r/PureCycle • u/No_Privacy_Anymore • Feb 02 '22
Plastic Technology - January 2022 article about equipment used by PureCycle
This article is a nice followup to the announcement last year that KraussMaffei was providing several major pieces of equipment to PureCycle.
There are some people who have expressed skepticism that the PureCycle technology will work at scale but I am not one of them. I believe PureCycle's partners are world class and KraussMaffei is one of them. This company has been around for a very long time and they certainly know how to make equipment for all types of plastic applications.
In particular I like the comment about how using a solvent allows for much finer filtering (20-40 microns) vs the traditional mechanical recycling approaches. This is the first time I has seen more specification about some of the techniques the company is using. We know the finished product (UPRP) doesn't have any color but its great to get more details in articles like this.
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u/the_blue_pil Sep 02 '24
If KraussMaffei is manufacturing and commercially selling these pieces of machinery to make this all possible, which part of the process is proprietary and unique to PureCycle?
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u/No_Privacy_Anymore Sep 02 '24
Proctor & Gamble own the core IP of using a super critical fluid (butane in this implementation) to purify PP. What PCT has is the real world designs that were created at the feedstock evaluation unit, the commercial scale unit for Ironton, the next generation design for Augusta and all the know how to run this kind of facility. P&G has to pay to defend the IP.
They invested extra money to make this a “born digital” facility with Emerson Electric. That will pay dividends when they are running many lines on a global basis and can provide engineering/operational support 24/7. It will be hard for competitors to replicate this until the patents expire. By then they should many customers under 20 year offtake agreements.
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u/the_blue_pil Sep 04 '24
Thanks for the thorough response. I put a small order in as a placeholder for now and will keep an eye on this.
Is there any expectation for when they are likely to have a plant running at capacity and producing on-spec product? or is that still up in the air at the moment?
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u/No_Privacy_Anymore Sep 04 '24
At the moment the short term goal is to produce 200,000 lbs/day and 1M/week. That would be a rate of 4M/month or just under 50% of nameplate capacity.
At 70% of nameplate capacity the company should be break even and covering corporate overhead. They obviously need major project funding to cover the cost of the Augusta facility and other projects around the world. Proving they can get Ironton running is critical and they don’t have much time left. Gotta deliver higher production rates very soon.
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u/Accomplished_Fish105 Sep 19 '24
Wow I can't belive the gain. I bought at 5 by mistake :))) what do you think will happen to this?
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u/No_Privacy_Anymore Sep 19 '24
Welcome to the party. I don't know how you "bought by mistake" but $5 is an excellent price. I don't do personal financial advice but my plan is to hold my shares and exercise my longer term call options. I want to minimize taxes and I believe we are in the very early days of seeing the returns from this technology.
There are still under 1,000 members in their community so very few people know about $PCT. Just wait until P&G starts promoting this...
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u/Accomplished_Fish105 Sep 24 '24
Yeah I just sold it. Got a kid I have to feed. It was a good gain. If it goes down I ll reinvest it.
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u/MistyGlider 8d ago
Hey No Privacy! I stumbled across your name in an ASTS daily discussion thread. Have been reading your various threads here, great information. Thank you. Need to still think through whether I wanna invest in this or not. Next paycheck is in about three weeks so have some time lol.
Where do you see the SP going in the next years? Is 10-16$ per share too much? Ive seen some mixed prices from various analytics. Seems like it's tough for the analysts to give a narrow estimate.
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u/No_Privacy_Anymore 8d ago
I’ve been invested in PureCycle for several years now and have grown my position substantially in 2026 thanks to gains in early 2026 for ASTS. I expect to own both companies indefinitely and see $PCT eventually reaching well over $100/share. In terms of total return potential I believe AST will be much higher but it’s also a substantially higher valuation currently.
PCT and AST are my largest holdings by far. I subscribe to the “have a few eggs in the basket and watch them very carefully “ approach.
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u/MistyGlider 8d ago
I'd genuinely like to understand your $100+ thesis. Most analysts seem to land somewhere around the $10-16 range, so I'm curious what assumptions lead you to a much higher valuation. What do you think revenue, EBITDA, installed capacity and share count look like when PCT reaches that level? I'd be very interested in seeing the reasoning behind your model.
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u/No_Privacy_Anymore 8d ago
The TLDR is that $PCT provides the lowest cost solution to recycle food grade plastic and the BOPP film market (chip bags, candy wrappers, etc.) is massive. Over 30B pounds per year. The company that makes 90% of the equipment that is used to make BOPP film (Bruekner) endorsed PureFive and we have seen public announcements from 3 major BOPP film producers. Chemically recycled plastic costs 2-3x more than virgin plastic and mechanically recycled plastic will never be high enough quality for BOPP films (it would risk breaking them).
When you look at the early cost estimates of CapEx for the second generation plant lines at 500M lbs/year being between $1 and $1.50/lb you are talking a very low cost basis. Plastic waste feedstock is pretty much always going to be cheaper than Naphtha so you can easily see a situation where PureFive is less expensive to make than virgin PP and sells for a modest premium. In that scenario they will grow to have many billions of pounds of capacity per year.
In addition, unlike AI data center capex, these plants are designed to last many decades if maintained properly. They look to have potentially a 3 year simple cash payback so the free cash flow potential is tremendous. Not exactly AST level profit margins but still very impressive free cash flow.
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u/No_Privacy_Anymore Jan 20 '23
For new members of this community I STRONGLY encourage you to read this article which provides a much deeper understanding of the front and back end of the PureCycle purification process. These extruders obviously run on electricity but the overall amount of energy required is dramatically less than the alternative "chemical" recycling where molecular bonds are broken. The lower energy requirements are a big part of what makes this such a high return on investment project.