Spinnova is spinning some new funds into cost-competitive, sustainable fibers.
The Scandinavian textile fiber firm was granted a 12.7 million euros ($13.8 million) research and development loan by Business Finland to develop and scale its fiber production technology while also lowering capital expenditure.
The R&D loan will be divided into two phases for three and a half years. The first phase—totaling 7.7 million euros (about $8.4 million)—will last two years. The second phase covers the remaining year and a half, evaluated at 4.8 million euros (roughly $5.2 million), but hinders the success of some prerequisites outlined in the first phase.
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The first phase focuses on process efficiency, “further fiber recipe development” and automatizing Spinnova’s technology. What the specific technical and commercial criteria targets are—to be achieved within this phase for the next phase to begin—is unclear. However, if that criterion is met, the second phase will focus on product development—for new textiles, among other applications—and process efficiency.
“We are grateful that Business Finland continues to support Spinnova in the commercialization of our fiber technology,” said Juha Salmela, Spinnova’s chief technology officer. “With this significant financing, we are able to speed up our R&D work, which is done together with our partners, in order to increase the cost competitiveness and attractiveness of the unique Spinnova technology.”
Last August, the government organization for innovation funding endowed Spinnova with a two-year grant to develop a pilot program that will develop new fibers from agricultural and textile waste streams as well as refine and recycle Spinnova-branded textile products. The grant was valued at 1.9 million euros ($2.1 million) and was equal to half the value of the project’s total cost of 3.9 million euros ($4.25 million).
“Spinnova has previously received grants from Business Finland, for example, for developing Spinnova fiber from textile and agricultural waste streams,” the Marimekko partner said in a statement. “These earlier development projects continue concurrently with the now-starting R&D project.”
This loan also represents 50 percent of the project’s total cost estimate of 25 million euros (around $27.1 million) for both phases. Its amortizations will start in 2029. The interest rate is three percentage points below the base interest rate, defined by the Ministry of Finance Finland (currently 3.75 percent) or at least 1 percent.
Looking at the bigger picture, the project supports scaling Spinnova’s technology sales—a new focus for the Respin co-owner, given a fiscally-discouraging 2023 and an “eventful” first half of 2024.
“Spinnova focuses on technology sales and delivering the technology together with its partners, which is expected to be the fastest way to ramping up production capacity of Spinnova fiber,” the Finnish firm said in an updated strategy statement. “Those sales focused on where the most value could be derived: upstream raw material partners and downstream textile manufacturers. “The value of the Spinnova technology to technology sales customers will be magnified by a strong focus on technology development and adoption of the fiber in the textile industry.”
The project also plays into Spinnova’s plans for lowering capital and operational costs, as detailed during the company’s Capital Markets Day in March.
“Spinnova has previously stated that no additional external financing is required for Spinnova to achieve its strategy targets,” the Adidas collaborator reiterated in a statement. “This statement remains in place as this R&D loan is intended for a specific R&D project and has no dilutive effect on shareholders.”
