PureCycle details Q2 results

PureCycle Technologies Inc. has provided an update for the second quarter of fiscal year 2024, which ended June 30, detailing operations at its facility in Ironton, Ohio, as well as the identification of new markets for its recycled resin.

The Orlando, Florida-based company reports that it spent a significant portion of the second quarter making improvements to its Ironton plant, noting the upgrades led to greater reliability during the production runs from late-May through June with feedstocks low in coproduct 2 (CP2). During that time, the company says the facility had multiple days with more than 100,000 pounds of pellets produced.

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When it transitioned to a feedstock with higher levels of CP2 in late-June and July, PureCycle says the rates were limited principally by reliability issues and the CP2 recovery and handling system.

The company reports that upgrades to the front end of the CP2 removal system made in April are working as designed, adding that material removed from the system now is consistent in form and density. The current primary limiting factor is reducing the size of the end product so it can be removed through an automated process. The company has begun implementing adjustments to the recovery and handling system and believes once this limitation is removed, production rates should improve throughout the rest of the year.

“Our team made foundational progress in the second quarter, in terms of production, improving our reliability and with higher levels of coproduct 2, or CP2,” PureCycle CEO Dustin Olson says. “All of this has provided a further understanding of how the plant behaves at higher rates. The many improvements made at the Ironton facility during the planned outage in April resulted in our highest production month in June. We understand there is more work to be done, but we have taken significant steps forward.”

In the meantime, PureCycle says it is continuing to pursue higher throughput by purchasing feedstock low in CP2 and sorting feedstocks for higher quality material. The company already has installed one optical flake sorting line that helps reduce the CP2 in the feed. PureCycle expects to have an additional larger flake sorting line installed by the end of September, and the combined output of the two lines is expected to be more than 4 million pounds per month.

Additionally, the production during the second quarter has provided PureCycle’s commercial team with the opportunity to introduce its recycled resin to more markets, particularly through compounding. By blending PureCycle resin with postindustrial recycled material or virgin polypropylene (P), the company says compounded material provides a more consistent product, should simplify the customer approval process and is expected to increase the ability to bring higher levels of recycled product to the market.

PureCycle is working with several partners that specialize in the development and production of recyclate-based polymers with similar performance properties and consistency to virgin resin. The company will offer multiple PureFive grades to customers that include a blend of PureCycle resin and varying levels of postindustrial recycled material or virgin PP.

“On the commercial front, I’m excited about the work we’ve done with compounding,” Olson says. “This approach should allow us to make a one-pellet solution that customers need for their specific application. We have received the first orders for our compounded PureFive material.”

Financially, PureCycle ended the second quarter with approximately $10.9 million of unrestricted cash. On Aug. 7, the company reached an agreement on the sale of $22.5 million of its Southern Ohio Port Authority revenue bonds that will provide cash proceeds of $18 million.