West Sacramento-based materials science company Origin Materials Inc. has announced progress on what it says is the industry’s first fully recyclable plastic bottle cap.
The company’s PET bottle caps, produced by its CapFormer System, passed a Factory Acceptance Test in September, clearing the way for commercial-scale production.
The test took place at one of Origin’s supplier facilities in Europe, where equipment components were assembled to convert virgin and recycled PET into caps using processes like thermoforming, trimming and punching.
“(The test) is exciting because it means all the equipment’s working together the way it’s supposed to,” said John Bissell, the company’s co-CEO and co-founder.
Launched in 2008, Origin (Nasdaq: ORGN) specializes in using renewable biomass like scrap wood to replace petroleum in PET plastic production. Its latest technology, announced earlier this year, allows bottle caps to be made from PET, the same material used in plastic bottles.
Currently, most bottle caps are made from materials like high-density polyethylene or polypropylene, which are rarely recycled in the U.S. These materials are often separated out and burned during the recycling process.
Using PET for both caps and bottles could improve recycling rates, Bissell said, adding that the company’s process creates a closed-loop system by utilizing recycled PET to manufacture the caps.
The fully recyclable caps are expected to debut in the U.S. market first, with production slated for the company’s manufacturing partner, Reed City Group. The injection mold builder is based in Michigan. Its facilities will operate Origin’s CapFormer System and produce caps for the U.S. market, expected to be available in the fourth quarter this year.
The caps will launch in Europe afterward, where the company already has a foothold. Origin plans to produce a fully recyclable and tethered cap there to meet EU requirements for tethering caps to bottles for a more complete circular waste stream.
In August, the company announced a customer contract but has not disclosed details. Its shares jumped nearly 30% after revealing the customer expects to buy $100 million of the product over two years.
“We've gotten lots and lots of positive feedback,” said Bissell, addressing the interest and demand from the market on its PET caps.
Origin, which went public in 2021, has faced financial challenges and turned its focus toward recyclable caps to generate revenue sooner than its other products are likely to. The company last year opened its first commercial PET plant in Canada at a cost of $130 million. Its next plant in Louisiana is expected to take several years to open and will cost more than $1.6 billion. It got a delisting warning from the Nasdaq Stock Market in January and cut 60 jobs last November.
Origin anticipates that its new business of manufacturing recyclable PET caps and closures for beverages could add $45 million to $65 million in annual revenue starting next year.
“Obviously a single line is not enough to bring the entire company to profitability, but we’re excited about the gross margin potential and we think we can scale them quickly,” Bissell said.
In its second-quarter earnings release in August, Origin reported $7.03 million in revenue and a net loss of $19.5 million for the quarter.
Beyond food and beverage packaging, the company sees broader applications for its caps, including potential uses in the medical industry.
