Origin Materials announces cost cuts and strategic refocus to support PET cap rollout
Origin Materials announced an organisational realignment and cost-containment measures as proactive steps to strengthen its cash position and capital resources for PET cap commercialisation. These actions are intended to help the company achieve an Adjusted EBITDA run-rate breakeven in 2027.
“We are closer now than ever before to successful delivery of our PET caps to multiple world-class beverage brands. It has taken us longer to reach this point than expected, which we believe has not had a negative impact on the strong interest in our product but has negatively impacted our stock price and consumed more resources than projected,” said Origin CEO John Bissell. “Therefore, we’ve taken a number of necessary, and non-dilutive measures to enhance our cash resources and reduce the amount of additional capital we require to achieve cash-positive operations, while maintaining the required expertise and horsepower to successfully commercialise our PET caps in 2026. We estimate that we’ve reduced our operating expenses by approximately 25% by both ceasing further investments in our furanics platform, narrowing our PET cap format development initiatives in 2026 by deferring non-beverage cap format development to 2027, and limiting our CapFormer line build-out in 2026 to the six lines already fully procured and scheduled to be installed by end of year. With these measures in place, which include reduction in headcount, and continued successful execution of our plan, we expect our previously announced convertible debt and equipment debt financing arrangements to provide the necessary working capital to fund operations to achieve Adjusted EBITDA run-rate breakeven in 2027.”
Bissell added: “Our prospective customers consume billions of caps per year and they continue to expect to begin converting to our PET caps upon successful acceptance testing, which is underway. Due to the timing variability of those processes, we are limiting our forward financial guidance to the aforementioned expectation of reaching Adjusted EBITDA run-rate breakeven in 2027. As we close customer offtake agreements, we expect our forecasting precision to improve and to be better positioned to provide addition guidance.”
Commercial and product update
- The company said customer interest in its 1881 PET pressurised water caps remains strong. Initial deliveries to several global beverage brands are planned for the first quarter of 2026 to continue product acceptance testing.
- Origin stated that the product represents a new pressurised cap format for the beverage sector. The company said that, while technical challenges have been overcome, further customer-driven qualification and optimisation work is expected prior to broader commercial adoption.
- In August 2025, Origin announced that beverages using its PET caps had reached retail shelves in California. The company said its CapFormer technology supports the industry’s shift towards mono-material packaging, which is designed to be fully recyclable and to reduce contamination in PET recycling streams.
- In October 2025, packaging distributor Berlin Packaging placed an initial order for PET caps, which Origin said it is currently fulfilling.
- The company said it expects to add further premium water customers during 2026.
Financial update
- Origin said it has reduced projected annual operating expenses from approximately $40 million to around $29 million. The reduction reflects workforce cuts, the suspension of development spending on its furanics platform, and a narrower scope for new cap format development in 2026.
- The company expects to record restructuring charges of about $0.9 million related to the workforce reduction, primarily for severance and benefits.
- Origin plans to limit CapFormer production line expansion in 2026 to six lines that have already been procured and are scheduled for installation by year-end.
- The company said the cost-saving measures are intended to reduce its future financing requirements as it works towards profitability.
- Origin stated that it may access additional tranches of its previously announced $100 million debt facility to support near-term working capital needs, subject to customer qualification timelines for its pressurised water cap. The company added that it continues to evaluate financing options as part of a strategic review process with RBC Capital.