Origin Materials is slashing its workforce and reorganizing its business model in an effort to save money and reallocate resources to its caps and closures business.
Co-Founder and Co-CEO John Bissell has announced changes at the Sarnia site, located within the ARLANXEO site at 1265 Vidal Street South, to help accelerate Origin's timeline.
"We have made the decision to operate Origin 1, our biomass conversion plant in Sarnia, Ontario, ‘on demand’ with reduced staffing, while preserving our ability to generate product at small volumes sufficient to explore scale-up with strategic partners," Bissell said in a news release.
"The product already generated at Origin 1 over multiple campaigns, as well as materials Origin may purchase from third-party suppliers, can enable us to advance scale-up while allowing us to reduce our current overall cash burn. This decision, plus the reduction of certain expenses related to longer-term R&D (research and development) projects, has necessitated a reorganization of our leadership team, as well as the difficult decision to part ways with many talented team members, to whom we are deeply appreciative, and who we will do our best to support in their future endeavors."
Bissell said they'll shift focus to the near-term demand for Origin’s PET caps -- which the company claims is the world's first tethered polyethylene terephthalate (PET) -- which continues to increase and will potentially exceed their planned manufacturing capacity for 2025 and 2026.
The tethered caps are designed to stay connected to a container, improving cap collection rates for recycling.
“Our first caps customer has signed an MOU (memorandum of understanding) for billions of caps, totaling over $100 million over an initial two-year term," Bissell said. "Today, we are positioned to bring the world's first PET cap solution to a $65 billion market with attractive margins.”
The changes, including the roughly 28 per cent workforce reduction, are expected to be largely completed by the end of this quarter.
The California-based company said it is maintaining its financial guidance for 2024 revenue and net cash burn, with revenue of $25 million to $35 million and net cash burn between $55 million and $65 million.
Origin’s first commercial-scale PET cap 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.
Origin Materials Co-CEO Rich Riley said they remain confident in the long-term potential for building additional businesses based on Origin’s biomass conversion technology.
Origin Materials celebrated the start-up of Origin 1, the world’s first commercial CMF [chloromethyl furfural] plant, with a ribbon cutting ceremony last July, after the plant officially started-up at the end of June.