In the spirit of the title of the Materials of the Future Conference, next up we have PureCycle Technologies, ticker PCT, which, out of the dozens of innovative recycling technologies that have crossed my desk over the years, has a thesis that appears to be playing out according to plan. Had a very interesting press release, which I'm sure we're going to discuss as well today. They had a big announcement yesterday and a pretty big stock move as well, which I think is on people's radar screens. With that, I'm very thrilled to kick off the day with the CEO, Dustin Olson, and I think we'll dive into everything from there.
Sorry, I'm mic guy. It's a lot easier. I felt like I was on a spaceship all day yesterday, so I'm switching it up today. Dustin, first of all, thank you very much for attending. We've had the pleasure of, hopefully mutual pleasure, of having a few discussions over the last month or two. The first thing I wanted to hit on, in the world of basic materials, and we don't want to get into names quite yet, there have been several theses across the space about different technologies: molecular, mechanical, just you name it. Once again, we can get into how it's different. Could we perhaps just begin by saying what's different about PureCycle? Before we even get into yesterday's announcement, what are you doing? How is it better? Perhaps just a quick comment on how you're scaling.
Yeah, I think when you look at technology in general, you have to look at the core fundamentals, and then you have to see, especially in this space, which is the most efficient. If you look across the space, you've got mechanical, you've got chemical, and you've got an array of other types of recycling. I would call ours is called dissolution technology. There's a really nice graphic by the Nova Institute that explains all of them. To talk about ours to start, I mean, ours is a high yield, high quality, low carbon footprint. Low carbon footprint also means lower cost. We've got kind of the three legs of the stool that really matter. When you look across some of the other technologies, they're gapping somewhere. You've got some quality concerns with mechanical.
It's getting much better, and there are some really good applications of mechanical, but at its core, it's going to have a quality delta. When you look at chemical recycling, the yield is really low, actually. I mean, the yield for chemical recycling for pyrolysis and other technologies is like 10-20%, plastic to plastic. Then if you look at the core delta on efficiency, PureCycle is really like a molecular washing machine. We're taking the molecule that's a lot of effort, a lot of money, a lot of costs has been put into building this molecule. It's a very stable molecule, which is great because it should lend itself to being recycled much easier. What we do is we wash the molecule. We wash through the plastic.
We take the color out, the odor out, the contaminants out, the additives out, and we leave back the original polymer. Some of the other technologies just do not do that. They catalytically change it. They break it down with heat. All of those technologies are higher carbon footprint and more expensive. I think that where we really are going to differentiate ourselves in the future is the simplicity of what we are doing. It is a very complex scientific thing that we are learning how to distill into efficiency. The core process that we run is a net lower energy footprint than the rest. I think that is going to really give us the opportunity and legs to grow long term.
We talk a little bit more every time I meet you, which has been fantastic. You're more enthusiastic than two weeks ago, than four weeks ago, than six weeks ago, than three or four months ago. You've had a lot of progress even over the last six months. Can we talk about your scaling, given your existing footprint, how you feel about your progress, run cycles, kind of days on time? It just seems like everything's kind of edging in the right direction. If we could hit on that enthusiasm, that'd be helpful.
Yeah. I mean, look, we're really excited with where we are. I mean, we got out with our technology just before COVID hit. We built our plant during COVID. We struggled through all of that. A new technology is like walking around a dark room and trying to find the light switch. You don't really know what you're going to bump into, and you stub your toe and you bang your knee and you trip a few times to get going. Eventually, you find the light switch and it's like, oh, I know how to navigate this room now. As we've been scaling our technology, we've been going room by room by room to really understand what we need to do. We've gotten to the point now where we've got the house pretty well lit. That's really opening up our opportunity to grow.
We've always known we have a strong technology. We had to prove it at scale. We're doing that at Ironton. We knew it were a manufacturing facility, so we've got to get the reliability and the uptime there. We're doing that. Just recently, we hit approximately 90% uptime for a couple of months in a row. We produce pellets for 65 days in a row. For a long time, manufacturing folks, they'll be like, well, that should be table stakes. For a new technology, reaching milestones like that is really transformative. We're starting to do that. We're at a place now where we know the tech works. We're gaining a lot of progress with customer trials, and we know a lot of people want the technology. When we talk to customers in the space, they're not getting the quality that they need.
They're not getting the volume that they need. They've got all these mandates coming at them. They need somebody to step up and give them the solution. I think with our announcement yesterday and with our definitive growth plan that we've just recently announced, I think it's going to give customers a lot of excitement. They know the technology works. They know the product is differentially better. Now they know they're going to have the volume. I think we're going to accelerate even further as we get into this.
Yeah, the way I've always thought about it is make sure the technology works, step one. Step two, reliability. Step three, scaling. On the scaling side of it, you do have some public potential partners. Could you talk about how those relationships have been built over time? Any color you perhaps could be willing to share about where you stand today and how you think about the tangible, addressable market growing over the next few years and how your existing customers are going to play into that, as well as potentially some new customers as well?
Yeah. I think that when people get to know PureCycle, they learn about the company. They see the thesis. They learn a little bit about dissolution technology, which is unique and cool. They kind of fall in love, that they like you. When you start talking to customers around the world, we've had good relationships with Mitsui & Co . We've had good relationships with SK. Now we've announced a relationship with IRPC in Thailand. There's a lot of excitement to bring us into new markets. I think that there's a draw for us out of the gate. Everybody wants to see Ironton run, the tech work, the reliability improve. Now that they're seeing that, I'd say that's accelerating. What we've done over the last four years is really we've actually been spending quite a lot on growth.
We have been working hard to get the plant running in Ironton. Spent a lot of money there to get it to this point. But we've also been incrementally spending money to get ready for this moment. We've got a lease in Antwerp, the Port of Antwerp, the NextGen District. It's a great location. We won a competitive bid for that location. We've invested in that. We've continued to work our relationship on a JV basis with Mitsui & Co. in Japan. I believe that Japan is going to be a really strong market for us, heavy in automotive, very strong culture for recycling, good access to the Far East, China, South Korea, everything there. The new one that we just announced yesterday is IRPC. This is a site in Rayong, Thailand. It's a fully integrated facility.
It's refining to olefins, deep cracking technology, all the way through final polypropylene. It's just a superb fit for us. We'll build a facility there. That's actually not going to be a JV. We had contemplated that a bit, but for both parties, this worked out better for us to have 100% ownership in that facility. They've got compounding assets so we can transform our product to whatever the customers need. They've got virgin polypropylene production. We'll have integrated sourcing of virgin polypropylene for compounding right there. They've got infrastructure: roads, fire, water, flares, steam, electricity, all the utilities that you need. It's all right there so we don't have to spend money to do it. One of the really exciting things for us is that this project is really cost competitive.
We're going to spend about $190 million base plus $30 million of contingency, so $220 million all in. When you look at the Capex per pound for a project like that, Ironton was about $3.4 per pound. This project's going to be between $1.4 and $1.7. I think that's going to put us in a really good position to take advantage of that site and deliver some good earnings.
You stole my next two questions on this with the announcement, but your enthusiasm is tangible. Given the announcement yesterday, and you did answer this partially, what makes Antwerp and Thailand the best new locations in terms of targeting your growth? Are there any comparable characteristics versus Ironton and how you're thinking about it? Is it about cost? Is it about the partnership, the feedstock flow? How should we be thinking about that?
I think you have to look at each one of them individually. You have to peel them back separately. If you look at Antwerp, Europe is leading edge when it comes to recycling. There's a lot of desire to do recycling in Europe. Antwerp is right in the center of Europe, very busy port, I think busiest in the world. We've got good in and out access there. Also, we've got quite a lot of infrastructure in Antwerp as well. We will not have to build steam boilers. We will have that access. It's already infrastructure that's in place that we can buy. I think Antwerp is going to be a really good location for local feed-in, local product out to a customer base that's really excited about it.
I think the CapEx per pound is also going to be a bit lower in Antwerp also because we won't have to spend quite as much money on the infrastructure. When you look at Thailand, Thailand's a little different. It's really competitive on the cost front. That's both OpEx and CapEx. If you look at the world in Southeast Asia and you look at the countries in Southeast Asia that have the Venn diagram where the most free trade agreements overlap, it's Thailand. I mean, Thailand is a great import-export location, a lot of friendly relationships with everybody around. We will have a good site there to move our product in and move our product out. We view Thailand as an opportunity to really grow into. It's got the capacity to build billions and billions of pounds.
I think that when you think about the overall plastic problem that we have in the world, a lot of that generates in Southeast Asia. A lot of money, the Alliance to End Plastic Waste and other entities are really doing a lot of work to control and improve the overall waste collection of this material in that region. I see Southeast Asia as being a great place for feed procurement. Our technology will be right in the middle to help solve the final solution, which is bringing good recycled material into the market again. Thailand, I think CapEx, OpEx, it is in the heart of a significant plastic waste problem. I think it is going to solve, it is going to be a component of solving the problem in that region.
Hopefully you'd agree that scale matters a lot in this business. One is your own scale in terms of Ironton and just getting to the point where you can attract some of the larger customers. Also, when you think about some of the larger conglomerates, the HPC guys, some of whom you've already been partnering with, global scale matters as well in terms of the ability to keep products fairly consistent. I know it's a little early. It's only been 24 hours or so. How do you believe yesterday's announcement is going to play into your ability to basically go after or kind of pitch your process and your product to some of the larger global HPC guys? Is that more regional in basis where it doesn't really matter? Is that just like, hey, we're able to use this technology, it's on a global basis?
We can help you here, here, and here instead of just Ironton. Is there any thought process there you'd like to give us?
I mean, you hit on a really important point. When you talk to global brands, they're not looking for they're looking for solutions, period. If they can find regional solutions, it's fine. What they do right now is they provide global solutions to their overall supply chain. The problem with recycling is that each feed leads to a different product quality. Each region has different feeds. And then, companies really haven't grown to a point where they have a global footprint. With our technology, it's a molecular washing machine. We wash it at the molecular level. By doing that, we create a consistent product region to region to region. That is very appealing to global customers.And then, o n top of that, we're going to have production on every major area in the world.
We are finding a lot of traction with well-known global brands where we say, hey, look, we've got a product that we can deliver to you in the U.S., Europe, and Asia. Oh, by the way, it's really high quality. Oh, by the way, we have tested it across film and fiber and rigids and thermoforming and all these different applications. What do you need? We can probably make it. Where do you need it? We'll probably have it. I think that that is music to big brands' ears. At the end of the day, they want to do the right thing. They're trying to find solutions to meet the growing consumer interest and consumer demand, but there's just not enough supply out there. I think our announcement yesterday was really important.
I mean, it was a significant capital raise with some A-list type investors, a lot of long-only participants in our company for a long time, also some new people that are coming in. This is not your traditional convert. This is a long-only supported convert. I think that's positive. What's really compelling about this raise is it leads to a legitimate growth plan with real volume behind it that's going to be sellable to customers. I think our ability to gain greater attention from some of the real big players in the market has just taken a big step change up. I think the other point to your comment about scale is we're also learning so much about our technology. Again, the light switch story inside the house.
When you design your first plant from 3-5 pounds per hour to 14,000 pounds per hour, there's a lot of unknowns. Like, will it work? Will it scale? Can they run it? All these different things. We put that in the rearview mirror. What we've also done with the technology is that we have learned how to do it more efficiently. Now we know what we can scale. Now we know how to scale. Getting to the Gen- 2 design and all these things that we're going to do in the future to get bigger, we're going to be able to build bigger and bigger facilities, which will bring scale.
I think that the real exciting position for us going forward is as our CapEx per pound starts to come down, as we show that our OpEx per pound is competitive, if not superior to other technologies, including virgin polypropylene production. As this world continues to grow and need more and more and more polypropylene, if you've got a technology that is circular, you've got a technology that is CapEx per pound getting close to equivalency with virgin production, and you've got a technology that is incrementally more OpEx friendly than virgin, I think that this is going to be the technology that people want to lean into. I see this first step in our growth is the first step. Beyond this, I see us really having a trampoline to keep moving forward.
When I hear you speak about this, I go back to 2015. I'm thinking about all the equivalencies of a battery pack eventually reaching the ICE equivalency and the cost and watching it progressively go down over time. Let's hit on that for a little bit because even since the last time you and I spoke, the CapEx and OpEx per pound equations have changed a little bit. It seems like it's edging naturally in a favorable position. Could you just once again, for those in the audience who are more generalists and do not necessarily understand the OpEx, which is obviously in some cases virgin polypropylene going up because it's incredibly expensive right now to build any green or brownfield facilities, where do you think you stand now? How long could that process actually take in terms of your business being at equivalency?
Understanding it could be a longer-term time frame.
Yeah, I think that you look at OpEx, you look at capex. From a CapEx perspective, we're in the middle right now of an engineering effort where we're going to build a GBP 300 million+ type facility. And when we do things like that, we're going to have a sub $2 per pound type CapEx. At least that's our expectation. Is it 300, 400, 500? We don't know yet, but we know that we can do it. We just have to find the right economic efficiency point so that we can bring that to market. When we get to CapEx equivalency, I think that depends on where we put our facilities. You take Thailand, for instance. That is a it depends on if you use the $190 or the $220 with and without contingency, but that's $1.40-$1.70 CapEx per pound. That's getting pretty close.
That's a Gen- 1 design. That's a GBP 130 million design, not a 300. If you take a GBP 300 million design and you put it into a facility like Thailand, again, I think you're getting pretty close. From an OpEx per pound perspective, we do all of these things in the industry where we talk about our life cycle analysis. That's typically done to show your carbon consumption. It's also a good proxy for variable cost. There are two things that have happened to us on variable cost. One is we found that our technology is working actually incrementally better than what we had originally planned. Some major components of our tech we're able to modify to make them more efficient. The second is we use 80% less energy than virgin polypropylene.
If you just forecast that out to what it means on the cost side, it just means that we're going to be extremely competitive with virgin polypropylene on the OpEx side as well. CapEx is dropping. I think making the plants bigger is going to help. Fundamentally, we are not breaking the molecule down to its base components like some of the other technologies. We're just washing it. Why wear a shirt one time and then throw it away? Or break it down into the thread and build the shirt back again? Why not just wash the shirt? This is what we're doing with polypropylene. I think from an OpEx perspective, we're going to look really good there.
If our focus, if we stay laser-focused on CapEx, then I think that this is going to be a story that's going to be very exciting to watch the next 20 years.
I have to ask just in terms of just general thought process. You can answer, obviously, however you choose. Throughout these offices, I mean, people are always talking about the more technology for Lyondell or Eastman. Just broadly speaking, what do you find as far as the advantages of—you already answered this partially, but I really want to dig into it. What makes you unique in terms of that? You hit on it in your first question and actually two questions ago. Just to really hammer this home, I mean, everybody's kind of getting into this. Where do you think the largest points of differentiation are, not just the side stuff?
Yeah. So look, I mean, if you look at chemical recycling in general, there's a couple of ways to do it. You can do a catalytic process, which uses a catalyst to really change the molecule. Or you can use heat. With heat, you just heat it up really hot, and the molecules get excited and they bust apart. Both of those types of technologies land back to an oil-based type feedstock. Pyrolysis will make a pie oil, which then goes to refineries and chemical plants, and they'll turn it into gasoline, kerosene, diesel, and also some plastic. Catalytic-driven process will take it down to an equivalent to pie oil. They'll turn it into gasoline, kerosene, diesel, and plastic. The fundamental difference between us or our technology and those other technologies is that we're not changing the molecule. The molecule comes in.
It's this enormous molecule put together, very stable. All we're doing is washing it. We're doing it in a very clever, scientifically cutting-edge type way, super critical conditions and selective dissolution, all these different things. Really cool stuff. At the end of the day, we're washing the molecule, whereas the other technologies are breaking the molecule. When you break something, you have to build it back. That process of breaking and rebuilding costs time, costs money, costs variable cost. If you're just washing it, it costs less. That's really the fundamental difference between our technology and others. There are some great technologies out there. I don't know a lot about the Eastman technology, but that's a very unique technology where they break it down to its components and build it right back to PET. That's better than taking and breaking it down to crude oil.
There are a lot of nuances between all of the different technologies. I would encourage you to go look at the Nova Institute graphic because it is the best way of trying to understand the deltas between technology. What you'll find is our technology is on the far left. It is right next to mechanical recycling. From a carbon footprint perspective and capability perspective, dissolution technology, I just really believe in dissolution technology because I think from an efficiency perspective, the more you can do to preserve the energy put into building something, the better off you'll be long term.
Dare I say, your role as CEO is evolving. I mean, the first several years were basically getting the facility on track and building it up and scaling it, assessing customer qualifications and kind of which can always be a bit of a moving target. Now you're rolling a good way. Is it moving towards how do I balance my production and selling out the facilities at the same time commensurate with optimizing the return for my shareholders? How are you thinking about ramping to full capacity, selling what you need to sell now and three to six months from now towards the year? Obviously, most of that's for Ironton. How are you kind of assessing that balance?
Is there any way to think about, on a preliminary basis, some premiums which your customers are willing to pay or just willing to assess, broadly speaking, of course?
Yeah, I think a couple of things happened to us with customers. One is we were pitching this product and this company to customers. Almost unilaterally, they love the concept. Then we would say, "All right, let's go. Let's start buying some products." They say, "We need a 25 melt flow index material." We are like, "We have a 12." Yeah, okay, yeah, that is good. But we need a 25. Yeah, we have a 12. You can make it work. One of the things we had to do is we had to listen hard to the customers and meet them closer to where they are. We got into compounding. Now we are able to make the specific compound that customers need. That was a big game changer for us. It enabled us to get into fiber and film and thermoforming.
That was one big piece. I think that as we've grown up as a company, our operations have gotten really quite a lot better. We're earning our legs on commercial now through technology. We're proving that we can make categories of applications. To our knowledge, no company in the world can take post-consumer curbside waste, random waste from the trash can, and turn it into fiber. No one can take post-consumer curbside waste and turn it into film, at least not at the levels that we can. They might be able to trickle it in at a 2-5% type level, but a 50-60-70% level, they're having a difficult time doing.
I think that as we prove that we can make a bumper, a yogurt cup, a carpet, or a wrapper for a candy bar, I think as we start to show that we can make all these different groupings of applications, the ability to sell to the big brands out there is getting much easier. I think you're right. We had to prove the tech worked at the plant. We had to prove the product worked with customers. Now that we have done that, now it's really about enlisting the right customers to buy the product and also diversifying or, let's say, deciding what segment of products we want to sell into. That's the place that we're at right now. The role has changed. I think that you focus where there is the most immediate need.
We're still focused on the near-term revenue build, but that's going quite well. Now we're starting to shift the focus into the growth. Quite frankly, I think the growth story is going to help the near-term story as well because we're going to start attracting the kind of customers that we want for 20 years.
As an extension of that question, when I think about the tangible, addressable market, obviously, you're going to have financial targets and obviously, as your story further evolves. When you think about just a pound-for-pound basis versus the U.S., European, Asian polypropylene markets, how many pounds do you think you could be in terms of the percentage of that market? What does that look like three years from now, five years from now? Obviously, I won't ask you for a crystal ball for more than five years.
I think that what we've announced so far is GBP 1 billion by GBP 20 billion of installed capacity by the end of 2029, operationalizing it in 2030. GBP 1 billion is like one half of 1%. The market's GBP 200 billion. It's big and it's growing. More people are pulling material into polypropylene. Polypropylene is not shrinking. Polypropylene is growing like 3.5% per year. That is GBP 7 billion of new polypropylene production required each year. Where can we go? I think getting to GBP 1 billion is now finally real and tangible. You think beyond that, and then you have to get back to the CapEx per pound question and the OpEx per pound question. I would leave the group with this.
If you can continue to improve your CapEx per pound and eventually get to a place where there's equivalency or near equivalency with virgin polypropylene production and also show that you've got an operating cost that is advantage to polypropylene virgin production, then why would you build the next GBP 7 billion out of virgin polypropylene? Why wouldn't you just build out a PureCycle? I think that there's going to be an opportunity long term to where we become the technology of choice for growth because we can show we can do it more cost-effectively and we can do it with CapEx efficiency. Why not? I think that's the next two decades.
In the spirit, I want to sneak one more in because I think it's important. In the spirit of the Materials of the Future Conference, of course, if we're sitting here next to each other next year, what do you think we're going to be talking about?
I think it'll be a whole lot of discussion on how are we doing on the ramp, how are we doing on the commercialization at Ironton. I think the focus will really have shifted to what's next. Eventually, people are going to start talking about using more polypropylene. Cars will become more plastic because they become more autonomous. Materials will become more lightweight, so they choose more polypropylene. Maybe polypropylene starts to ramp higher and higher in terms of %.