Now I'd like to invite Tony back up to introduce our next company. Thanks.
Okay. Got a little excited there before, but now we're honored to have PureCycle with us today. We've got Eric DeNatale, IR of PureCycle Technologies. PureCycle is based in Orlando, specializes in transforming polypropylene plastic into recycled resin. Eric joined in 2025. The company has 180 million shares, trades around $5.35 for a $1 billion market cap and about $200 million of net debt. I think, Eric, are you going to give a brief presentation or go right-
I can give a brief.
Sure. Whatever, yeah. We'll go right into Q. Okay, great. Awesome. Okay. Welcome, Eric.
Yeah. Slides are on here.
I think they're ready to go. Just go green when you're ready.
All right. Well, thanks, Tony, very much for having us. Really appreciate it. I'll run through the slides fairly quickly and just give a brief overview of the company, and then we can dive into Q&A. A little history maybe on PureCycle. Kind of taking a 10,000-foot view, the global plastic landscape, roughly 500 billion pounds globally plastic is produced and consumed. Of that, 200 billion is polypropylene. It is the most used plastic type. Part of the reason why it's the most used plastic type is because of how low density it is. When you think about applications like lightweighting in automotive and other things, there's a lot of value in moving to polypropylene.
Because it's used in so many different use cases, you can think about applications like automotive, things like yogurt cups, coffee lids, the deep draw cold cups that you see at Starbucks and McDonald's, as well as you think all types of caps and closures across consumer goods like Tide bleach bottles and any kind of makeup cap enclosure as well. It's actually what makes it very difficult to recycle. When you look at global recycling rates, if you look at plastics like PET or HDPE, you see much higher recycling rates. Part of that comes down to the uniformity of the feedstock that you're collecting. When you think about PET, you have something like a standard water bottle. You collect lots of water bottles, you can sort and wash clear water bottles.
You can get roughly the same product type, and you can't reuse it infinitely, but at least you can reuse it with a similar product quality. HDPE is similar. It's kind of, I think, milk jugs instead of water bottles. The problem with polypropylene, as I kind of initially discussed, because it's used in so many applications, when you collect polypropylene, you're left with a really, really diverse feed stream, and you can't really mechanically recycle it into a high-quality product. With that as kind of the backdrop by which Procter & Gamble started looking into the problem of polypropylene recycling. They're one of the biggest users in the world. Through their R&D lab, they basically created technology that we now call dissolution, which is the backbone for what PureCycle is, and we hold the exclusive license to that in North America.
When we build capacity globally, we'll get that exclusive license globally. The company basically acquired the patents, commercialized the process over the last few years, and then the first commercial plant came online in 2023. Not unlike a lot of technologies, it took some time to get the first commercial scale plant right. Really towards the end of 2024, we ramped up the capacity to much more sustainable and higher rates. We've been improving that since. 2025 was very much a year of qualifying the product across a number of applications. I can get into a little bit later, but we've basically proven at industrial scale that we can make things like coffee lids, we can make things like yogurt cups, we can make automotive bumpers for Volkswagen.
We've made Tide bleach caps for Procter & Gamble, and the list really goes on and on. I would say the most exciting one of those technical achievements is really in the film market. If you think about film, that goes into your Snickers bars and snack wrappers and all that, and it's really the epicenter of the single-use plastic waste. Film has been basically not able to be recycled for a number of technical reasons, and we can get into those in more detail later. Effectively, that was a huge technical achievement for us. On the back of that, we actually added Valerie Mars of the Mars family to our board.
We'll hopefully have more to say about Mars going forward, but I think we do think that that film market, which is about 40 billion pounds globally, is going to be a really big market for us going forward. I think one thing that's unique about us, and this kind of dives into kind of the competitive landscape here, is there's really two different ways to recycle material outside of us. You have the mechanical recyclers, which collect the waste, they sort it, they wash it. You're generally in kind of like the 90%-95% purity. Because of the diversity of the feed stream for polypropylene, you end up downcycling that product.
You can't go sell it for some big premium because you're making kind of a black pellet that can be used in park benches, flower pots, other kind of low-value applications. That has captured some of the market, but it's not kind of the upcycled high-quality part of the market that you really want to target. The other type of recycling that exists is something called chemical recycling. When you think about the ExxonMobils, the LyondellBasell, the Dow Chemicals, all the kind of the generic petrochemical companies around the world, what they have basically done is they've taken a wide swath of processes where they effectively take the waste and melt that at very high temperature and very high heat into some sort of fuel. Depending on the process, you get to a different end result.
Generally speaking, you are getting some bit of the feedstock that goes back into the virgin crackers. This has come under a bit of scrutiny. California's had some lawsuits filed against Exxon and some of the consumer brands for using this, and because you're effectively. It's not a plastic-to-plastic solution. You're taking plastic and turning it into fuel, and then you're putting that fuel back into the crackers to create more plastic. They do something called mass balance, where if 10% of the fuel that you create out of that process goes back into creating polypropylene, what they'll oftentimes do is allocate the full credit associated with recycling the plastic into the 10% that's going to polypropylene. Or if the polyethylene market's better, they'll put it into there.
It's come under a lot of scrutiny, and when you look at some of the regulations that are coming, particularly at the state level, you're seeing this in New Jersey, you're seeing this in Oregon, you're seeing this in California, where they have been rolling out and implementing minimum content for recycled content. They are not allowing chemical recycling as a manner to get there. There's a lot of controversy around that, but what you can see in the picture below, on the screen right here, that's the type of waste we're taking. We wash it, we flake it, we put it under a machine, and then on the after picture, that's just pellets that are basically identical to virgin material. That is a big selling point when we talk about going to market.
I think the last point I'd make here is what we've seen in the market is these third-party credits. They're called ISCC PLUS credits. They're not really publicly traded, but they are sold between the converters. We've seen them selling in the range of about $0.75 per pound. When we think about our commercial discussions with branded customers, the starting point is usually the price of virgin plus that $0.75, which gets us a nice premium that can allow us to make a really good margin on this product. As I mentioned before, we're born out of Procter & Gamble. They're a big customer of ours. We've also announced, as far back as the IPO, that L'Oréal is a customer for the plant. Churchill has been a really exciting customer for ours because it's actually allowing some nice earned media as well.
We've made stadium cups that are made of 100% recycled material. We had a partnership with the Cleveland Browns last year, and we more recently had these cups at the National Championship game, where we were selling all the cups in the stadium, which was great. I think leading into the regulatory front, to be fair, one headwind we have had over the last year is that we've been in discussions with the state of New Jersey about some of the rollout of the recycled content ban. In the bill as it was written, they made it explicitly clear that plastic-to-plastic recycling would count as recycled content, but chemical would not. Because there was a lot of new entrants into the sustainability field over the last 5-10 years, there was a lot of debate and noise around nomenclature.
When the DEP in New Jersey started implementing this law, they kind of miscategorized us as a chemical process, not as a physical process. We've been in the process of educating the DEP in terms of showing them that our process is plastic to plastic. I think that process is going well and we can dive into more if you have questions there. This slide basically points to as this has matured and people have come to terms with what everything is, a lot of different organizations are backing us up and telling us that dissolution is a physical process, not a chemical process. If you come visit us at our plant in Ohio, you'll see very clearly that plastic goes in and plastic goes out, and it's very straightforward and very simple from that perspective. This is our sorting facility in Denver, PA.
When we first came public, the original plan was, well, we have this great technology around purification. We're just going to buy feed, we're going to purify it, and then we're going to sell pellets. When we started going to market, I think you realize the reality of the landscape is a bit more complex. We vertically integrated into sorting on the back end, and then we can get into it later on compounding on the front end. What Denver basically allows us to do is to buy a diverse amount of waste and with different qualities and different polypropylene contents, and then we can ship it all to our central hub there in Denver, Pennsylvania. We sort it in a mechanical process that upscales the bale to a 90%-95% purity. It also saves on shipping because you never want to be shipping yield loss.
If you create a central hub, collect waste, upscale it to 90%, 95%, you can then ship it to Ironton at a more efficient rate. You get a very uniform stream of feed going into the facility, which just helps with reliability and everything else. If anyone's ever in Denver, Pennsylvania, feel free to come visit. It's a pretty cool facility. This is the Ironton Complex. It's in Ohio, and nameplate capacity is 107 million pounds per year. It's in commercial production, and we haven't reported this quarter yet, but I think last quarter, we did over 7.5 million pounds of pellets in the quarter. We feel comfortable producing at a higher rate than that. We're just matching production with the commercial ramp, which we expect to accelerate over the course of 2026.
I talked a little bit about this already, but this is just showing the broader process of, in terms of our pre-processing, we flake it. You can see that on slide 3 there. That's what the plastic looks like when it goes into the machine. There's the dissolution processes, those core towers you see in number 4, and the pellets are what you see coming out in this visual 5 right there. As I mentioned before, we've fully vertically integrated the compounding. One of the things that's unique about polypropylene is even though it's a commodity petrochemical, you have hundreds and hundreds of different grades for different applications. What we collect in terms of the feed, the mechanical properties of that feed are going to be consistent with what comes out of our Ironton purification line.
One of the metrics we talk about a lot, and it's a really important metric, is something called the melt flow. It's really a measure of how viscous the material is. If you think about something like film, like snack wrappers, you need a very, very viscous material. You'll have a melt flow that might be a 2 or a 3. The reason for that is you need to be able to stretch the material really, really wide, really, really thin. But if you think about something like fiber and some of the other applications, you need it to be quite the opposite. You need to be able to fluff up and all that kind of stuff. You have to have different melt flows.
What we get out of the Ironton facility is going to be a broad average of what post-consumer waste looks like, and that's generally kind of in that 12-15 range. We can sell a 12-15 that's 100% our material. What we've also done now, kind of related to a lot of conversations we've had with customers, is we've added our compounding units. We have third-party compounding, and we're actually just finishing up our own on-site compounding. We'll have about 150 million pounds of on-site compounding in fairly short order. We can actually take the pellets that come out of our Ironton facility, compounding them with different additives and other virgin materials, and basically blend it into exactly the grade that the customer needs. It becomes a drop-in replacement for them.
When you're talking to a Procter & Gamble, they can then ship product to their converter, whether that be an Amcor or a Novolex or whoever, and they can drop our pellet in as a single-pellet solution that doesn't have to change anything in their process to make exactly what they want. That has brought us closer to the end customer. I think what you see, not surprisingly, is when you sell to the brands, you get much better pricing, you get much better margins than when you just sell into broader distribution. Getting closer to the brands is allowing us to price better, and I think that's going to be a big positive for us going forward. We got a few different certifications. GreenCircle is one of them. It's a third-party certification that we have PCR, kind of fully post-consumer waste content.
We also have APR, which is the Association of Plastic Recyclers. These are just a few of the products that we have proven we can make. You can see up top, flexible packaging is film. You can see tape we've made. We've made candy wrappers and snack bars. Thermoform, you can see pens and yogurt cups and the like. The Churchill stadium cups are an injection-molded product, as are those Tide bleach caps you can see in the middle. Fiber we've made as well, which is also a really difficult application. We can make all sorts of apparel and carpentry and all the rest. This is some of the fiber right here. This is just pictures of the product we actually made. We can scroll through this real quick.
The bigger thing is that, so 2026 is really a year of kind of fully selling out Ironton, I would say. We've generated revenue for the last few quarters. We expect that to ramp every quarter this year with a pretty material ramp as we get into the middle part of the year. I think that with that kind of in the back of mind, we've kind of shifted a bit towards growth. We raised $300 million last June through a preferred security, and a lot of that money, plus some of the project financing work we're working on right now, will allow us to grow first in Rayong, Thailand, and then secondly after that in Antwerp.
The Thailand project is a really exciting one that will come online first, call it end of 2027, it'll be mechanically complete, and the Antwerp project should be a year later. That's really it. I would say the last thing, point I'd make is I think when we really look at the bigger picture here in the five-year view, it's really about driving down the cost of our production and then kind of being able to sell all these different applications globally. One of the things that really excites us is the fact that our process requires 80% less energy than virgin production on average. When you think about the biggest cost of running a facility like this, it's really energy. 107 million pounds for Ironton is a decent-sized facility, but it's really subscale versus world-class petrochemical facilities.
In the last quarter, we announced we had finished the initial design work on our Gen 2 design. We suspect that that will allow us to build to about a 500 million pound capacity, which really drives the cost way down. What we've told people is the Ironton fixed and variable cash cost is somewhere in the range of $0.35, and that feed all in between yield loss and shipping of the feed is somewhere in that $0.15-$0.20. You're talking somewhere in that $0.50-$0.60 range is our total cash cost for running Ironton.
When you think about a Gen 2 design, rough numbers, if you take that $0.35, if you split that in two, half fixed, half variable, the fixed cost is really labor, and we have about 75 employees at the Ironton facility to run all the shifts. You shouldn't need much more than that to run a 500 million pound line. You can think about that fixed component of our cost structure at Ironton getting cut by a factor of five for the Gen 2 design. Then the variable doesn't get cut to quite that extent, but you do scale things like you do in any other kind of petrochemical facility. Rough numbers say that could get cut roughly in half.
When we look at kind of towards the end of the decade, we think that we can be the lowest, if not one of the lowest, producers of polypropylene in the world, which I think sets us up really well. At the same time, even though ESG is less in favor than it probably was a number of years ago, you're still seeing a lot of momentum at the state level. California's really the big one. It's over 10% of the U.S. population. They're rolling out SB 54, which is their first plastic minimum content law, in 2027, so that should be a tailwind for us. A number of other states are following. Then Europe, they have something called PPWR, which is coming in towards the end of the decade. There's also automotive regulation coming for both Europe and Japan.
Despite the pushback on ESG, there is a lot of momentum in the plastic space, and so I think this is a critical year for us. We need to ramp the facility from a commercial perspective. I think we have a lot of confidence that's coming, and that should set us up really well for growth into the end of the decade and beyond. Yeah.
That's a great overview. There's a lot.
Kind of a lot.
That's impressive. Yeah, feel free to take a seat if you want or
Yeah, that's all good.
However you want. Yeah. Maybe just start with the Ironton facility since it's your center stage right now. I've heard you discuss the 60% utilization gap. What are the primary mechanical bottlenecks preventing it going to 100% of utilization today?
Yeah, no, that's a good question. I think we noted last year, if you think about what nameplate is from a feed-in perspective, it's kind of somewhere between that 14,000-14,500 range. We told the market that last year we ran some rate tests at 12,500 as well as 14,000 pounds an hour. We've basically run tests approaching nameplate capacity for Ironton. During those tests, you get a lot of really good data, and I think what we've seen is that, and we've seen this kind of for the last couple of years as we've been scaling the facility, is that when you go from a feedstock evaluation unit, which was doing kind of call it 5-10 pounds an hour to something that's 1,500x larger, there's a lot of assumptions you make about scale up. Some things are under-scaled, some things are over-scaled.
We've seen that time and time again. When we ran these rate tests, we saw that there were some components where as you run for an extended period of time, you start to see a little bit of degradation, right? As we, and we can probably get into it, but we're taking an annual maintenance outage coming up that's I think starting next week, actually, and that should last kind of call it 4-6 weeks. As part of that outage, we're going to put some process improvements in place. Two examples we give is there's a pump in the middle of the facility that's just subscale. It's a standard piece of industrial equipment. It's nothing crazy in terms of a tech perspective, but when we run at the highest rates, you just see a little degradation in that pump.
We're putting in a larger pump. We're also adding a little bit of heat exchanger capacity, kind of similar dynamic there. There's nothing about the core technology that needs to be changed to kind of move to the upper limits of the facility. I think these are just kind of standard improvements to come with knowing the facility better and knowing how to operate it better.
Yeah. I guess along with that, you talked about this outage coming next week, I guess. With these different pumps or heat exchangers, does that change, I mean, scale, I guess not, but does it change the cost structure of, like, you're talking about the economics of the facility at scale or at rate? Will that change that or?
No, not really. I mean, I think the economics we see on Ironton should be unchanged as we kind of go to the side. It's just the ability to run at a higher rate.
Yeah. You talked about reliability, and five years ago, you didn't have that sort of reliability expertise for this equipment. Maybe you could talk about how the team, what they've done, what sort of.
Yeah
the changes and evolution of this business and process that you guys have been able to minimize downtime and all that.
Yeah. I mean, I would say it's less about the team. I mean, the team's been there, a lot of the team's been there since the beginning, and they've all matured and grown and now become experts in this technology, and this is first of its kind technology. Some of the other plastics types are actually starting to look into dissolution, whether it be PET or other types like that. We're the first to market in doing anything with dissolution, so there's really no one that knows how to do this, and we've been learning along the way, and a lot of new technologies take a very long time to bring to scale. I think even though it's taken longer than we would've wanted to, it's probably ahead of industry standards, so a lot to be proud of there.
I mean, Dustin, our CEO, uses the analogy a lot that when you first turn on the plant, it's like walking into a house with all the lights on that you've never been in before, and you're kind of stumbling around trying to figure out where the light switch is. Eventually you find it, and you turn the light switch off, and now you understand the home. I think it's a good analogy for how tricky it was to run a brand-new technology at scale for the first time, and I think the whole team from the C-suite down to the line worker have done a really tremendous job just learning the process and getting better every day.
Yeah. That's interesting. You sort of talked about feedstock variability a little bit in your comments. Recycling obviously is a dynamic market. How has the actual composition of feedstocks you received at Ironton differed from your original design assumptions?
Yeah.
Has there been a big change from what you were?
I mean, certainly I would say less so over the last couple of years, but certainly from 5 years ago when we first put this into place. I mean, I think there was probably a naive view 5, 7 years ago that you could just source as much feedstock at 90% purity as you wanted to. The reality is more complex than that, and I think we've done a good job adapting to the market. I think putting Denver in place has really helped us with the flexibility in terms of the feed we buy. We can buy feed that is 90, 95%. If you look at some of those raffia bags that you get off of farms, that's like 99% purity. We can take that. You can also take a mixed bale that's 50% polypropylene.
The Denver facility has really allowed us a lot more flexibility, and so we feel really good with the feedstock that we are able to procure for Ironton and just the ability to kind of sustainably ramp that. Yeah, and I think the last point I'd make there is the cost structure. We've actually done a really good job on cost, and I think it's hard for the market to see until we really ramp and show the-
Right
the EBITDA. We had talked prior to announcing the Denver facility about kind of a cash cost run rate for both Ironton and corporate being about $8 million a month, so call it $24 million a quarter. With the addition of Denver, the last two quarters, we come in about $25 million for the quarter. Even with an addition of a pretty decent sized sorting facility, we're, from a cost perspective, still really in the same place.
Yeah. That's great. Any questions from the audience? There we go. Wait for someone to come over. Oh, I'm sorry. We'll go here first. Sorry.
It's all right. Thank you for a good presentation. I am curious about looking at the running belt with all of that waste. That waste doesn't look uniform. In other words, you have some polyethylene, some polypropylene, and God knows what else, right? Don't you need to separate the different categories of plastic going in in order to get a pure plastic going out for certain application, or do you come out with this mix of molecules?
Good question, and it's a good way to lead into more about the core technology itself. What we do with Denver is we take a wide variety of feedstocks that could be 90% purity, 50% purity, frankly, even 10% purity if we wanted to, and we mechanically recycle it to a 90%-95% polypropylene. I would say the majority of what is left over is polyethylene, although there's also odor and color and additives and things like that. That goes into our purification line. What our purification. The best analogy for it is it's really, we call it a molecular washing machine. It's basically dissolution, it's because it dissolves the plastic. It selectively dissolves polypropylene.
An example is if I were to take a cup of water and I had salt and pepper in one hand and I wanted to sort the salt and pepper. I could put it in the water, mix it up, the salt dissolves, the peppers stay solid. I filter it through a coffee filter. I then have salty water. I boil off the water, and I'm left with pure salt. Effectively, that's what our process does for polypropylene. The secret sauce is really in how do you create those exact conditions between the solvent, the pressure, and the temperature, and the supercritical conditions we put the material under to extract only the polypropylene. That's what the technology is able to do.
What we end up doing is we dissolve into a solvent, we separate it, we filter it out effectively, and then we basically boil off the solvent, which we continually reuse through the facility, and then you're left with a pure polypropylene that is, on a bad day, even still north of 99% purity. It's a pretty cool technology.
Yeah, which means that then Well, the pellets you are selling to manufacture additional bottles and boxes and whatever can be recycled again and again, or does it lose their recyclability?
That's a great question because I think you see that time and time again where there's a number of. We were talking to a sports team the other day, and they have some reuse of the plastic cups in there.
Yeah.
You can only reuse them 100 times or something like that, because every time you do it kind of degrades the plastic. Not to get too technical, but a lot of that degradation is really the polypropylene molecule starts to break down a little bit. Actually, as part of our process, those kind of damaged polypropylene molecules actually come out. We're very proud of the fact that we don't have yield loss in the process, but technically, there's kind of like that, call it 1% yield loss, which is actually the damaged polypropylene getting removed. To close the loop on this, there's really two co-product streams that come off the facility. One of them is called co-product one, which is really this smelly, waxy. It's all the odors, it's all the additives.
All the additives.
Everything that's not polyethylene, basically, is in that PP-1, or sorry, CP-1. Then the majority of what comes off is CP-2, which is basically a dark, kind of greenish-black polyethylene. We can actually sell both of those in the market.
Park benches, for example.
Yeah. One example that we use for CP-2 is it's basically a wide-spec polyethylene, so we can sell to companies that make those big industrial drainage pipes and things like that. It's a good net back in terms of being able to sell everything we produce, not just the end polypropylene.
Thank you.
Question over there.
Thank you. Just a short question. Why Augusta?
Yeah. We've had a long-standing relationship with the AEDA in Augusta, so a good site development with some good tax benefits and all that. But I think the interesting question is, so the original plan was ramp Ironton and then go to Augusta and build on a much, much larger site. It's also, by the way. The electricity costs in Georgia are lower than they are in Ohio. The labor costs are lower, too. From a North America perspective, there's a lot of benefit in moving there. I think what we saw is that the Ironton's 107 million pounds. The next lines we're going to build, the next two lines are 130-million-pound lines, and then we're going to go to the much larger 500-million-pound lines.
What we saw is that there is a lot of CapEx inefficiency from building on a greenfield basis because you have to build out all the utilities, all the roads, all the fire water, the steam, et cetera, et cetera. That's very costly. It can be half, if not more than half of the total CapEx required to build out a site. What we did when we did the capital raise last summer is we actually pivoted towards moving those first two lines to Thailand and to Antwerp. The site in Thailand is a really good example of that. It's a fully integrated petrochemical site with IRPC, which is a subsidiary of PTT. Actually, the former chairman of IRPC, this guy, Dr. Siri, he joined our board last year after the announcement of that facility.
We have some really good support in Thailand, but the CapEx efficiency there is so much better. Whereas for Ironton, first site's always the least capital efficient, but it cost us about $360 million, $365 million to build a 107-million-pound site. We're going to be able to build a 130-million-pound site in Thailand for, call it 250-ish. It's tremendously more capital efficient. I think the view is if we were going to build a greenfield site like you'd have to do in Augusta, it makes much more sense to build at a much larger scale where you can spread that fixed cost associated with all the greenfield development across a much larger capacity.
A lot of good golf there, too, as well.
There is some good golf going on right now.
Maybe an opportunity to partner with Augusta National, make the cups. I don't know.
Yeah.
Well, it's been a wonderful overview of this company. I think you have a lot of interesting things coming your way. Thank you, Eric, for taking the time today, and hopefully get you back next year.
Yeah, absolutely.
Well done.
This is a really pivotal year for us.
Yeah
Going from an early stage, more speculative story to a real company, we got a lot of stuff in front of us. Thanks for having me.
Yeah. Great job. Well done. Thank you so much.
All right, thank you.
Good job.
Yeah. Very much.
Yeah.
Yeah, for sure. Yeah.
Okay, now I'd like to introduce my colleague, Michael Virgilio, for our next company.