manufacturing.
Competitive pricing, great returns, and near the polyester supply chain. All of these running shoes and clothing are all made in Asia and different parts of Asia. Being close to that supply chain is really important.
That makes a lot of sense. Thank you so much. We hope to have you back again next year. We really appreciate it.
Thank you.