Polypropylene recycler PureCycle Technologies Inc. said July 29 it will invest $440 million in a manufacturing facility in Augusta, Ga., as it tries to ramp up its production capacity.
The Orlando, Fla.-based company, which uses solvents to recycle PP materials, said the investment will fund three production lines, each with a capacity to reprocess 130 million pounds per year.
The company said the three lines at the Augusta facility would be installed in 2023, and it said it wants to reach 1 billion pounds of production capacity by 2025.
It's the company's second manufacturing site, after a much smaller facility in Ironton, Ohio. The Georgia plant is the company's first planned "cluster" manufacturing site.
PureCycle said it could construct up to five production lines at the site. The $440 million investment will create about 80 jobs, it said.
The firm, which uses technology licensed from Procter & Gamble Co., was criticized in a short-seller stock report in May from Hindenburg Research, which questioned its technology and business plans.
In particular, Hindenburg said its research showed that PureCycle faces "steep competition" for high-quality waste polypropylene materials, and it said the company has not been able to meet its own previously announced timelines for commercial-scale production.
PureCycle rejected the criticism and said it was pushing ahead with plans to open a commercial-scale facility in Ironton by late 2022.
Executives said at the time that cluster manufacturing sites would start to come on stream in 2023 and 2024.
A company representative said July 30 they're evaluating other cluster locations.
"PureCycle is currently in the process of evaluating another cluster location in the U.S. and multiple locations internationally," according to the spokesperson, who was authorized to speak but not be named. "PureCycle is planning on a second cluster facility to be announced in the coming months and additional international locations annually leading up to 2025."
In a July 1 filing to the Securities and Exchange Commission, the company said it wants to have 30 production lines worldwide by 2030 and 50 by 2035, starting in the United States and then in Europe.
The company in May said it lost $30 million in its first quarter as a public company this year, after it started trading on the Nasdaq exchange. But it said it had $570 million in cash reserves.
The firm said it is banking on plans from major consumer product companies to use much more recycled content plastics and drive demand for its materials.
"Demand for high-quality polypropylene is continuing to outpace supply as brands seek sustainable materials for their products," CEO Mike Otworth said in the July 29 announcement.
The company noted in the SEC filing that less than 1 percent of PP in the U.S. is recycled and most of that is done with mechanical processes, which it said generally produces material with limited applications that is not a substitute for virgin polypropylene.
The company said it sees its solvent-based recycling technology as addressing those problems and as a "viable substitute" for virgin PP.
It said that its projected 1 billion pounds of capacity in five years would only be about 0.5 percent of the global PP market. It said PP demand is projected grow 4.3 percent a year for the next five years.