Today we are announcing our first signed customer for Origin’s PET caps and closures,” said Rich Riley, Co-Chief Executive Officer of Origin. “We anticipate delivering multiple billions of caps to this customer over the next several years, which we expect will generate over $100 million in revenue in the initial two-year term, with revenue expected to begin in early 2025, ramping significantly in 2026. Therefore, to fulfill demand for this MOU as well as anticipated demand from other customers, we expect to build capacity well beyond our initial system purchases, which we previously announced as having expected capacity to generate between $45 million and $65 million in annual revenue. Concurrently, we are negotiating potential licensing agreements. We anticipate that licensing our technology, in addition to selling caps that we produce with our world-class manufacturing partners, will drive explosive growth for our PET caps business. This will further catalyze the revolution in recycling circularity and product performance that we are bringing to beverage packaging, food packaging, and home goods. Our first commercial-scale mass production system is on track to start producing PET caps later this year, with caps revenue ramp-up to begin in the first quarter of 2025. During July, in Germany and Switzerland we tested all manufacturing line subsystems at full-speed and we are pleased with the system’s performance. We also crossed the threshold of 1,000,000 caps produced to date, which puts us well on our way to launching this highly strategic business. With over $130 million in cash and a path to profitability through near-term businesses led by caps and closures, we are positioned to vigorously grow our business and cultivate our broader technology platform in the quarters and years ahead with a strong IP moat and a highly innovative and creative team.”
Riley added: “Highlights from the quarter include announcing a European PET cap mass production partnership with Bachmann Group, a respected Swiss packaging production and logistics company. Bachmann Group will assist in the end-to-end operation and automation of our PET cap mass production lines, helping us produce billions of caps by taking pellet or flake, including recycled material, all the way to finished closures using Origin equipment. We also announced a North American PET cap mass production partnership with Reed City Group, a full-scale injection mold builder, injection molder, hydraulic press maker, and automation solutions company. Regarding our biomass conversion technology, we continue to grow the long-term value of the Origin platform by engaging potential strategic partners around scale-up, delivering product samples, and engaging in market development activities which we expect will generate meaningful results. We couldn’t be more excited about where we stand today in our journey to make the world’s materials better performing and more sustainable.”
Company Second Quarter and Recent Business Highlights
Origin Materials reported quarterly revenue of $7.0 million generated by the Company’s supply chain activation program. The Company also made significant progress in commercializing its caps and closures business. Recent progress includes:
- Today we are announcing our first signed caps customer memorandum of understanding (“MOU”). We are reaffirming that caps commercial-scale production is on track to begin during the fourth quarter this year, with revenue generation expected to begin ramp-up during the first quarter of 2025. The MOU totals billions of PET caps and is expected to generate over $100 million in revenue during the initial two-year term, with revenue expected to begin in early 2025, ramping significantly in 2026. We expect to build capacity well beyond our initial system purchases, which we previously announced as having expected capacity to generate between $45 million and $65 million in annual revenue. Concurrently, we are negotiating potential licensing agreements. We expect additional customers alongside this initial agreement and we plan to announce them as appropriate, taking into consideration context such as the timing of prospective customer product launches involving our caps and our customers’ related marketing activities.
- This quarter we achieved multiple manufacturing milestones. We have produced over one million caps to date. For our first commercial manufacturing line, we ran each subsystem at full speed with the system operating as expected including industry standard high-speed camera systems. And we validated QA/QC indicators that operators can use to assess quality, such as stable cap weight and dimensions.
- We announced a European PET cap mass production partnership with Bachmann Group, a leading packaging production and logistics company. Bachmann Group, based in Switzerland, is a more than 50-year-old group of companies with deep expertise in packaging production, quality assurance, and logistics, experienced with high-volume, sophisticated products like coffee capsules requiring high-precision manufacturing.
- We announced a North American PET cap mass production partnership with Reed City Group, a full-scale injection mold builder, injection molder, hydraulic press maker, and automation solutions company. Origin and Reed City Group will operate commercial production lines in Reed City Group’s Michigan facilities.
- We unveiled engineering and design innovations in the manufacturing of our tethered PET caps,the world’s first tethered caps made with PET. These tethered caps are a breakthrough in circularity, designed to improve cap collection rates for recycling, and offer an excellent user experience while enabling leading brands to respond to the EU Single-Use Plastics Directive. The directive requires that caps remain connected to beverage containers in the EU and went into effect in July 2024.
We continue to perform development work related to our biomass conversion technology. Origin 1, our plant in Sarnia, Ontario, Canada, continues to support market development activities. Multiple Origin partners are engaged in development work using our materials including crystallized CMF and carbonized HTC. For Origin 2, we continue to engage customers as part of our asset light strategy for further biomass conversion technology scale up, with timelines and economic forecasts to depend on the partner and deal structure, which can explore a range of scenarios and locations including Geismar, Louisiana and Asia brownfield scenarios. We are exploring a variety of plant designs, evaluating potential sites, and performing joint development work including testing and optimizing various feedstocks to generate data that could influence our scale-up strategy, with updates to be provided as appropriate.
