PureCycle Technologies provides Q2 operational update

PureCycle Technologies Inc., Orlando, Florida, has released a corporate update on operations and company expansions for the second quarter ending June 30.  

"PureCycle continued to build on its operational momentum during the second quarter of 2022 and execute against its strategic growth plan,” says Dustin Olson, PureCycle CEO. “PureCycle aims to mitigate its environmental footprint through proactive evaluation of operational impacts from preprocessing through pellet production. We look forward to updating the market with a more in-depth evaluation once our Ironton facility becomes fully operational."  

PureCycle says its flagship purification facility in Ironton, Ohio, remains on track with mechanical completion expected in the fourth quarter of 2022, followed by initial pellet production by year-end. The company is in the final phases of construction with 14 of the 26 modules delivered and lifted into place. Additionally, the company is nearing completion of its feed preprocessing build and full commissioning is underway. The Ironton purification facility will have an annual capacity of 107 million pounds annually of ultrapure recycled resin.  

“The operational startup of our flagship facility in Ironton remains on track and marks a significant milestone in PureCycle's commercial path to addressing the global plastic waste crisis.,” Olson says.   

During the second quarter, the company's engineering, procurement and construction activities at its first multiline purification facility in Augusta, Georgia, continued to progress. In light of the current economic climate, projections anticipate mechanical completion, startup and full commissioning in 2024. The PureCycle team is integrating lessons learned and improvements from the Ironton construction into the Augusta development, which is expected to improve installation efficiency.  

PureCycle says it will receive an agency opinion letter for the use of food-grade postindustrial recycled materials for all food types under Conditions of Use A-H. It also received a letter of no objection (LNO) for all food types under Conditions of Use E-G for food-grade postconsumer recycled feedstock. The company says it plans for additional testing and intends to make further LNO submissions for additional postconsumer recycled sources and expanded conditions of use.  

The company recently announced three leadership changes effective Aug. 5. Mike Otworth, chairperson of the board of directors and CEO of PureCycle, resigned. Dustin Olson, PureCycle chief officer and chief manufacturing officer, was promoted to the role of CEO and joined the company's board of directors. Olson has been with PureCycle since 2021, leading technical, manufacturing and project operations. Dan Coombs, a current member of PureCycle's board of directors, was appointed to the newly created position of executive chairperson of the board of directors.  

PureCycle says it continues to advance its feedstock procurement pipeline, with about 329 million pounds of polypropylene under a letter of intent, to fully supply the first two lines of PureCycle's Augusta purification facility. PureCycle says its current feedstock supply pipeline is made of three waste streams: postconsumer noncurbside, postconsumer curbside and postindustrial. During the second quarter, PureCycle's PureZero program expanded its recycling partnerships to include the Jacksonville Jaguars. PureCycle is also continuing with an expanded list of targets outside of stadium venues to advance PureZero concepts.  

Augusta's purification lines one and two are currently at 70 percent, allocated through multiyear offtake contractual agreements and commitments, with volume from packaging converters. PureCycle says it continues to progress on negotiations for the remaining 30 percent of available offtake. The company says the market's continuing interest in its UPR resin is demonstrated through the offtake allocation of the Ironton facility and the acceptance of its Feedstock+ pricing model being implemented at Augusta.  

The company says it continues to develop three regional feedstock preprocessing facilities along the East Coast. The aim is to enhance feedstock supply for the Augusta multiline purification facility and maximize transportation efficiencies. PureCycle anticipates its first regional preprocessing facility in central Florida to be operational during the fourth quarter of 2022, with an annual sorting capacity of 115 million pounds of mixed plastic.   

During the second quarter, PureCycle selected two new locations to supply the Augusta multiline purification facility: Denver, Pennsylvania. The facility will also be supplied on-site. Additionally, the company says it anticipates preprocessing facilities in Denver, Pennsylvania and Augusta to be operational in the second half of 2023. The Denver, Pennsylvania preprocessing facility is expected to have a sorting capacity of 175 million pounds annually. The Augusta preprocessing facility is expected to have a sorting capacity of 263 million pounds and a wash capacity of 331 million pounds annually.  

As of June 30, the company is reporting total liquidity of $516.4 million, including $349.8 million of cash, cash equivalents and debt securities available for sale and $166.6 million in restricted cash. PureCycle had $249.6 million in debt and accrued interest, less than $16.6 million of discount and issuance costs. PureCycle's Ironton flagship purification facility's budget estimate is about $300 million, primarily funded through bond financing.  

"We are pleased that project debt financing is expected to be completed by the fourth quarter of 2022,” says Larry Somma, PureCycle's chief financial officer. “Upon the anticipated closing of this transaction, we expect to have sufficient capital to fund Augusta's first two purification lines and three East Coast preprocessing facilities."