ECO2 Plastics Board Approves Plan to Relocate Plant

The board of directors for ECO2 Plastics, Inc. has approved a plan to relocate and upgrade the company's current production facility to a new location in Northern California.

In conjunction with the plan, the company closed its existing facility in Riverbank, Calif., and laid off 47 employees. The company also has begun dismantling existing equipment. Over the next nine months, the company will shut down production as it builds a new facility. The company has identified a suitable site for the new facility as well as new equipment that will be installed alongside certain existing equipment in order to complete an improved production line. The company has not yet, however, made final decisions as to the site location or equipment vendor.

The company projects that development of the new plant will require approximately $9 million in new capital, including some funds required to pay currently outstanding accounts payable. The company expects that a significant portion of this amount can be financed through equipment lease and other commercial credit facilities, while the balance of the requisite funding will need to be sourced from equity or debt investors.

The company expects that the newly developed plant will generate recycled plastic in sufficient volume and at sufficient quality and yield, along with an efficient cost of production, such that the business will operate profitably following completion of the new facility and achievement of targeted production volumes.