You should read the Renewcell thread; it covers many of the same topics that concern Spinnova. I also noted that Renewcell is currently valued at a P/S ratio of 714.
I want to highlight this price table from there. Where will Spinnova’s product position itself in terms of price among these textile fibers? Personally, I’m a bit skeptical that mere ecological friendliness is a sustainable sole selling point for a product in the long run. In the long term, Spinnova’s pulp textile fiber should also be able to compete in price with cotton, polyester, and other clothing fibers, because consumers will always buy the cheapest rag when ethical concerns are forgotten, at the latest, at checkout. Therefore, a price premium will not last in the long term. The CEO commented on this in today’s Helsingin Sanomat (Hesari)
Suomalaiskeksijät kehittivät ratkaisun, joka voi mullistaa vaateteollisuuden – ”tuotteen pitäisi olla kilpailukykyinen puuvillan kanssa” | HS.fi
ULTIMATELY, the most important competitive factors in the market are the fiber’s price and properties. New fibers compete, for example, with already established lyocell in the category of environmentally sustainably produced fibers.
Spinnova’s Poranen estimates that the product from the factory currently under construction will already perform well in the price competition against lyocell. The largest costs in Spinnova’s production come from the energy required for grinding the raw material and drying the fiber.
“But when we reach truly large volumes, the product should be competitive even with cotton. The goal is to increase production to one million tons per year during this decade,” he says.
The company’s goals are indeed ambitious. It aims for 50,000 tons of textile fiber by 2024 and one million tons of fiber by 2031. So, the goal is at least to grow extremely aggressively, as production would need to increase by 53% annually from 2024-2031 to reach that target. However, they seem to be serious about this goal: Keskisuomalainen reported yesterday that Spinnova and Suzano are already planning a second factory, to be commissioned in 2024, with a production capacity 50 times that of the one currently under construction.
If the price of Spinnova’s textile fiber is indeed the same as cotton’s current price in 2031, then one million tons would generate 1.5 billion USD in revenue. And if the price is at the level of Lyocell in the coming years, the 2024 target of 50,000 tons would generate 120-300 million USD in revenue, depending on how large a premium people are willing to pay for the product. It should be noted that this still lacks consideration for how these factories will be financed and whether there will be buyers for the product, and what kind of margins will actually be achieved in the end. The return on capital could, of course, be very poor after several funding rounds, production ramp-up, and price competition.
Furthermore, I haven’t quite grasped yet whether there are any real differences between fabrics made from Spinnova/Infinna/Ioncell/Kuura/Bio2™Textile/Biocelsos fibers, or if it’s only the manufacturing method that differs. Some leading fiber and textile expert from the forum could clarify this. If all these fibers can be marketed to consumers as ecological and sustainable, and all fabrics made from them meet the technical criteria of clothing manufacturers, then garment giants will probably choose the cheapest option. All these methods currently being developed solely in Finland will certainly not become established in use.
What has not yet been brought up in this discussion is whether the company’s technology platform could also enable the recycling of wool and leather textiles, and perhaps all other natural fibers, with a completely mechanical process, if I understand correctly? As I understand it, Renewcell and all other comparable recycling methods chemically separate the cellulose from the recycled cotton t-shirt into dissolving pulp, and dissolving pulp can then be made into new textile fiber using the desired method. However, this does not work for wool and leather, which are protein-based. In Spinnova’s technology, the t-shirt or leather jacket is merely shredded into sufficiently small granules, which are then pressed back into new textile fiber (there might be some other intermediate steps). The difference here is that what Spinnova does is more about physics and apparently based on rheology, while the technologies of other manufacturers are more about chemistry. This, in my opinion, is a significant difference because Spinnova’s technology is more broadly related to textile fibers and polymers in general and bypasses the hemicellulose dissolution step, whereas the other methods are, as I understand it, essentially tied to cellulose-based products and always recycle back into that dissolving pulp form. Introducing Respin: Spinnova and ECCO leather partner KT Trading create new circular textile made from leather waste | Spinnova // https://patents.justia.com/patent/20200362474
Here is the company’s original patent, which explains the operating principle, and it is also worth familiarizing oneself with: http://patent.prh.fi/pubserver/documentpdf.jsp?iDocId=71874&sDummyParam=.pdf
