Origin Materials (ORGN) just announced their first signed customer for the world's first 100% PET caps and closures: Berlin Packaging, a global leader. Origin will essentially be selling caps and closures to them wholesale. Stock up 30% today. Up 100% from recent lows. Still cheap.
This investment was looking much riskier after delays announced in the last ER. As cash is a concern (still plenty of runway), the company has been guiding towards "favorable financing" on its thermoforming CapFormer lines in 2H 2025. I believe this deal with Berlin is it. This should unlock that door. Turns out, Berlin featured a picture of Origin's lead SKU-- the PCO 1881 bottle cap, industry standard for water and carbonated beverages-- on their website a full year ago:
berlinpackaging.com
Origin continues to forecast more deals with brands and bottling companies in the near future in this $65B TAM, expected to be $100B by 2030. Larger SKUs, such as peanut butter jar lids, will have much higher margins. As PET has superior barrier properties, it should allow manufacturers to discontinue foil and paper linings as well. The initial, massive two-year $100M MOU signed a year ago for PCO 1881* (almost certainly Coke or Pepsi, possibly Nestle or Danone) is still in qualifications. CEO John Bissell said it's not a question of if, but when. His credibility meter just spiked today among investors.
Demand is said to be unlimited. One investor reported seeing it for himself at "NPE 2024 - The Plastics Show" in Orlando, where Origin's 1881 PET cap was debuted. The industry has been wanting PET caps and closures for years, but it has always failed with traditional injection molding. In fact, it was intense customer demand that finally led Origin Materials to pursue this years ago as a side project.
* That's roughly 5 Billion caps per year. Origin will need almost full capacity (maybe 75%) on their initial 8 CapFormer lines expected to be online in 1H 2026. Origin will most likely license the technology. From the last ER, "Over Twenty Companies Qualifying or Preparing to Qualify Origin PET Caps, Including Six on Fortune 500 List" |
