Origin Materials reports strong Q1 2024 results, accelerates production lines
Origin Materials, Inc. announced its first-quarter financial results, emphasising progress toward profitability driven by its PET caps and closures business. The company reported quarterly revenue of $6.8 million generated by its supply chain activation program and joint development agreements. The company also made significant progress in commercialising its caps and closures business. Origin announced its PET caps and closures business in August 2023 after quietly developing it for several years.
“Over the quarter, we have seen strong progress on our pathway to profitability, led by our groundbreaking PET caps and closures business,” said Rich Riley, Co-Chief Executive Officer of Origin. “We announced a few of our caps and closures manufacturing partners including PackSys Global and IMDvista, and we continued to make excellent progress with prospective and as yet unannounced customers who are excited about our revolutionary caps offering and the benefits it brings for recycling circularity and performance. In addition, today we are announcing that we have accelerated the procurement of multiple additional high-throughput commercial production lines to complement the first line, which we already ordered. We aim to bring our first manufacturing system online during the fourth quarter 2024. At full capacity, our initial systems are expected to generate between $45 million and $65 million in annual revenue. The caps and closures opportunity is massive – an over $65 billion market – with currently engaged prospective customers alone consuming tens of billions of caps per year. We look forward to rapidly standing up additional lines addressing multiple product types, including tethered beverage caps and caps for non-beverage home goods applications. We are also pleased to announce another technical milestone passed with the completion of a successful capping trial on a commercial bottle line applying Origin PET caps – made with recycled PET – to thousands of filled beverage containers.”
“Apart from our caps and closures business,” Riley continued, “we continue to grow the long-term value of the Origin platform by engaging potential strategic partners around the scale-up of our biomass conversion technology, including exploring high value application development initiatives that could generate near term revenue. Last, but certainly not least, this quarter we were pleased to convert sustainable wood residues at Origin 1 into our versatile intermediates. This milestone in the scale-up of our biomass conversion technology generates valuable information to support future technology scale-up and provides an important demonstration for our customers of our technology’s performance. All of this is exciting progress for our customers and team as we continue to execute in our mission to drive the once in a planet transition to sustainable materials.”
Recent progress includes:
- Partnership with PackSys Global, the leading packaging machine producer for plastic closure slitting machines, to produce the world’s first PET cap and closure manufacturing system. PackSys Global is a respected leader in packaging machines for the cosmetics, beverage, pharmaceutical, and packaging industries with facilities in North America, Europe, and Asia that has operated for over fifty years.
- Partnership with IMDvista, a global leader in high-speed testing systems, headquartered in Switzerland with locations around the world including the United States, Germany, and Taiwan with systems in use on every continent. IMDvista manufactures advanced camera systems that inspect thousands of closures per minute and which are expected to give Origin the ability to inspect billions of caps per year.
- Announced of first caps and closures product, the world’s first CSD (carbonated soft drink) PET cap, the lightest of its kind ever produced at commercial scale.
- Announced the first tethered PET cap, a breakthrough in circularity, designed to improve cap collection rates for recycling.
- Origin has accelerated the procurement of multiple additional high-throughput commercial production lines to complement their first line, which is already purchased. The company aims to bring the first of these manufacturing systems online during the fourth quarter 2024. At full capacity following ramp-up, the initial systems are expected to generate between $45 million and $65 million in annual revenue depending on product mix.
- Successful completion of a capping trial on a commercial bottling line applying Origin PET caps to thousands of filled beverage containers. Recycled PET with no additives has been used to modify the polymer.
In addition, Origin Materials achieved another milestone in Q1 2024 by successfully converting wood residue feedstock into sustainable intermediates at its Origin 1 plant. By utilising locally sourced wood residues controlled by the Forest Stewardship Council (FSC), Origin can produce sustainable intermediates from wood chips, shavings, and sawdust, replacing petroleum-based products. Origin 1, located in Sarnia, Ontario, Canada, serves as a crucial asset supporting market development and preparation for the scale-up of Origin 2. Despite near-term macroeconomic challenges, Origin maintains strong customer demand, reflected in total offtake agreements and capacity reservations exceeding $10 billion. The company remains engaged with strategic partners to explore various plant designs and potential brownfield sites while continuing funded joint development work to optimise feedstocks for scale-up.
Full year 2024 outlook
Origin Materials is maintaining its guidance for 2024 revenue and net cash burn despite current business conditions and trends. The company expects revenue to range between $25 million and $35 million, with a net cash burn projected to be between $55 million and $65 million. These projections do not fully account for unforeseen events, including changes in global economic conditions.
