Crailar Technologies Inc.'s board of directors has formed a special committee to oversee a review of the company's strategic and financial options. The company, which has partnered with Adidas Group, Levi Strauss & Co. and other companies to commercialize its bast fiber technology for use in textiles, said the special committee is comprised of the three independent members of its board.
Crailar said it is currently seeking to reduce operating overhead in all locations, and right size the manufacturing of Crailar fiber as soon as feasible. It is also continuing to negotiate a replacement Material Purchase Agreement contract with Georgia Pacific, having been provided notice that its existing contract will terminate on November 22, 2015. Crailar said there are no assurances or guarantees that the negotiations will result in a new contract.
Crailar reported sharply lower losses on a three-fold increase in sales in the first quarter ended March 28, according to its most recent earnings report.
Based in Victoria, British Columbia, Crailar is focused on bringing cost-effective, sustainable, bast fiber-based products to market that are environmentally friendly natural fiber alternatives with equivalent or superior performance characteristics to cotton, wood or fossil fuel based fibers. The company's patented process effectively cleans and polishes raw bast fiber, such as flax, hemp, kenaf and jute bast fibers, into fiber substantially equivalent to ginned cotton.
To commercialize its technology, Crailar has entered into development and supply agreements with some of the world's largest fiber consuming companies, such as Adidas AG, Georgia-Pacific, IKEA, Lenzing and Levi Strauss & Co. Its agreements with certain customers contain category exclusivity clauses that require them to purchase, in the aggregate, approximately 8.5 million pounds of Crailar Flax fibers in 2015 and approximately 10.1 million pounds in 2016 (when multi-year requirements are averaged to an annual amount) in order to retain their exclusive rights.
