PureCycle Technologies(US:PCT)2021-08-12 20:50Financial Data and Key Metrics Changes - The company ended Q2 2021 with $238 million in unrestricted cash and investments, a decrease from $570 million at the end of Q1 2021, attributed to operating expenses, construction expenditures, and interest payments [41][42]. Business Line Data and Key Metrics Changes - The Ironton plant is on track for commissioning in the second half of 2022, with construction activities expected to start in Q3 2021 [8][14]. - The Augusta plant's initial engineering design is expected to be completed by early October, with a capacity of 130 million pounds per year per line, reduced from the original 165 million pounds [16][18]. Market Data and Key Metrics Changes - The company is actively negotiating feedstock contracts worth over £300 million, with expectations to close multiple agreements in Q3 [9][10]. - The feedstock strategy includes a focus on post-consumer curbside, non-curbside, and post-industrial waste, with promising opportunities identified for large volumes at good value [26][30]. Company Strategy and Development Direction - The company aims to expand its purification capabilities to Asia and is preparing for long lead purchases for the Augusta site [10][11]. - A new pricing model, "feedstock plus," has been accepted in the market, which is expected to enhance margins and de-risk the business model [37][38]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the progress of the Ironton and Augusta plants despite global supply chain disruptions due to COVID-19 [14][15]. - The company anticipates that the demand for ultra-pure recycled polypropylene will continue to grow, with plans to produce 1 billion pounds by 2025 [40][45]. Other Important Information - The company has signed a memorandum of understanding with SK Global to pursue a joint venture in South Korea, with plans for plant construction to begin by the end of 2022 [55][56]. - The company is focusing on building its own feedstock processing capabilities to control supply and optimize its supply chain [30][66]. Q&A Session Summary Question: Can you provide history on the MOU with SK Global and key milestones? - Management highlighted the strong alignment of interests with SK Global and noted that the relationship has developed positively, with a focus on finalizing a definitive agreement [55][56]. Question: How should we think about pricing contracts for the Augusta plant? - Management indicated that the pricing model will be hybrid, incorporating both legacy contracts and the new feedstock plus model [72][73]. Question: What are the plans for feedstock processing at Augusta? - The company plans to primarily focus on purification at Augusta, with preprocessing done at separate locations to optimize logistics [65][66]. Question: How is the company managing construction costs amid inflation? - Management expressed confidence in the cost and schedule management for the Ironton plant, noting that agreements were made well in advance [113][114].