Before we get started, let me remind you that today's meeting will include forward-looking statements within the meaning of the securities laws. These forward-looking statements relate to, among other things, current plans, expectations, events, and industry trends that may affect the company's future operating results and financial position. Such statements include risks and uncertainties, and future activities and results may differ materially from these expectations. Additional information concerning these statements and related risks and uncertainties is contained in Risk Factors and Cautionary Statements section of our latest annual report on Form 10-K, our quarterly report on Form 10-Q filed with the SEC yesterday's press release. Copies of these documents are available at the sec.gov or from our investor relations department. At this time, I'd like to turn the call over to Daniel Solomita, Chief Executive Officer of Loop Industries. Daniel, please go ahead.
Thanks, Kevin. Hi, everyone. Welcome to our Q3 earnings call. I'll just start with the, you know, the main headlines of what has gone down in the last quarter. First, the sale of the land in Bécancour, it's just a really solid business decision. The value of that land has increased over 500% in the 2 years since we bought the land. The value of the land has exploded, and there was a lot of people that were looking for land in Bécancour, and that was the main motivation behind selling the land. The value had increased significantly. For us, that was just a really solid business decision. Selling the land plus our cost reduction initiative gives us 3 years of cash on hand, that's, you know, without having any raising capital and dilution.
That is more than enough to get us through this, you know, current global slowdown that we're experiencing. The Quebec and the Canadian project is still really important for us. It's an important project for Loop and it's important for Canada to be able to get to their 2030 goals of eliminating plastic waste. We're continuing to be engaged with the Canadian government and the Quebec government. We've already looked for other land available in Quebec and outside of Quebec in other parts of Canada. There's plenty of land available that's much cheaper than the land that we had at Bécancour. When the macro environment improves, you know, we'll be ready to begin that project.
It's still a very important project for us, and it's definitely still in our cards for the future projects that we're gonna develop. With these, you know, uncertain macroeconomic times, it's important for us to make sure that the projects that we do focus on and that we do build are the ones that have the least amount of risk and the highest amount of success. That's what leads us to the projects that we're working with our partners at SK Geo Centric. SK Geo Centric is a large petrochemical company with, you know, very deep resources. Our project in Ulsan, South Korea, has been going on for quite a while. It's not like it's a new project that we're just starting. We've been working with SK hand in hand.
You know, teams from Loop and SK are working on a daily basis together to execute on the Ulsan project since we announced our partnership when SK became a 10% owner, equity ownership stake in Loop in 2021. The companies have been working really closely together, and we have multiple projects with SK that we're working on. First one being the project in Ulsan, South Korea, that is scheduled to break ground this year in 2023. Really important project for us. Having that foothold in Asia is hugely important for some of our customers, especially on the fiber side, so all of the polyester fiber supply chains for the clothing and textile industry. So that's a really important area for us. You know, SKGC brings in a wealth of experience.
Obviously, they do all of the operation of the plant, so they have an experienced operations team. We're building the plant on one of their existing petrochemical sites, so they already have a lot of the infrastructure for the site available. We're working together with SK ecoplant, Eco 工 程, who is the SK division of their in-house EPC contractor. Very large organization. They build petrochemical plants all around the world, and they have a huge wealth of knowledge in this experience and building not only on the engineering but on the construction of these facilities. They'll be providing all of the construction and engineering services for the projects. SKGC also provide the majority of the capital for the projects, which is obviously very important for Loop. I said they're an experienced operator.
SKGC also is in charge of all of the feedstock sourcing. Loop and SKGC working together on the customers. Loop brings in the global customers that we have for other projects and SKGC works mainly on the local customers. It's really a tremendous partnership between both companies. These are projects are really the ones that are the easiest to execute, the least amount of risk, because of having a partner such as SKGC. You know, in these more uncertain economic times in the macro environment out there, we think it's, you know, best decision for Loop to be executing on the projects with the least amount of risk and the easiest to execute on. We have plenty of projects in the pipeline.
There's tons of interest for the technology in other parts of the world and in Asia as well. Asia, obviously with SKGC, we have a plan to build multiple plants with them over the coming years. We also have multiple projects in Europe. We have a project in France, but we are also looking at other projects in Europe as well with the same consortium of partners. We have other projects in other parts of the world. There's no shortage of demand for the technology or for the final product. You know, in today's world, we have to be looking at which projects are the easiest to execute on with the least amount of risk and the highest return on capital. That's where we see huge benefits in working with our partners at SKGC.
That's all I have, so we can open the call up for questions now.
Thank you. If you wish to submit a question, please press star followed by one on your telephone keypad now. If you wish to withdraw your question, please press star followed by two. When asking your question, please ensure you're unmuted locally. As a reminder, that's star followed by one on your telephone keypad now. Our first question comes from Gerard Sweeney of ROTH Capital. Gerry, your line is open. Please go ahead.
Good morning, Daniel. Thanks for taking my call.
Oh, hi, Gerry.
I was hoping that maybe you could discuss maybe the best that you're permitted to, maybe some of the critical next steps with SK. I believe you're looking at, you know, there's a bunch of scenarios, I think maybe determining structure of the JV, as well as the financing of the project on a go-forward basis and maybe any other items. Secondarily, maybe timing or target timing on sort of hitting these milestones. I know things are in flux, but want to get an understanding of, you know, what big steps are out there and potentially when we can see some resolution on those steps.
Yeah. Thanks for the question, Jerry. With SKGC, things are not in flux. It's, you know, been very organized and structured work that we're working with them. There's the finalization of all of the joint venture agreements. That's something that we are at the final stages of completing with them. That's one part of it. You know, our engineering teams are already working together on the final engineering and construction. Like I said, we've engaged with SK ecoplant, the Eco Engineering, which is a division of SK Inc, the broader company. SK ecoplant will be providing all of the engineering and construction for the facility. We're scheduled to break ground on the facility in Q3 of 2023. That's the goal.
SKGC has been very vocal about the project and their intentions, you know, most of that in the Korean and Asian media. It doesn't really come to the Canadian or the U.S. media very much. You could look through The Korea Times and things like that. They're very vocal about the project and the timing and the importance of this because SKGC really wants to, you know, be seen as the largest recycling company in the world and really moving sustainability to the front of their agenda. I would say, you know, signing of the joint venture, which we're at the final stages of, and then breaking ground in Q3 of this year. As far as the financing, we're discussing, you know, SKGC in the partnership. SKGC provides 80% of the capital for the project.
Loop is responsible for the 20% of the capital for our equity portion, and that's the portion that we're discussing with SKGC on providing the capital that Loop needs for our equity position in the project.
Got it. That is it for me. I appreciate it. Thank you.
Thanks, Gerry.
Thank you. As a reminder, if you wish to submit a question, please press star followed by 1 on your telephone keypad now. Our next question comes from David Quezada of Raymond James. David, your line is open. Please proceed.
Thanks. Morning, everyone. Daniel, my first question here, just kind of a follow-up on what's happening with the Ulsan project. Like, are you able to comment on whether or not the long lead time pieces of equipment have been ordered and any thoughts or, you know, context around how those timelines are shaping up relative to expectations and if costs for that facility overall are still shaping up in line with your expectations?
Thanks, David. Nice to hear from you. Thanks for the question. Long lead time equipment, so the two reactors, the polymerization reactors that Loop had ordered for the Bécancour project will be transferred over to this project. So that long lead time equipment will just be shifted over because those are standard pieces of equipment, so they can go to any of our projects. As far as long lead time equipments for this project, right now, like I said, we're scheduled to break ground in Q3 of 2023, so the long lead time order, equipment needs to be ordered later on during the year. There's nothing that needs to be ordered today. Costs are in line with expectations. You know, we already have our first cost estimates, you know, internally for the project. They've been approved.
You know, we're in line. We don't see, you know, we've built all of this through this crazy inflationary environment, we don't see, foresee any, you know, changes coming up in the cost of the facilities going forward. You know, hopefully we'll start seeing some reduction in cost as we start seeing, you know, the world's economies cooling off a little bit and supply chains easing up, hopefully, with China's decision to forgo their zero-COVID policy. The project's in a really great space right now and, you know, both parties are very dedicated and very motivated to get this project built as soon as possible.
Excellent. Thanks for that, Daniel Solomita. Maybe on feedstock for this facility, are there agreements in place for a certain volume of feedstock? Like, are you able to provide any color on if any of it has been sourced so far?
Yes. There's quite a bit of feedstock that's been, Loop has been testing the feedstock from different Korea suppliers, so we're doing a lot of that work together with SKGC. There's a lot of, you know, the typical feedstocks that we use in our process, which is, you know, the waste PET fines from the mechanical recycling industry, PET trays. A big thing in Asia is gonna be the polyester fiber waste, coming from all of the polyester fiber clothing supply chains. That's gonna be a feedstock that's important for the, for the Asian expansion. SKGC is primarily responsible for the feedstock. You know, we support them with all of the testing and all of the qualification, but it's really SKGC's role in the joint venture to be able to source the local feedstock.
Okay, perfect. That's great. Then maybe on the sales side of things, I guess, you and SK are kinda working together on lining up new customers. Is there a target you guys have, in terms of the proportion of volumes from the Ulsan facility that you'd like to have contracted? Do you anticipate those contracts happening or closing prior to groundbreaking, or would you break ground and then look to, you know, contract whatever volumes you're targeting?
We always look to have a certain volume or capacities of the volume sold or reserved in some type of either a firm contract or an LOI with customers before the breaking ground of the facility. Yeah, we're definitely starting to engage with the customers on which customers will be taking volumes from the Asian facility, focusing on some Asian customers. You know, we can also ship material from Korea anywhere in the world. You know, the Asian supply chain, like I said, in the polyester fiber space are extremely interesting because a lot of the polyester fiber clothing companies need more sustainability. They need more recycled content into their, into their fibers, into their clothing and into their products.
Today, you know, the mechanical recycling industry is the only way for them to do that, so taking water bottles and turning that into fibers. The ability to get fibers back into fibers is something of huge interest to them, and that's obviously Loop's technology can provide that to them. There's strong interest there, not only to sell them the final material, but also to be able to recycle the waste that's generated at their facilities. You know, we anticipate to have quite a few fiber customers from the facility. There's also the bottle grade customers that we work with around the world that'll have needs in Asia as well, so. We do anticipate having, you know, I would say the majority of the volume already contracted before breaking ground.
Okay, excellent. Maybe just one more from me, if I could. You know, your R&D expenses were down in the quarter, which I, you know, think is consistent with your plan to reduce the burn rate. Could you comment on just, you know, are most of your R&D activities that you, that you need to undertake for your upcoming projects, are they mostly complete at this point? Or I think you mentioned you're still doing some R&D or some testing for feedstock in Korea. I was just wondering, you know, how you'd expect that R&D expense to trend going forward?
The biggest... You know, in our cost cutting, in our cost reduction, the biggest thing that we've done is we've just reduced the hours of operation from the production facility in Terrebonne. The production facility in Terrebonne, the nameplate capacity is 1,000 tons a year, you know, roughly 2.2 million pounds a year of capacity, is what we can produce at the Terrebonne facility. The facility was never built to generate profits, but it's built to be able to showcase the technology at a commercial scale and supply customers with commercial volumes. We've been successful in doing that. You know, the plant worked well.
We built it up to a scale that anybody can come and see, and our partners can do due diligence or customers or, you know, companies like SK GEO Centric can do, you know, full due diligence on the technology. That's been completed. By reducing the hours of operation, instead of, you know, running the facility 24/7, slowing down, you know, having full night shifts, having 4 shifts of workers, I mean, that's a very big expense. You can't generate a profit because the volumes are too small. Really it's just about reducing the hours of operation. We're still producing material. We're honoring all of our existing customer contracts with On Shoes and, you know, we added some material with other brand owners, and we have some upcoming events as well with other brand owners coming up.
We still have the operation. Though that R&D expense is really the operations running at the plant. We will always keep the facility open to be able to test feedstock 'cause that's always really important. That's an important part of the business. Being able to qualify any feedstocks that come in from Korea or any other part of the world that needs to be, characterized. We do it first at our, you know, lab scale, and then we do it at the production facility in, you know, a few tons at a time. The R&D and production expenses kinda mix together in there. You know, you need to keep this facility open to be able to produce material for the customers. You mix in the customers with the R&D because we're testing feedstock.
It all blends in really well together. There's no need for us to be running this facility at full capacity and producing 1,000 times and trying to get it out there. Today, in the world we live in today, it's, you know, cost cutting is an important measure. I think it makes the customer, the company leaner and keeps people motivated. I think it's been overall, it's been a success.
Excellent. Appreciate the call. Thanks, Daniel. I'll turn it over.
Thank you. At this time, this concludes our Q&A session. I'd now like to turn the call back over to Mr. Daniel Solomita for his closing remarks.
Thank you very much, operator. I guess this concludes our Q3 earnings call. Like I said, the company's made really smart business decisions. Selling the land in Bécancour was a really smart business decision, as it had appreciated over 500% in two years. Focusing on the projects that are the easiest to execute on with the least amount of risk with SKGC is obviously, in my mind, and in management's mind, the best course of action. Really excited about 2023, breaking ground on our first facility and then, you know, many more to come. Thank you very much for your time.
Ladies and gentlemen, this concludes today's call. You may now disconnect your lines.