Dutch plastic-derived pyrolysis oil (PPO) producer Pryme said capital expenditure (capex) will be "significantly higher" than initially estimated for its second planned site in northern Europe, known as Pryme Two.
Pryme Two will feature three-five reactor chains with an expected annual output of 50,000-80,000 t/yr of PPO when completed, the company said. Changes to expected reactor train capacities and other design elements as a result of learning from its first site, Pryme One, have led it to increase its capex forecast for the project, although it did not provide further details. Plans for further sites, Pryme Three and Four, remain on hold until funding has been secured for Pryme Two, the company said.
The company also announced it had produced 100t of PPO in October and November, bringing the annual yield of PPO to 336t from its Pryme One site. The site will undergo maintenance in the remainder of 2024, and does not expect any more meaningful volumes until 2025.
The company is seeking a capital increase of €8-10mn ($8.5mn-10.6mn) "as soon as practicable" in order to support operations, as Pryme One is not expected to reach breakeven cash flow until late 2025 or early 2026, according to the company. The company said it is in the process of renegotiating with its suppliers and customers as it needed to "achieve improved commercial terms" to avoid operating at a loss even when Pryme One achieves production rates in line with its nameplate capacity, which Pryme expects in late 2025.
The company said the net loss for October 2024 was €1.9mn and a similar loss is expected in November. As of 28 November, Pryme had a cash balance of €7.4mn.
In the third quarter earnings report in November, Pryme said it had revised down the stated production capacity of the plant to 16,700 t/yr from 30,000 t/yr. This is a result of a lower feedstock-to-oil yield expectation — 65pc, compared with a previous estimate of 75pc — and a reduction in the plant's expected input processing capacity to 26,000 t/yr from 40,000 t/yr, as the downtime needed for reactor feeding, and cleaning and maintenance of equipment has proved longer than expected.
