Two waste and recycling veterans who teamed up to purchase the assets of financially troubled Entropex paid just over $4 million for the 180,000 square foot Lougar Street plant and business.
However, Rob Smith says the new owners, Tony Moucachen and Emmie Leung will fork out another $2.5 million to clean up the site and meet Ministry of Environment compliance orders.
Smith, a senior vice president with London – based MNP, the court appointed trustee says there are “sewage and drainage issue” that the new owners have to remediate over the next two years.
Entropex closed last summer after racking up more than $8 million in obligations to Scotia Bank and Roynat.
Moucachen who is the founder and president of Merlin Plastics Group of Delta, British Columbia and Leung the founder and CEO of Burlington–based Emterra Group swooped in to buy the assets and renamed the company ReVital Polymers Inc.
The facility will focus on various grades of plastics packaging and will recover both post – consumer and post – industrial rigid plastics, converting them into various commodity resins.
Moucachen and Leung have indicated they will restart ReVital Polymers in stages “that will reflect a fresh vision and mission”. Published reports suggest the revitalized company will concentrate on customized production to meet specific needs of its customers contributing to what the new owners describe as “more valuable and more sustainable products made from recycled content”.
Entropex, was crippled by plummeting prices for recycled resin, soaring power costs and what were described as “challenges” developing new markets for its products. Smith told First Monday “falling crude prices caused virgin plastic prices to tumble making it difficult to sell recycled plastic”.
Entropoex had revenue of $40 to $45 million when it collapsed but didn’t have the financial strength to weather changing market conditions. The company had cash flow problems and had been struggling for several years.
Smith described the new owners as “industry veterans” with financial strength and the ability to adapt.
Entropex had 155 employees when it closed. Some have been rehired.
Smith says Entropex president Keith Bechard was instrumental in bring in the new owners.