TAIF GC to continue to implement biopolymer production project

Tatarstan bioplastic

Information that Bio-On S.p.A. announced bankruptcy after the court’s decision ruled in Bologna (Italy) on 20 December appeared on specialised websites dedicated to the polymer market last week. It is a famous Italian manufacturer of bioplastics. It should be reminded that TAIF Group of Companies signed an agreement on a joint project to produce polyhydroxyalkanoate (PHA) in Tatarstan in 2018. It was to be the first Russian factory to produce this type of bioplastics. Sugar beet molasses is used as feedstock to make the biodegradable plastic. The designed production capacity of the enterprise was fixed at 10,000 tonnes a year.

During the year after signing the agreement, 2BIO — the joint company of TAIF and Italy’s InvestiRE Italia società a responsabilità limitata created to implement the project — did a big job: from examining sites to locate the production, choosing it, obtaining the status as Alabuga SEZ resident to acceptance of licensing documentation and elaboration of the basic project. However, at the same time, the licensor faced serious financial problems in Italy.

Hunt for Italian “rhinoceros”

It should be noted that little-known company in Russia, Bio-On, drew the attention of both professional investment funds and individual investors in Italy itself and Europe in general in 2018 and early 2019. Financial analysts ranked it among the most attracting rhinoceros — fast-growing and promising start-ups.

Both the popularity of the environmental topic and real actions of the company helps it. Bio-On demonstrated real laboratories and production capacities, signed agreements with global concerns such as Kartell and Unilever, began the production of the first goods. The project became almost the major pennant for Italian authorities in the fight for the environment.

It was no surprise that professional stock players were also interested in the company. Quintessential Capital Management, a US company with Italian roots, specialised in making money on short-term investments turned out among them. In summer 2019, the company unexpectedly prepared a report in which it provided its calculations of Bio-On’s financial state and guesses about the technology itself. Even though the management of Bio-On claimed that Quintessential Capital Management was interested in speculation for a fall in Bio-On’s positions in the stock market, the report became the foundation to launch an investigation and legal proceedings later.

The problems in the financial markets coincided with that tough period when Bio-On was conducting start-up and commissioning and launching new products in the market. The investigation undermined the company’s economic state. In October 2019, Reuters said that 60% of Bio-On’s capital, which belonged to its founders, was blocked, and the founders and officials were removed from their posts, after which the shares of the company cheapened by 80%. In November 2019, the company announced that it stopped any types of payments, including to its staff, suppliers and financial institutions due to the investigation of its activity. It was decided in December to launch the bankruptcy process. Moreover, Italian authorities interfered in the inquiry that not only appointed a temporary manager but also a new administration in the company.

“We continue looking for pre-engineering solutions”

As Realnoe Vremya was said at 2BIO JSC, the Russian investors were aware of Bio-Оn’s difficulties due to ambiguous actions of some players in Italy’s stock markets immediately, in July 2019. However, 2BIO had already obtained licensing documentation by that time.

Director General of 2BIO JSC Pavel Trofimov said that at the moment the investors’ decision to create a big environmentally friendly factory manufacturing biodegradable plastic in Tatarstan despite the licensor’s financial hardship didn’t change.

“We are closely following how the situation is unfolding at Bio-On and in constant contact both with its Director General Mr Riccardo Casoni and representative of its temporary administration Luca Mandrioli. We continue looking for pre-engineering solutions to provide the manufacturing unit with energy resources considering the сhosen site, we also continue studying alternative technologies,” Pavel Trofimov said.

Italian authorities to ensure the technology will be saved

The situation around Bio-On, indeed, began to change rapidly. It should be noted that Italian authorities declared the importance of the project for the country and its scientific and industrial potential. They managed to find money to save the company’s assets, including manufacturing and scientific staff. The salaries stopped from being paid for two months, but the situation already improved in December — there was found a solution to finance its payments through the State Extraordinary Surplus Fund and Emil Banca.

Italian judiciary authorities and Bio-Оn’s temporary administration declared they would look for ways to save the technology and manufacturing complex of the enterprise and further rehabilitation of the company.