While a recent scaleback in operations is “kind of traumatic,”?the president and CEO of ZeaChem Inc. is optimistic about resolving their funding woes and moving forward with biofuels development.

Jim Imbler lamented the timing of layoffs, which came just weeks after ZeaChem announced it had successfully produced cellulosic ethanol at its integrated biorefinery in Boardman.

The company failed to close on a short-term bridge loan, which cost jobs at the local plant, as well as a lab in California and others at their Colorado headquarters.

But Imbler said the setback is only temporary, and hopes to have their financial house back in order within weeks.

“These are the kinds of things that can happen when you’re running a startup,”?Imbler said. “Our team is very excited, and business is going to work. There’s a reason this isn’t for the faint of heart.”

ZeaChem released a statement Friday that it laid off a number of employees, but continues to have “very productive conversations with investors.” The Boardman facility remains staffed, albeit at much-reduced capability, Imbler said.

Imbler did not specify how many positions were lost. Peter Wilhelm, plant manager, also declined comment when contacted Monday.

Backed by millions of dollars in federal grants and loans, and with support from investors like Valero Energy Corporation, ZeaChem is working toward commercialization of cellulosic ethanol, a type of biofuel made from the inedible parts of plants such as wood, wheat straw or corn stover.

ZeaChem received $25 million from the U.S. Department of Energy in 2009, and another $12 million from the U.S. Department of Agriculture in 2011, to build its current demonstration facility at the Port of Morrow. It uses sawdust from the local GreenWood Resources poplar tree farm as biomass for fuel.

The plant started producing cellulosic ethanol March 13 before this “unforeseen glitch” interrupted their progress, Imbler said.

“Only in the world of startups can this happen,”?Imbler said.

Once the loan is settled, management plans to bring back about the same staff as before, Imbler said.

The demonstration plant, meanwhile continues to refine the processes for making cellulosic ethanol. It has the capacity to produce 250,000 gallons per year.

Future plans include the construction of a full-scale commercial biorefinery, to be built adjacent to the current Boardman facility. It would produce 25 million gallons of biofuel per year.

A portion of the project is supported by a $232.5-million USDA loan guarantee, and ZeaChem estimates it will add 100 construction and 65 full-time jobs to the area.

The bridge loan was intended to carry the company over into their next round of funding.

Most investors remain on board and excited, Imbler said. Bill Day, spokesman with Valero, said they remain invested in helping ZeaChem gain a toehold into the next generation of biofuels.

“ZeaChem is working on emerging biofuels technology. It’s really interesting stuff,”?Day said. “We hope to apply that to our existing ethanol plants once that technology becomes available.”

To get there, Imbler said they are focused on moving forward with operations.

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Contact George Plaven at gplaven@gmail.com or 541-564-4547.

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