“It isn’t any different than Entropex” says Sarnia Mayor Mike Bradley in describing the financial woes of BioAmber Sarnia Inc.
BioAmber, a Montreal - based company with 60 employees in Sarnia’s Chemical Valley has filed for bankruptcy protection in both Canada and the United States after running out of cash.
The company with breakthrough technology manufactures succinic acid from corn syrup used in a wide range of products, everything from plastics to cosmetics to food additives.
But Bradley says while the management team was “very professional,” the company was unable to meet debt servicing requirements to sustain operations.
In developing its technology BioAmber attracted $52 million in Federal and Provincial money to build its $140 million Sarnia plant that went into full production last year.
With bio – fuels cluster in Sarnia, “we always knew there would be winners and losers,” says Bradley who is optimistic another company will pick up the assets. “The risk is always higher with bio – fuels companies than in traditional industry”.
BioAmber’s founding president left the company last year as it was delisted from the both the New York and Toronto stock exchanges.
In a press release the company said it filed for protection in both Canada and the United States in an effort to stabilize while it restructures its finances. However, it warns if it fails to refinance, the company “will likely be forced to cease operations and liquidate assets”.
Bradley doubts that will happen and suggests BioAmber will emerge a stronger company. “I wasn’t surprised, we kind of saw this coming” he says, suggesting it will not deter the Sarnia economy in efforts to move beyond traditional refining and petrochemicals. Bradley views BioAmber as a leader in creating a cluster of bio - industries. “It’s a leader and will continue to be. There is a momentum”.
Last year Entropex, a plastics recycler on Lougar Street went bankrupt after more than 40 years.
The company had 155 employees.
Entropex was acquired by Merlin Plastics Group of Delta, British Columbia and waste recycler Emterra Group of Burlington, Ontario.
It was renamed ReVital Polymers Inc. and according to Bradley is “now stronger for it”.