Origin Materials - Week in Review #4 (July 25-29)

Two Carbon Black Partnerships Announced

This week, Origin Materials has announced two separate partnerships. Intertex, a global distributor of synthetic rubber, chemicals, and carbon black has signed an off-take agreement to purchase sustainable carbon black. "The partnership aims to produce carbon black for tires including N660, N550, and N762 specifications, as well as for belts, hoses, rubber seals, plastic extrusion, and all other mechanical rubber goods markets." In addition, the two companies will work to develop a carbon black for rubber automotive window seal applications.

The other partnership revealed was with ATC Plastics, a leading global manufacturer of black color concentrates. "The partnership will target applications like plastic masterbatch, an additive used to color plastic, for corrugated pipe and plastic manufacturing processes such as blow molding, injection molding, pipe extrusion, compounding, plastic film and sheet, and rotational molding." Tom Stevning, Managing Partner at ATC Plastics, commenting on the partnership: "The industry is ready for something like this and it comes at an opportune time when carbon black is in very tight supply."

Carbon black has been in tight supply since 2018. The United States alone imports over 200,000 tons of the material each year. China and Russia are the world's largest producers. Disruptions from Russian supply chains have been causing havoc on European rubber producers, who find themselves paying double for product from China. The global market for carbon black is expected to hit $26 billion by 2025, so there is a huge piece of the pay for Origin to grab. After all, purchasing carbon black from Origin would not only be strategic from an on-shoring supply chain perspective but also from a decarbonizing environmental perspective. It's a win-win for manufacturers.

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Recent Hires

I have discovered two recent notable hires this week. The Operations Manager has been hired for the Origin 1 facility in Sarnia Ontario, who comes with extensive experience:


A second addition to the O1 leadership team, the Chemical Process Operations Shift Lead:


Please note that the above resume screenshots come from LinkedIn profiles, and I have concealed the identity of the persons to respect their privacy. That being said, the team for Origin 1 is filling out nicely. According to my unofficial tally from LinkedIn data, the company now has a total of 134 employees and is still seeking to hire 5 more for O1.

Institutional Position Updates

This week saw over a dozen of institutional positions reported in 13F filings. Notably, Arizona State Retirement System slightly trimmed their position, Versor Investments added significantly to theirs, and the Avantis U.S. Small Cap Equity is an example of an ETF that added due to ORGN's inclusion in the Russell 2000 index. The full list of weekly institutional position changes is below:


Weekly Chart


It was very encouraging to see more volume this week, compared to last week. ORGN ended the week on a very positive Friday, perhaps receiving an overall lift from Manchin/Schumer reconciliation bill - which includes $369 billion for "energy security and climate change." The Q2 Earnings Call is set for August 3rd after the market close, so any positive update coming from that report may be a catalyst to drive the stock even higher. For the week, ORGN was up 10.32%


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