LD Carbon closing $250 million contract with South Korean oil firm

LD Carbon is on the brink of closing a 10-year tyre pyrolysis oil contract with a South Korean oil firm. Tyres & Accessories understands that the 10-year deal will be worth around $25 million a year, making the whole contract worth around $250 million.

The signing of the contract will also see the oil company invest about $7 million in LD Carbon. Meanwhile, it will also result in LD Carbon and South Korean government-run bank inking a three-way investment agreement. Specifically, the Korean government-run bank will invest and loan a total of $11 million in LD Carbon. The deal forms the basis of LD Carbon’s Series B funding round, which has therefore raised around $18 million.

The new funds combined with capital raised in the firm’s Series A funding round, which brought in $15.5 million back in mid-August 2022, will be used to build a new plant in Dang-Jin, South Korea. That factory will process 50,000 tonnes of end-of-life tyres (ELT) every year. From those 50,000 tonnes of ELT, LD Carbon says it should be able to produce 20,000 of pyrolysis oil, 15,000 tonnes of recovered carbon black (rCB) and 5000 tonnes of scrap metal from steel cord. The plant is expected to be completed by the end of 2023.

The Series A funding round saw Value System Asset Management participate as an anchor investor, and four investment institutions, including Korea Investment & Securities Co., Pentastone Investment and Elohim Partners participate.

LD Carbon supplies GCB (Green Carbon Black), an eco-friendly carbon black (rCB) made using waste tyres that have been pyrolyzed, refined, and processed, to domestic and foreign tyre and rubber manufacturers. In 2021, the company was selected as one of the ‘2021 Green New Deal 100 Promising Companies’ awarded to promising SMEs with green technology by the Ministry of Environment and the Ministry of SMEs and Startups last year. has been obtained.

“We will develop new products through continuous investment to increase sales to global tyre makers,” Bum Seek Kim, director of sales at LD Carbon explained.

Meanwhile, LD Carbon plans to launch a new product with improved quality and performance compared to the existing rCB by the end of 2023.

T&A understands that LD Carbon will open its third-phase Series C investment round in the near future to “initiate a new plant project in South Korea and/or overseas”.

LD Carbon partners with SRI

In mid-December it emerged that Sumitomo Rubber Industries (SRI) and LD Carbon had reached an agreement to commercialise technology to produce sustainable tyre manufacturing input materials. A memorandum of understanding (MoU) between the two firms was signed in November 2022 and will the two parties jointly develop LD Carbon’s GCB (green carbon black) as a partial substitute for existing fossil fuel-based carbon blacks.

Specifically, LD Carbon and Sumitomo Rubber are aiming “to commercialise GCB-774G and GCB-600 series, aiming to replace the existing carbon black (N660) by up to 20% to 70%, respectively,” according to the company.

The production volume for the partnership is 3500 tonnes per annum (ktpa) of GCB and 4000 ktpa of pyrolysis oil by 2026.

LD Carbon is currently running a recycling facility in Gimcheon, South Korean. However, once the new Dang-Jin, South Korea plant is on-line – billed as the largest of its kind in Asia – combined with the forthcoming third plant, LD Carbon will have a formidable level of capacity.