Clean energy company JBI Inc., which recycles waste plastic into liquid fuels, has announced the closure of its Thorold, Ontario facility as a cost reduction measure.
All eight employees at the facility will be laid off, the company said in an August 26, 2013 announcement. The company’s new executive team has decided to forego having a two-stage plastic delivery process in favor of dealing with processor-ready plastics delivered directly to its fuel processing site in Niagara Falls, NY.
Based on operational data from the first six months of 2013, the company estimates total annualized cost savings as a result of these measures to be approximately $800,000. In July, 2013 the company announced additional cost reduction measures that it anticipated would result in annualized cost savings of approximately $1.3 million.
“Aggressively managing costs is a key component in positioning a company to eventually become cash flow positive,” said JBI CEO Richard Heddle in an August 26, 2013 statement to media.
“In keeping with the encouraging production data we’ve had to start the third quarter, these cuts were an important strategic move for us. We continue with the vision of procuring non-recycled streams of plastic that we can divert from landfill,” he added.
JBI CFO Nicholas Terranova stated that “we feel there is a great opportunity to reduce the cost of our fuel production, as a large portion of these costs have been associated with handling and preparing the plastic before it enters our processors in Niagara Falls. These measures are being taken to address these specific costs directly. Based on reviews of our cost of goods sold, we have realized that acquiring non-recycled, processor-ready plastic is the easiest way to continue having adequate feedstock at a desirable cost while streamlining our supply chain.”