Clariant on Wednesday worsened its annual forecasts, after announcing that it will close its bioethanol plant in Romania and reduce operations in Germany, Reuters reports.

The Swiss company stated that 120 employees will be laid off following the closure of the facility in Podari, in southern Romania, and another 50 jobs will be abolished at its units in Straubing, Planegg and Munich, in Germany.

Clariant, an innovative company focused on specialized chemical products, announced on June 14, 2022 the production of the first quantity of cellulosic ethanol for commercial use at its plant in Podari. The entire quantity was to be taken over by Shell, based on a multi-year contract.

The factory announced then that it will produce approximately 50,000 tons of second-generation biofuels from 250,000 tons of locally sourced agricultural residues. The resulting cellulosic ethanol can be used for blending in conventional fuel, but it also has other opportunities for valorization, being able to be used in bio-based chemical products, as well as in sustainable aviation fuel.

The Podari facility, inaugurated by Clariant in 2021, reported losses after recording technical problems, meaning production never reached full capacity, Clariant chief Konrad Keijzer told journalists, according to Agerpres.

“We have a factory with a capacity of 50,000 tons and we did not manage to make it work close to capacity. The demand for the second generation of bioethanol exists, the commercial side of the business is extremely attractive. There is solid demand, but we have technical issues,” he added.

As of the third quarter of 2022, the Podari unit has accumulated losses of 77 million Swiss francs ($88.06 million), CFO Bill Collins announced.