(Bloomberg) -- South Korean conglomerate SK Group's unit is buying a 10% stake in TBM Co., a Japanese startup known for its technology that turns limestone into a plastic substitute, as environmental concerns push companies to seek cleaner and safer products.
The 13.5 billion yen ($122 million) investment is the venture's biggest funding since it was established in 2011 by entrepreneur Nobuyoshi Yamasaki, according to an email from TBM. The firm is also forging a venture with SK Chemicals to develop biodegradable material that offers alternatives to single-use plastics.
The deal underscores growing calls from investors to address social and environmental problems as companies accelerate their shift into cleaner and more sustainable business. TBM is known for creating Limex, a new material mostly made from limestone and a small amount of polymeric resin that acts as a binder. Limex can be used as a plastic or paper substitute in products ranging from name cards to shopping bags and food containers.
TBM said the joint venture will combine the Korean firm's biodegradable plastic with calcium carbonate derived from limestone to make what it calls “biodegradable Limex.” TBM will take a 49% stake in the venture and the Korean partner will hold 51%, it said.
SK Group said in a separate statement that the deal will help it sell Limex at a competitive price in countries like South Korea and the U.S. SK Inc.'s shares rose 0.5% on Friday.
The startup said it will use the money for expansion, including setting up the joint venture with SK Chemicals, and for research and development. TBM received the funds from SK Japan Investment, a unit that was created in May by four SK companies, including the conglomerate's holding company and SK Chemicals, to invest in businesses promoting ESG practices in Japan.
TBM has received funding from companies including Goldman Sachs Group Inc. and Japanese trading giant Itochu Corp. In April, it secured a green loan arranged by Nanto Bank Ltd. Yamasaki had said in a May 2019 interview that his company planned an initial public offering in 2021.
(An earlier version of this story corrected the funding in the first deckhead.)
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