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Only 1 percent of all textiles produced in the world is recycled into new clothing. The rest is thrown into the garbage and burned. The fashion industry has long been criticized for focusing on “fast fashion” – that is, fast and cheap. The Swedish company wants all this Renew cell change.
Their technology can produce a dough, under the brand name “Circulose”, consisting of 100 percent recycled viscose and cotton textiles. The material is then made from entirely new fabric fibers that are used in clothing, for example H&M and Levi’s in 2020 began releasing garments consisting of recycled materials at Renewcell.
Renewcell currently operates a plant in Kristinehamn that has a maximum capacity of 4,500 tonnes of textiles per year, but these volumes do not go far enough when demand for its product has steadily increased. For some time now, Renewcell has been evaluating where its first major factory will end.
Read more: Milestone for future H&M Swedish fabric: begins to be sold in stores
The choice has now fallen to SCA’s paper mill in Ortviken, outside Sundsvall. The company has signed a multi-year lease and is taking over certain facilities within SCA’s industrial area that was previously used for the production of newsprint.
Renewcell estimates that the company will create hundreds of jobs. The plant is expected to be able to recycle 60,000 tonnes of textiles per year when it comes into operation from 2022, which corresponds to about half of Sweden’s annual textile consumption.
“We are super happy. Our business is quite similar to the business that has been there before, which means that there is already a large amount of infrastructure in place and that there are competent staff that we look forward to employing, ”says Patrik Lundström, CEO of Renewcell.
Should SCA also invest in Renewcell?
“Today there is no such declared ambition, so far we only have a pure lease. But SCA is a fantastic company, so of course we are open to working even closer with them if there is interest in the future, ”says Patrik Lundström.
SCA facilities in Ortviken on the outskirts of Sundsvall.
Photo: Press.
The company has already applied for the usual environmental permits to be able to move in with SCA and the first sods in the remodel are expected to be taken in early 2021.
“From Sundsvall, you can travel by boat to Asia. It’s a fantastic situation for us, ”says the CEO.
In parallel, Renewcell has signed an important customer agreement with the Chinese company Tangshan Sanyou, which is one of the world’s largest producers of viscose fiber. From the start of delivery, the contract spans five years and has a total value of $ 220 million, or about 2 billion crowns.
“It is huge for us and indeed for the entire industry, where lengthy deals are not so common. We will deliver 40,000 tonnes of pulp per year to Tangshan Sanyou, which means we have already sold two-thirds of our future capacity at Ortviken. ”Says Patrik Lundström.
Renewcell claims to be 5-7 years ahead of the competition, which in most cases only has a small percentage of recycled textile material in its pulp. There are more collaborations with global clothing brands, in addition to H&M and Levi’s, and according to Patrik Lundström, most of the winds are blowing in the direction of the company.
For example, a new EU directive states that starting in 2025, all member states will collect textiles in the same way as PET cans, cups and bottles. These should not be stored or incinerated, but rather recycled.
“Our entire industry needs to change, we have big environmental problems and it is not possible to wait. Consumers are demanding it, and fashion brands are listening. In addition, the financial sector is beginning to realize that it is possible to achieve profitability in companies that can lead that change, ”says Patrik Lundström.
But there is still some uncertainty about Renewell’s own funding. To date, the company has raised around SEK 220 million in external capital since its inception in 2012. Even Kapp-Ahl and state Almi Invest is on the list of owners and H&M controls 10.5 percent of Renewcell. The largest owner is financier Malcolm Norlin through the companies Girindus Investments and Girincubator with almost 38 percent of the shares.
It previously reported that Renewcell evaluated a public listing in the fall of 2020 to raise new capital. A process is underway to strengthen the balance sheet and finance the factory in Sundsvall, confirms Patrik Lundström. But according to the CEO, bank loans are also an alternative, where the opportunities for good terms have been improved thanks to the client agreement with Tangshan Sanyou. Renewcell was valued earlier this year at around 500 million crowns.
“We continue with our capital raising, the process is progressing well and quickly thanks to the great interest. A little over a billion crowns will be invested. But unfortunately I can’t say which track we have chosen, ”says Patrik Lundström.
Read more: H&M Renewcell’s Swedish company on its way to the stock market
