Nanollose (ASX: NC6) has raised $2.85 million in an over-subscribed placement to sophisticated and professional investors, with funds to underpin pilot production of its environmentally friendly tree-free fibres and fabrics.
Traditional rayon fibres are created from trees, which results in the destruction of forests. The next stage in the process for creating rayon comprises wood pulping which is energy intensive, uses hazardous chemicals and leads to waste and pollution.
In comparison, Nanollose has developed a tree-free nullarbor lyocell fibre for clothing and textiles. It has also created nufolium for nonwoven applications including personal wipes.
Nanollose’s technology uses microbes that covert waste products into microbial cellulose.
The company says this process takes less than a month and requires “very little” land, water or energy.
This microbial cellulose is then converted into rayon fibres using Nanollose technology, which has the added advantage of compatibility with existing industry methods and equipment.
Peak Asset Management leads $2.85m offer
Peak Asset Management led the $2.85m placement, which has given sophisticated and professional investors the ability to scoop up a stake in Nanollose.
Investors have been offered Nanollose shares at $0.10 each, including a 1:2 option with a strike price of $0.15 and three year expiry.
The development and commercialisation of Nanollose’s technology is being accelerated under a joint patent application and collaboration agreement with one of India’s top publicly-listed companies Grasim Industries (India).
Grasim is the flagship company of India’s US$48.3 billion Aditya Birla Group. It is also a global producer of manmade cellulosic fibres for apparel, textiles and non-woven applications.
Pilot production to capitalise on ‘high growth’ markets
The $2.85 million capital raising will help Nanollose to begin the pilot production phase and generate 1-5 tonnes a month of lyocell.
The lyocell market is predicted to be valued at US$1.5 billion by 2024 – increasing at a compound annual growth rate (CAGR) of 8%.
Meanwhile, Nanollose has a first mover advantage in the rayon market which is forecast to rise from US$14.4 billion in 2019 to US$20.9 billion by 2024.
Another target market for Nanollose’s technology is personal wipes. This market alone is anticipated to grow to US$23 billion by 2025 at a CAGR of 5.6%.
Additionally, Nanollose’s technology has “significant opportunity” as major global fashion companies such as Nike, Zara and Prada move towards more environmentally friendly practices.
Nanollose has already received “strong interest” from major international clothing brands and super users of cellulose-based fibres.
Author: Lorna Nicholas
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