Origin Materials, a technology company with a mission to enable the world’s transition to sustainable materials, today announced an organizational realignment that reflects the reallocation of resources to its caps and closures business and reduces overall cash burn to accelerate Origin’s timeline to profitability.

“As near-term demand for Origin’s PET caps continues to increase, potentially exceeding our currently planned manufacturing capacity for 2025 and 2026, we are proactively reallocating resources to our caps and closures business,” said John Bissell, Co-Founder and Co-CEO of Origin Materials. “Our first caps customer has signed an MOU for billions of caps, totaling over $100 million over an initial two-year term. Today, we are positioned to bring the world's first PET cap solution to a $65 billion market with attractive margins.”

Bissell added: “Consistent with this reallocation of resources, 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. 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 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. As we establish a strong economic foundation through our PET caps and closures business, we expect to be ideally situated to drive deals regarding Origin’s biomass technology and furanics platform.”

Origin expects the workforce changes to be largely completed by the end of this quarter. The Company anticipates that it will incur approximately $0.6 million in restructuring charges in connection with the roughly 28% workforce reduction, consisting of cash expenditures of approximately $0.5 million and non-cash expenses of approximately $0.1 million.

Origin 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. In addition, 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 added: “Today we foresee rapid near-term growth in the caps and closures market, where we offer a powerful solution for product performance and recycling circularity. At the same time, we remain confident in the long-term potential for building additional businesses based on Origin’s biomass conversion technology – all in support of maximizing value for our shareholders and our mission to enable the world’s transition to sustainable materials.”