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Spinnova Ramps Up Investments as Commercialization Begins

Spinnova’s first-half revenue grew to $7.62 million from $368,840, while investments reached $7.42 million.

In a Nutshell: Finnish textile manufacturer and Marimekko collaborator Spinnova, which makes fiber out of wood or waste, such as leather, textile or agricultural waste, without harmful chemicals, said Thursday it doesn’t expect to turn a profit this year as its builds production capacity and commercialization.

Spinnova said the business targets set in June 2021 were to achieve 150,000 tons of production capacity, to be earnings before interest and taxes (EBIT) positive and secure up to 20 brand partners. The company said it will continue to work toward these targets and execute its strategy according to plan this year.

This year, Spinnova’s revenues are expected to grow in comparison to 2021, driven primarily by higher technology sales of the project deliveries to its Woodspin–a 50-50 joint venture between Spinnova and Suzano–and Respin–a 50-50 joint venture between Spinnova and Ecco–facilities. During 2022, while Spinnova focuses on investing in growth and production scaling, the company is not expected to be profitable.

Spinnova reported growth in its target market and strong demand for its sustainable textile materials. The company expects to complete construction on the first Woodspin factory on time with operations starting at the end of the year. Spinnova expects to continue to launch commercial editions of products with brand partners.

In order to enhance sustainability and R&D capabilities of the factory, as well as to account for cost inflation, Woodspin’s capital investment budget increased to 9 million euros ($8.97 million). Respin’s pilot factory has been running successfully during the current year and is starting to gear up for the commercialization phase according to schedule.

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Total investments in the six months were 7.44 million euros ($7.42 million) compared to investments of 2.95 million euros ($2.94 million) in the prior-year period. Net cash at the end of the half was 95.06 million euros ($94.76 million). The number of permanent employees at the end of the period grew to 69 from 49 year over year.

During the six-month period, Spinnova’s first commercial product made with a Spinnova blend was launched with Adidas and ARKET. These products are made with a Spinnova fiber and cotton blend, demonstrating Spinnova as a sustainable premium textile ingredient brand suitable for commercial use, it said. Product development continues with many brand partners and Spinnova aims to continue introducing new commercial products throughout the year.

Sales: Revenue for the first half through June grew to 7.64 million euros ($7.62 million) from 370,000 euros ($368,840) in the first half of 2021.

Earnings: Spinnova reported an operating loss for the period of 5.83 million euros ($5.81 million) compared to a loss of 3.09 million euros ($3.08 million) in the prior-year first half.

CEO’s Take: CEO Kim Poulsen said: “The first half of 2022 was a time of many exciting changes for Spinnova. I was humbled and honored to start as Spinnova’s CEO on Aug. 1, continuing the outstanding work of co-founder Janne Poranen. Our ambitious goal is to scale and commercialize Spinnova’s fiber technology and production with our highly dedicated and talented team.

“Our breakthrough technology sets Spinnova apart,” Poulsen added. “Carbon handprint calculations made for the first Spinnova commercial factory in 2022 showed that the production value chain is expected to save more CO2 emissions than it emits, making Spinnova fiber a climate positive textile material. This is a huge advantage in the textile market where the shift to sustainable materials is speeding up. Spinnova’s technology is ready to scale, and I look forward to executing our growth strategy further together with the whole team.”