CRAiLAR was mentioned in this month’s issue of Textile Insight magazine (a big THANK YOU to Kathlyn Swantko!), a publication that targets textiles, sourcing, design and style. Textile Insight featured the Top 10 companies from 2013’s LAUNCH Systems Challenge. CRAiLAR is among the roster of companies focused on innovations to bridge the gap between consumer and reducer. Sponsored by NASA, Nike, the U.S. Agency for International Development and the U.S. Department of State, LAUNCH promotes companies to further their developments in sustainability and innovative technology. This year LAUNCH focuses on sustainable textile innovations. CRAiLAR flax fiber is a worthy member to the Top 10 party with our eco-friendly manufacturing practices and comparable quality in the soft fiber market. Requiring 97% less water than cotton, far fewer pesticides and herbicides and designated 100% BioPreffered by the USDA, CRAiLAR flax fiber is doing its share by reducing water pollution and usage. The article can be found in the November/December issue on page 20 or you can follow this link to see the digital edition.
Yesterday, CRAiLAR announced that it has signed a letter of intent (LOI) to acquire a European fiber dyeing facility that has been in operation for more than 30 years. The acquisition, which is subject to entry into definitive agreements and prior regulatory approval, would establish CRAiLAR Flax fiber production for the Company in one of the most prolific flax growing regions in Western Europe. We wanted to take some time to answer questions you might have about this proposed transaction. This is a very exciting time at CRAiLAR!
Why are you proposing purchase of a fiber dying facility?
We have the opportunity to accelerate our timeline for establishing company controlled CRAiLAR enzyme processing by almost nine months, and most importantly generating positive gross margins - thereby reducing our cash burn – key deliverables for the Company now. We are fortunate that the same equipment used in the fiber dying process is used in the proprietary enzymatic CRAiLAR process. This gives us the opportunity to achieve the goals stated above by acquiring an existing, fully operational fiber dying facility.
What is the company and where is it located?
For competitive reasons, we will reveal more information when we are able to confirm that CRAiLAR will move forward with the transaction. In the meantime, we can say that it is a family-owned business that has been in operation for multiple generations. In acquiring the business, we would gain a long history of experience, equipment, technology and intellectual capital – all valuable assets to the future of CRAiLAR. In fact, the quality of CRAiLAR fiber coming out of this facility for current production is some of the best we have ever seen. Additionally, it would put CRAiLAR in the top flax fiber growing region in the world, where 85% of the world’s production of fiber quality flax originate.
What is the proposed cost of this transaction?
There is no immediate cash outlay required. CRAiLAR will retire U.S.$1.2 million of the vendor’s debt over a three-year period, presenting highly favorable terms for us moving forward.
What is the anticipated timeline to close this acquisition?
We anticipate approximately 4-6 weeks, and will make another announcement at the close of due diligence. We are highly motivated by the prospects of accelerating our production timeline to achieve our stated goals of positive gross margin production, along with some of the best CRAiLAR quality fiber we have ever seen. This presents an opportunity to enter into a plug-and-play facility while reducing the capital required to achieve those production targets.
What does this mean for production efforts to date?
It means that the strategic initiative to integrate CRAiLAR enzyme processing at our current facility in Pamplico will continue to be a key priority, currently under review and due diligence by some of our global brand partners. This opportunity to acquire an existing fiber dying facility in Europe means that we now have an immediate opportunity to create a revenue stream with no capital outlay. Our flagship Pamplico facility, upon complete equipment installation for the entire CRAiLAR process, will run one of the most advanced flax fiber processing lines in the world. In the meantime, the Company will generate revenues with our new facility while completeing the build out of our Pamplico facility.
CRAiLAR in Top 20 for LAUNCH SYSTEMS CHALLENGE 2013
We recently told you about our participation in LAUNCH 2020 Summit held at Nike Headquarters in Beaverton, Oregon. Founding partners NASA, NIKE, the US Agency for International Development (USAID) and the US Department of State formed LAUNCH in an effort to bring collective genius, unprecedented networks, and new resources to overcome some of humanity’s toughest sustainability challenges.
In the process of participating, CRAiLAR was subsequently invited to join the LAUNCH System Challenge 2013, which seeks innovations that will transform the system of fabrics to one that advances equitable global economic growth, drives human prosperity and replenishes the planet’s resources.
CRAiLAR has been selected as a Top 20 System Challenge Innovator, and WE NEED YOUR VOTE TO MAKE IT TO THE FINAL 10!
The voting process will take you less than two minutes to sign up, and could advance CRAiLAR along the path toward further resources, knowledge and potential investment offered through the company's alignment with NASA, USAID, US Dept of State and NIKE that this achievement would present.
So, please vote for CRAiLAR for the LAUNCH System Challenge 2013, and pass this along to others who can learn more about the company and vote at this important time.
Voting ends on Tuesday, August 20. Happy voting!
California Apparel News recently caught up with Kara Nicholas, vice president of new product and marketing for Cone Denim, at Kingpins New York. Ms. Nicholas has been instrumental to CRAiLAR's developments with these arbitors of cool in the denim world. Kingpins NY drew 872 attendees and 370 exhibitors from July 16–17, the best attended in the boutique denim trade show’s history. Read more about the show and Ms. Nicholas' comments about CRAiLAR here. Did you miss "A Q&A With Cone Denim's Kara Nicholas," earlier this year? This is a good opportunity to revisit and gain greater insight into Cone broadly and into the opportunities for CRAiLAR specifically.
The July 17 issue of Southeast Farm Press featured a story titled "Flax: A winter crop option for South Carolina growers." In the story, reporter Roy Roberson talked to flax grower Neal Baxley of Baxley Farms, which has grown flax for CRAiLAR the past two seasons, along with our own Steve Sandroni, vice president of agriculture at CRAiLAR. Read on to learn about the growing methods and benefits of growing flax in the region.