PureCycle Technologies provides Q2 operational update - Recycling Today

2022-09-16 23:16:59 By : Mr. Mr Dai

PureCycle says its Ironton, Ohio, site remains on track, with mechanical completion expected in the fourth quarter of 2022, followed by initial pellet production by year-end.

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." 

The system brings high-temperature hydrogen gas cutting technology to the scrap recycling industry. 

Palm Beach, Florida-based Hydrogen Cutting Systems LLC (HCS), a division of Palm Beach-based Total Combustion, has announced a new proprietary hydrogen torch system.   

According to a news release from the company, the system brings high-temperature hydrogen gas cutting technology to the scrap recycling industry. While leveraging traditional gases such as propane or acetylene as propellants, the system infuses hydrogen. The system reduces emissions, reduces ongoing operating expenses and increases productivity.   

The torch cutting solution is made through proprietary technology that provides hydrogen on-demand. By delivering a continual flow of hydrogen and blending it with the minimum amounts of oxygen and other gases, the system delivers a high-temperature cutting flame.   

The company says the cutting process benefits from the high temperatures in many ways. It immediately combusts particulate matter, reducing emissions and smoke. The burn rate for oxygen and propane or acetylene also is reduced, lowering ongoing operating costs. Finally, the torch is easier to use, which increases productivity for each torchman.   

Developed by scrap industry veterans in combination with top-flight engineers, Hydrogen Cutting Systems is offering the system in a modular, fully portable platform. Each unit can support up to four torchmen, and multiple units may be used at the same job site.   

The system will be unveiled during Scrap Expo 2022, where HCS will be at outdoor booth No. 8. Live demonstrations will be offered. For more information, contact Jacob Youngman or click here.   

The association says the Inflation Reduction Act of 2022 includes taxes that would discourage investment and undermine economic growth.

The National Waste & Recycling Association (NWRA), Arlington, Virginia, joined the U.S. Chamber of Commerce and other associations in a letter to members of Congress urging them to oppose the Inflation Reduction Act of 2022. The bill passed the Senate on Aug. 7 and is awaiting approval by the House of Representatives.   

“We recognize that various provisions of the legislation are being updated,” says NWRA President and CEO Darrell Smith. “NWRA calls upon members of Congress to reject the misguided corporate book minimum tax. Increasing taxes on American job creators during a time of economic uncertainty has historically proven to be a costly mistake for our nation.”  

The legislation’s goal is to reduce the deficit and lower inflation while investing in domestic energy production and lowering health care drug costs. In a statement released earlier this week, President Joseph Biden said the bill would reduce the deficit by more than $300 billion. This includes near-term deficit reduction that would also reduce near-term inflation.   

However, the association says the Inflation Reduction Act of 2022 includes taxes that would discourage investment and undermine economic growth. Additionally, it would have little to no impact on inflation and may increase inflationary pressure in the near term.   

The letter says enacting the proposed tax would be the antithesis of sound tax policy and administration. Its introduction would be neither simple nor administrable and would pose a competitive disadvantage to U.S.-headquartered businesses while increasing the incidence of unrelieved double taxation. It would also have a detrimental effect on the quality of financial reporting.  

Book income reporting standards are set by the Financial Accounting Standards Board (FASB), a nonprofit, private sector organization. The letter states conforming taxable income to the book income standards set by FASB would outsource standards for tax purposes that Congress should be setting. It would also contradict decades of practice in the accounting and auditing fields.  

“This is the absolute wrong time to increase taxes on American job creators or implement price controls on American innovators,” the letter states. “We urge Congress to reject this misguided legislative package.” 

The company also has changed up its leadership team.

IntegriCo, a manufacturer of composite railway crossties and construction matting using recycled plastics, has returned to production after encountering supply chain disruptions related to the COVID-19 pandemic.

Douglas Fox, CEO of the Sarepta, Louisiana, company, says, “When lead times changed overnight from two weeks to 12 weeks for critical raw materials and spares, the decision was made to shut down, perform overhaul maintenance and reassess company strategy until supply change issues were overcome.”

During the hiatus, Fox says IntegriCo invested more than $300,000 to perform maintenance on key production equipment. “This was important to improve the reliability of production and consistency of our product upon restart. Additionally, we retained Fluor Engineering to perform an engineering study, which validated our manufacturing capacity. We are also continuing to work with Fluor’s team to optimize plant expansion plans, increasing capacity and growing our product offerings.” 

IntegriCo’s leadership team also was overhauled during the hiatus, with Fox, former senior vice president at Stella-Jones Corp., a manufacturer of pressure-treated wood products, being named as CEO with a mission to elevate the brand and assemble a solid team to grow IntegriCo’s footprint across the country. He has 40 years of leadership experience in the railway industry and oversees all business operations at IntegriCo.

Rejoining IntegriCo leadership is General Manager Ken Webber. Webber was part of the original IntegriCo team and is responsible for developing the original composite material formula that IntegriCo uses.

“A few years ago, changes were made to the formula to meet a specific customer’s desires,” Fox explains. “While this formula met all the technical/mechanical properties, we realized that the original formula was a better foundation for the technology advancements currently underway.”

Vice President of Sales Scott Moe has been with the company since 2015 and continues to work toward growing IntegriCo’s client base. In his time with the company, he has grown IntegriCo by 500 percent through his acquisition of military, transit agencies and overseas customers, and the launch of alternative products.

Chief Operating Officer Scott Stewart has been with the company since 2020. From 2014 to 2022, he worked as an engineering and operations consultant and held positions such as principal consultant, project management office director and portfolio manager. Stewart previously served as a submarine officer in the U.S. Navy, where he reached the rank of commander. He holds a master’s degree in management from Harvard University with a focus on corporate sustainability and has multiple degrees in mechanical engineering and engineering management.

New to the IntegriCo leadership team is Director of Finance Glenn Jackson, who has served in accounting and management positions for nearly 30 years, including CEO of Valair Aviation and chief financial officer of Aviation General and Dirt Motorsports.

Regarding the leadership changes, Fox says, “The post-COVID environment presents many unique challenges, whether it’s supply chain disruptions, customer impacts, inflation, among others.  As a result, IntegriCo prioritized building a team that could not only navigate these challenges but also lead the company to the next level through product development, regaining foothold as the leading composite tie manufacturer and beyond. 

“We have an experienced team and are turning out a unique and sustainable product,” Fox continues. “With current R&D activities, we will be launching a new product that addresses the concerns of Class 1 railroad engineers with composite ties. We look forward to meeting with industry representatives this fall in the launch of the next generation of composite ties.”

Webber says, “I have always believed in IntegriCo’s proprietary technology and how it could greatly benefit our environment as well as the end user. When Scott Moe approached me about returning, I had a lot of questions. After discussions with Doug Fox and Scott Stewart, it became clear to me that the right management team was now in place to move the company forward with their vison and expertise. I am excited to again be part of the IntegriCo Team and be a part of the effort to resume making a difference utilizing our unique process, innovation and integrity.”

Affiliates of Miami-based investment firm Purchase Capital LLC and the family office of Nicholas J. Singer, the founder and managing member of Purchase Capital, with participation from Acadia Woods Partners LLC, a New York-based investment firm that primarily invests in companies operating in the technology, software and life science sectors recapitalized IntegriCo last year. Fox says,” Purchase Capital LLC and Acadia Woods Partners LLC remain committed to the success of IntegriCo.”

Export demand off the U.S. East Coast is rising; Turkey’s return and Europe’s drought are factors.

Although domestic mill buyers in the United States refused to bid more for ferrous scrap in early August or throughout July, the United States ferrous scrap market has shown a slight rebound at East Coast export yards.

Scrap pricing tracked by Davis Index showed a price rebound on the Atlantic Coast beginning to emerge in July. Of the five Davis Index prices published by Recycling Today for its monthly ferrous market update, the only one that rose in July was for bulk export shipments from New York.

The July average for bulk mixed No. 1 and No. 2 heavy melting steel (HMS) cargoes purchased in New York rose by 1.6 percent in July compared with June. This modest increase was largely spurred by Indian buyers, traders and recyclers say.

After few cargoes were sold from the U.S. to Turkey in July, as August began, many Turkish buyers realized they had “stayed out of the buying arena for far too long, so they need to buy,” one recycler says.

Turkey’s economic and geopolitical circumstances could have dictated that mill buyers look at places other than the U.S. for scrap (including Russia), but alternative markets may simply not have been suitable.

In Europe, a lengthy vacation season and rising truck fuel costs have combined to reduce volumes across the scale in July and August.

Another potential problem in Europe has been emerging in media reports about shipping conditions on the continent. Aug. 8, Greece-based Hellenic Shipping News, regarding conditions in Germany, reports, “Weeks of baking temperatures and scant rainfall this summer have drained the water levels of the Rhine, the country’s commercial artery, causing delays to shipping and pushing freight costs up more than five-fold.”

The shipping publication offers an example pertaining to iron ore that can be just as applicable to ferrous scrap. “Barges like the Servia, a 135-meter (148 yards) vessel carrying iron ore from the port of Rotterdam to German steelmaker Thyssenkrupp’s plant in Duisburg, can only load 30 percent to 40 percent of its capacity or risk running aground,” according to the publication.

It is a circumstance that will make shipping scrap to export terminals in northern Europe increasingly cost-ineffective. With scrap supply choked off in Europe, mill buyers in Turkey and several other nations who may—all things being equal—prefer European scrap may for the time being find themselves scrambling to source scrap from North America.

As of Aug. 11, Davis Index reports a rise in prices for container shipments of HMS and plate and structural (P&S) scrap off the East Coast. “The weekly New York containerized Davis Indexes reversed the slight losses from last week with firm gains as HMS 1&2 increased by $14 per metric ton [and] P&S five-foot climbed by $16 per metric ton.”

Price gains for the same grades were not as noticeable on the Pacific Coast, says the information service, with prices at Los Angeles and San Francisco container export yards rising by only $3 or $4 per metric ton.