Nanollose Ltd (ASX:NC6) closed out the 2021 financial year by improving its bottom line and strengthening its cash position, as it prepares for the pilot production phase of its tree-free lyocell.
The environmental biotech recorded a loss of $931,045, down from $1.2 million the year prior, whilst also boosting its cash position to $3 million, up 258%.
Its focus now turns to the pilot production phase with a view to producing initial multi-kilo quantities of next-generation synthetic fibre in the second half of 2021.
Billion-dollar opportunity
Nanollose director Winton Willesee said the company was targeting the US$500 billion textile industry with an initial focus on the US$14.4 billion rayon market.
“During the year, we received significant interest from parties in relation to both 100% tree-free lyocell and various blends, with samples from upcoming pilot spins to be dispatched to select brands and preferred partners during scale-up,” he said in the annual report.
“The production of blended fibres is a common strategy in the fibre and textile industries, and an expanded product range of blended and 100% tree-free fibres will enable us to appeal to customers at different price points.
“This approach presents a significant opportunity for Nanollose, with the lyocell market predicted to be worth US$1.5 billion by 2024, growing with a CAGR of around 8%.
“Moreover, the overall rayon market is predicted to be US$20.9 billion by 2024, growing with a CAGR of around 7.8%.
“The first pilot fibre spin is an important step in the commercialisation process, as it will allow us to refine the processing of our microbial cellulose to generate the consistency and specifications expected for commercial fibre production.
“The first pilot spin will also produce fibre to generate samples for potential partners in the fashion and textiles industries, in addition to providing valuable technical information about the production process.”
Tree-free lyocell
Lyocell is a form of rayon, which is a synthetic fibre made from natural sources of regenerated cellulose, like wood.
Cellulose is largely obtained from tree-based sources such as cotton, flax and timber, which require considerable agricultural land, putting pressure on natural resources.
Nanollose’s technology creates microbial cellulose from industrial organic and agricultural waste, which is then transformed into rayon fibres with minimal environmental impact.
It has produced what it believes to be the world’s first tree-free viscose-rayon fibre, nullarbor fibre, which has also been successfully spun into yarn, fabric and a garment.
Nullarbor fibre is finer than silk and significantly stronger than conventional lyocell that is traditionally produced from wood pulp.
FY21 progress
Nanollose made significant progress in the 2021 financial year, as it works towards shortlisting potential offtake partners and hopes to formalise a number of agreements in the current quarter.
Its first shipment of microbial cellulose (MC) was received by Birla Cellulose in India in May, with further processing and testing continuing prior to it being blended with other cellulosic feedstock and spun into lyocell fibre at pilot scale.
The material is currently undergoing further processing and testing at Birla’s pilot facilities, in preparation for the first pilot production of nullarbor fibre.
In January, Nanollose and Grasim Industries Ltd, Birla’s parent company, filed a patent for a high tenacity lyocell fibre made from microbial cellulose.
They are now focused on taking its promising test success to the pilot-scale to produce initial quantities of fibre to enable commercial agreements with a select number of fashion brands.
As part of its move into fashion, Nanollose appointed Carla Woidt as a fashion consultant to assist in further building the company’s established relationships in the Australian and global fashion industry and its commercialisation and implementation strategy.
“I’m very excited to be working with a company such as Nanollose, that is at the forefront of sustainable fashion and I look forward to using my experience to assist with the commercialisation of their tree-free fibres,” she said.
The company is also well funded, having raised $2.85 million to expedite development.
- Daniel Paproth