Next-Generation Textile Fibre Innovation & Technology 2019-2020 Progress Report 2 - Contents Contents - 3

RGE04 GROUP CELLULOSIC FIBRE COMPANIES

VICE06 CHAIRMAN MESSAGE

082019 - 2020 MILESTONES

INVESTING10 IN PARTNERSHIPS & COLLABORATION

ACCELERATING16 IN-HOUSE R&D

INTERVIEW24 WITH PRESIDENT OF SATERI

FINANCIALS26 Contents 4 - RGE Group of Cellulosic Fibre Companies RGE Group of Cellulosic Fibre Companies - 5

APRIL Group is one of the Bracell is a leading manufacturer world’s largest, most productive of dissolving pulp and specialty and efficient producers of fibre, cellulose. From its eucalyptus pulp and paper with plantations RENEWABLE plantations in Brazil, Bracell’s mills and manufacturing operations in Bahia and Lençóis Paulista in Riau, Indonesia. APRIL PLANTATIONS produce a combined 750,000 manages over 440,000 hectares & DISSOLVING tonnes of pulp a year. It is currently of renewable plantations and embarking on an expansion project operates the world’s largest PULP that will boost its overall dissolving single-site pulp mill at 2.8 million pulp production capacity to 2.0 RGE Group of tonnes of pulp annually. million tonnes. Cellulosic Fibre Companies www.aprilasia.com www.bracell.com An Integral Part of the Textile Value Chain

RGE is a group of resource-based manufacturing companies with global operations. Founded in 1973, Asia Pacific Rayon (APR) is the Sateri is the world’s largest first fully integrated viscose producer of viscose fibre, a natural our purpose is to improve lives by developing staple fibre producer in Asia and sustainable raw material found resources sustainably. from forest plantations to in everyday items like textiles, viscose. Its 240,000-tonne mill, CELLULOSIC baby wipes and personal hygiene As a supplier of cellulosic fibres, our fibre-related which is co-located with APRIL products. Its five mills in China in Riau, Indonesia, uses the FIBRE produce about 1.4 million metric businesses are integrated vertically from sustainable latest production technology to tonnes of viscose fibre yearly. It plantation management to textile fibre and produce high-quality viscose also operates Linz yarn spinning fibres to meet textile needs. mill in Nanjing, and a 20,000-tonne yarn production. Lyocell facility in Shandong. www.aprayon.com We are the world’s largest producer of viscose fibre www.sateri.com with strong presence in Asia where textile demand growth intersects with the textile production hub, presenting a real opportunity to drive change. Asia Pacific Yarn (APY) is a fully Linz (Nanjing) is a maker of high- Our deep expertise in the cellulosic fibre business integrated viscose staple fibre quality viscose yarn products and integrated capabilities allow us to have full yarn manufacturer, located in Riau, that are exported worldwide. Indonesia alongside APR. APY Set up in 2007 and acquired control over product quality, accelerate scalable applies the latest yarn spinning by Sateri in May 2016 as part innovation through practical industry collaboration, technology to produce an annual YARN of its strategy to be closer to capacity of 7,560 metric tonnes customers and improve quality, and mitigate supply chain risks. of high-quality yarn products or the advanced mill has open- equivalent to a total converted end, vortex and compact Siro capacity of 32,000 spindles with spinning technologies with a open-end-rotors, ring spindles and total converted capacity of vortex positions. 50,000 spindles. 6 - Vice Chairman Message Vice Chairman Message - 7

Vice Chairman Message

At RGE, we’re in the business of This report covers how we across the industry. We believe this US$200 million resource-based manufacturing. have accelerated our R&D kind of openness to collaborate is into next-generation textile fibre innovation over What does that mean? and innovation efforts to drive needed to help drive real change. the next 10 years From nature’s resources, we the development of ground- While we have advanced rapidly manufacture raw materials that breaking solutions in alternative in a fairly short period, and under can be found in essential items cellulosic feedstock and clean challenging conditions of a global 20% used by millions around the manufacturing technology in the pandemic, the work is still far from pilot-scale production world each day: paper, clothing, 12 months since we announced done. As we enter a new decade, to commercial scale medication, wet wipes, margarine, our commitment to invest. Some we pledge to hasten our efforts shampoo, and many more. of the more notable developments towards next-generation textile include the launch of recycled fibre Allocation We pride ourselves on the fact that fibre solutions. FINEX™, inaugural production of the virgin resources we draw on Lycocell, and new R&D facilities in By 2023, all existing mills of Asia to make these important products China and Indonesia. Pacific Rayon (APR) and Sateri will possible are renewable. But that meet the emissions limits set out 10% does not mean we rest on our In addition to pursuing greater by EU BAT (European Union Best 70% R&D in emerging laurels. In fact, we are taking our environmental outcomes through our frontier solutions Available Techniques). clean technology in sustainability commitment to the integrated upstream operations, fibre manufacturing next level by exploring how waste we are taking a comprehensive Sateri is set to have a product with can also be used as a resource to approach to achieving circularity. 50 per cent recycled content by generate new materials and give We are investing in our own R&D 2023, and to reach 100 per cent rise to a circular economy. to help innovate new concepts and by 2030. It also aims for 20 per technologies that address the fashion cent of its feedstock to contain We formalised this approach industry’s waste loop. Our R&D alternative or recycled materials Investment Approach in October 2019 at the Textile team has embarked on research into by 2025. APR will source 20% of Exchange Sustainability Conference cotton textile waste recycling. its feedstock from alternative or in Vancouver, when we announced recycled materials by 2030. a commitment of US$200 million At the same time, a concerted into next-generation textile fibre effort across the industry is We look forward to sharing new innovation over the next 10 years, needed to effect systemic change milestones with you in the near future. split across three areas: 70% to the way the world produces towards scaling up proven clean and consumes. Many of our Investing in Sourcing ready In-house R&D technology in fibre manufacturing, breakthroughs this year were Bey Soo Khiang start-ups solutions capabilities 20% towards bringing pilot-scale achieved through collaboration. production to commercial scale, It is through partnerships like these October 2020 and 10% towards R&D in emerging that we create a multiplier-effect frontier solutions. on the innovative capital built up 8 - 2019 - 2020 Milestones 2019 - 2020 Milestones - 9

Milestones 2019-2020

August 2020

of 3existing Sateri5 viscose mills June 2020 verified EU-BAT Compliant 2 Patents Filed on Conclusion October 2019 of 3-year Cotton Textile Waste Programme with Donghua University October 2020 Launch of FINEX™ Unveiled as Established progressive Marquee Brand for targets at product and Investment$200m Commitment Recycled Fibre feedstock levels

March 2020 April 2020 May 2020 September 2020

Breakthrough in Commitment to Lyocell Production New R&D Innovation Centre Commercial Production EU-BAT compliance for Commences in Opens in Shandong, China of Recycled Fibre in Sateri’s existing viscose Shandong, China Partnership with Södra mills by 2023 Pulp to Viscose Pilot Line Completed in Riau, Indonesia 10 - Investing in Partnerships & Collaboration Investing in Partnerships & Collaboration - 11

Investing In Partnerships & Collaboration

Our Investment Process and Considerations 33% Impacts of COVID-19 To support our investment commitment, we Funds complemented our R&D team with a dedicated In-depth Discussion + Trials The COVID-19 global pandemic has investment function with personnel recruited from In-depth Discussion the private equity and venture capital industry. disrupted the fashion and textile sector, impacting players large Engagement Only The investment function supports RGE in sourcing investment and small. Travel restrictions have and partnership opportunities, facilitating collaboration with impaired our ability to conduct face- innovative technology companies in areas of alternative feedstock and clean manufacturing. to-face meetings which are critical for complex technical projects. Over the past 12 months, we have explored potential Types of Technologies collaboration with about 30 companies and funds that are For early-stage innovators, the focused on sustainability in the fashion supply chain. The impact is more acute as trials and technologies provide solutions in alternative cellulosic feedstock other collaborations come to a near ranging from textile-textile recycling to microbial and agricultural halt. Their fundraising efforts have waste, as well as clean solvents. also slowed down as private equity We also worked with other investors actively investing in similar investors are cautious in a global technologies to evaluate projects that could benefit from RGE’s economic downturn. support. We thank organisations like Fashion for Good and others who have introduced innovators to us. 67% 33% While we believe the pandemic Companies While we remain committed and optimistic on our innovation journey Textile has and will negatively impact our working with a diverse group of early-stage technology companies, 45% Recyling investment and partnership activities, we recognise the complexity, time and capital intensity in scaling up Alternative we remain committed to invest new technologies within our sector. Our goal is singular: achieving financial and human capital to drive commercial scale where possible to be cost-competitive, while Feedstock toward our sustainability goals in new maintaining or improving on consistency in quality. innovative technologies. Our investment review process takes into consideration various factors that include founders’ vision and mission, pathway to commercialisation, scale-up risks, and overall fit with our existing 22% operations and long-term business model. Alternative Solvent The investment process combines investment discipline with our deep industry knowledge that includes a Technology Readiness Level (TRL) framework. This framework provides our team clarity on technical risks, and also informs us how we may support and complement a potential investee and technology partner with our internal know-how. 12 - Investing In Partnerships & Collaboration Investing In Partnerships & Collaboration - 13

Private Sector Public Sector

Infinited Fiber Company Re:newcell Donghua University Aalto University

RGE joined a group of investors including H&M A Memorandum of Understanding with Re:newcell Sateri and Donghua University initiated a joint Under full sponsorship by the company, two of our staff Group, Virala and Fortum to help Infinited Fiber was signed in May 2019 for technical cooperation programme in September 2017 to study the members were accepted by Aalto University in 2019 to Company scale up its technology that turns and trials. Since then, we have trialled Re:newcell’s optimisation of cotton textile waste as a feedstock pursue their post-doctoral research studies under the textile waste and other cellulose-based materials Circulose pulp, recycled from cotton textile waste, in viscose manufacturing. Donghua University, tutelage of renowned academic, Dr Herbert Sixta. into new textile fibres. A strategic cooperation in both our viscose mill in China and dissolving pulp formerly China Textile University, has a rich heritage The Finnish University is a leader in material science agreement was also signed between RGE and mill in Indonesia. of research in textile-related disciplines. and engineering, including research in frontier Infinited Fiber Company to commercialise the While viscose fibres comprising varying percentages, The collaboration combines the inherent strengths of technology in developing solvents and green chemistry Finnish startup’s technology. up to 20%, of Circulose pulp have been successfully Donghua University with Sateri’s expertise in viscose used in Ioncell and Lyocell fibres. This mutually In February 2020, Infinited Fiber Company opened its produced, trials remain underway with a focus of assuring production processes. On conclusion after three years in beneficial collaboration has helped strengthen RGE’s new pre-commercial 150-tonne per annum plant and performance consistency and quality. Discussions with August 2020, the programme had moved from lab trials in-house R&D capability in clean manufacturing customer training centre located in Valkeakoski city, Re:newcell to offtake a sizeable pulp volume from their to pilot testing and resulted in two patents filed jointly. technologies while our staff have contributed to the Southern Finland. This is a leap from the 50-tonne new commercial plant in 2022 are ongoing. University’s rich body of research work and literature. per annum pilot plant in Espoo, Finland, that Infinited Fiber Company has operated since early 2018.

Infinited Fiber Company’s technology of using recycled feedstock and a green chemistry process in a circular fashion to produce fibres, aligns well with RGE’s goals and existing operations. Södra China Association of Circular Economy VTT Technical Research Centre of Finland

Following a visit to our pulp and viscose facilities in Sateri achieved a breakthrough in the commercial Sateri is in discussion with the China Association of APRIL joined VTT Technical Research Centre of Kerinci, Riau, Indonesia in February 2020 by Infinited production of viscose made from recycled post- Circular Economy (CACE) to commission a study on Finland and 51 other companies in a three-year Fiber Company CEO Petri Alava, we have entered consumer textile waste by Swedish company the recycling and utilisation of textile waste in China. ‘Piloting Alternatives for Plastics’ project which seeks into discussions with Infinited Fiber Company on Södra, and other PEFC-certified wood pulp. The study, which will commence in early 2021, will to accelerate new generation fibre products towards its technology roadmap and fundraising needs Södra’s OnceMore™ technology is a world first analyse the output, utilisation, demand, investment industrial scale production. for expediting commercialisation. A joint project in the separation of blended fabrics and recycling risks and regulatory landscape of the textile waste Among the piloting targets are fibre-based materials to in China to explore retrofitting viscose production of textiles from post-consumer waste. A senior industry in hopes that the comprehensive study replace plastics used in textiles, wiping, hygiene and with Infinited Fiber Company’s cellulose carbamate executive exchange and visit to Södra’s mill is will inform the industry on strategies to unlock the construction materials. The project is backed by EUR6.7 technology may materialise in the near term. planned for after pandemic travel restrictions lift. potential of textile circularity in China. million funding from the European Regional Development Fund (ERDF), VTT and participating companies. 14 - Investing In Partnerships & Collaboration Investing In Partnerships & Collaboration - 15

In Conversation with Petri Alava CEO of Infinited Fiber Company

Where did the inspiration for Infinited new and totally unique textile fibre plan going forward is definitely to inspiring. The barriers, on the Fiber Company and its cellulose from used textiles is revolutionary! boost capacity. other hand, are rather prosaic: Our cofounder Ali Harlin has been we need upfront investments carbamate technology come from and Our technology can be used to researching cellulose for years, into production lines to scale the what have been the key developments retrofit existing pulp-based fibre and his eureka moment came technology. While the revenues are over the past year? production lines relatively easily, when he tossed his old jeans into expected to be substantial both so this is a cost-effective way Infinited Fiber Company was founded in 2016 to the process. in real terms as well as in human for viscose producers like RGE commercialise a breakthrough technology that and environmental gains, it’s not We’ve done a lot over the past year! to convert production capacity enables discarded textiles, used carboard and easy to change the established We set up a factory to produce to cellulose carbamate fibre other cellulose-rich feedstock like agricultural processes and investment cellulose carbamate powder at production. And we see that as refuse to be regenerated into high-quality traditions of an entire industry. a bigger scale. We also ran our an important avenue for boosting textile fibre that has the soft, natural look and pilot production continuously for production capacity: the licensing How do investors and industry feel of cotton. It is biodegradable 72 hours, demonstrating that it is of our technology to partners like partners like RGE feature in and can also be recycled over and possible to achieve the continuous RGE. At the same time, we are also Infinited Fiber Company’s over again, preserving 100% of production of a high-quality fibre exploring other potential options plans and goals? the quality. The fibre is very unique with stable characteristics using for scaling up cellulose carbamate given the wide range of possible We cannot revolutionise the our process. Our R&D team fibre production with a range of feedstock options as well as the textile industry on our own! Our have been busy, testing various potential investors and partners. consistent quality and unique technology enables circularity and feedstock options and other novel properties, like its very high What barriers and acts as one of the major pieces ideas, and also refining our main dye uptake and cotton- opportunities do you see to that has thus far been missing process and chemistry to prepare like characteristics. The scaling your innovation? from the equation. We already see for commercial-scale production production process great interest and high demand very soon! The opportunities are huge. is also unique as it is for our fibre from global fashion We have the solution to enable organic solvent-free, What achievements to date brands, and from yarn and fabric the textile industry to live up to making it safe and would you like to highlight and producers. But we need the entire its promises and ambitions of sustainable. We use urea, what immediate plans or goals industry’s buy-in to truly make a circularity and sustainability. We a naturally occurring and do you have going forward? difference. Partners and investors have the technology that enables safe compound, to activate like RGE are hugely important to We are extremely proud that textile waste to become valuable the cellulose fibres of the our plans for scaling production several of the world’s biggest yarn feedstock rather than a problem feedstock and turn them and for establishing Infinited Fiber and fabric manufacturers and at landfills and a contributor to into a cellulose carbamate Company’s unique regenerated many of the leading global fashion greenhouse gas emissions as powder that is then cellulose carbamate fibre as the brands have tested our fibres in incinerated waste. Our technology dissolved to a honey-like number one sustainable choice different types of yarn and textile also eliminates the pressure on liquid and spun into new, for consumers. The commitment applications, and found them to virgin fibres like cotton, which use cotton-like fibre that is of our partners and investors meet their brand and consumer up a lot of agricultural land that ready to be used by the to acting on their ambitions of performance requirements. This is could otherwise be used to grow textile industry. sustainability and committing great news for us, as it validates food, water that could otherwise to the use of sustainable Cellulose carbamate what we are doing. We are now in quench thirsts, and pesticides, technologies and processes is technology as such is not a situation where we have more which pollute land and waterways absolutely crucial. Together we that new – but our patented demand for the fibre than we are and are harmful to people. So, can really make some magic! technology for using it to create able to produce in our pilot, so the the opportunities are huge and 16 - Accelerating In-House R&D Accelerating In-House R&D - 17

Accelerating In-House R&D Capability In Textile Fibre Innovation

RGE has developed strong in-house Research and Development (R&D) capabilities over many years. We have about 730 staff members involved in fibre R&D functions across Brazil, China and Indonesia.

Our R&D efforts have traditionally focussed on R&D infrastructure and other capabilities but enhancing quality and productivity in our operations also embarked on new R&D projects towards and products. In forestry management, for example, this direction. our research emphasis is on silviculture and Our capabilities in this area are still nascent intensifying land use and fibre yield. In manufacturing, by industry standards but we are committed we focus on projects such as introducing value-added to accelerating our learning and journey to features like anti-bacterial and traceability to enhance success. Our key advantage is the possession our existing products. of expertise across dissolving pulp, viscose, Today, we have 99 staff members involved in textile lyocell and yarn spinning in different parts of fibre-related industrial R&D, including 11 with PhD our businesses and locations. and post-doctoral qualifications and 15 with Masters The potential and value of integrating our Degrees from various nationalities. competencies and harnessing synergies With the commitment to invest in the development are already being unlocked, evidenced by of next-generation cellulosic textile fibres that are achievements in the past year. closed-loop, circular and climate-positive, we have in the past year not only strengthened our in-house

1 PhD 1 PhD 1 Masters 1 PhD 1 Masters 1 Masters 1 Post-doc

4 PhD 1 Post-doc 1 Masters 2 PhD 1 Masters 1 Masters 4 Masters 5 Masters 18 - Accelerating In-House R&D Accelerating In-House R&D - 19

Sateri introduced FINEX™ as its marquee brand for per annum commercial production line means that we Our development of Lyocell was planned in In May 2020, Sateri completed its first 20,000-tonne per fibres containing recycled content. are capable of scaling up production to respond to anticipation of the expiration of related technology annum line and commenced Lyocell production in Rizhao, market demand. patents in recent years. Over an intensive period Shandong, China. We plan to expand Lyocell production In August 2020, Sateri obtained the Recycled spanning nine months, our R&D team researched, in other parts of China over the next two years. Claim Standard (RCS) certification which provides Equally notable is the high quality of FINEX™ acquired production know-how, and planned for the verification of recycled materials through the supply fibres which are compatible with existing spinning infrastructure to produce Lyocell. chain. Sateri has successfully produced FINEX™ technologies, ensuring stable yarn production without viscose fibres with up to 20% recycled content. the need to adjust existing processes or parameters, Lyocell is manufactured using closed-loop technology, Capacity and delivering excellent spinning efficiency, yarn requiring minimal chemical input during the FINEX™ was officially launched on the sidelines of evenness and tenacity. production process, and utilising an organic solvent the Intertextile Shanghai Apparel Fabrics expo. 20,000 that can be almost fully recovered and recycled. tonnes/annum Our ability to produce FINEX™ using a 35,000-tonne up to Potential 20% Production Capacity Recycled 35,000 Content tonnes/annum 20 - Accelerating In-House R&D Accelerating In-House R&D - 21

New R&D Facilities

We opened a multi-storey R&D Innovation Centre in Shandong China in September 2020 which features a 5,000 ton per annum Lyocell production line dedicated for pilot trials, and other imported state-of- the-art equipment.

The Centre’s activities will focus initially on laboratory tests for pulp selection, new and differentiated fibre product development, and quality and productivity improvements in Lyocell production. In the near future, the Centre will undertake projects to explore frontier next-generation textile fibre solutions and other related downstream innovation.

In Kerinci, Riau, Indonesia, we built a new fully automated viscose pilot plant. The plant closely simulates the entire viscose manufacturing production on a much smaller scale, enabling more efficient testing of new products and production techniques.

When operational by end 2020, the pilot line will focus on developing new products from existing raw materials and test out new sources of fibre from recycled textiles and agricultural residuals.

Alternative Feedstock Projects and Trials We initiated a cotton textile Our R&D teams in China and Indonesia conducted Similar to our planned partnership with the China more than 30 trials on non-wood cellulosic feedstock Association of Circular Economy, we are actively waste project to help our (‘alternative feedstock’) samples received from seeking interested parties to conduct a comprehensive external parties. These are in addition to the trials our study of the textile waste landscape in Indonesia to R&D team better understand teams conducted with Infinited Fiber Company, Södra inform strategies in overcoming this challenge. and Re:newcell. Through our trials, we have encountered known the textile-to-textile We initiated a cotton textile waste project to help our challenges in textile-to-textile recycling technology R&D team better understand the textile-to-textile such as removal of dyes and separation of blended recycling process. recycling process. fibres. There is also the challenge of controlling non-process related elements like silica and metals Pre-consumer cotton waste obtained from Indonesia in viscose production. and Singapore have been trialed and the results have been encouraging, with potentially up to 50% Our insistence on quality means we have to recycled content in viscose produced at good quality. consider not just how the pulp performs in our viscose production process, but also how the The same investment review process and fibre will be compatible with the processes of our considerations apply to our in-house projects. downstream customers. While a roadmap to realising a full in-house commercial solution by 2022 is being planned, we anticipate considerable challenges in sourcing sufficient volume of textile waste to scale up production. 22 - Accelerating In-House R&D Accelerating In-House R&D - 23

“RGE is evidently prepared to invest significantly in research and Driving the Future of Fashion: development – including investing in its employees to further this goal. Where Passion Meets Innovation I’m happy to support APR’s ‘From Plantation to Fashion’ vision, with textile production processes that are sustainable and constantly innovating.”

H’ng Yin Ying first joined APRIL to produce cleaner textile fibres. Motivated by her belief that “While the market is currently still dominated by to Indonesia to join Asia Pacific Rayon (APR) and in 2017, where she kickstarted Together with a Sateri colleague from cellulosic fibres, with its natural fast fashion practices, there is increasing pressure apply her technical knowledge. Under Dr Sixta’s her journey with the company as China, the two young researchers and renewable properties for the industry to be more sustainable, and fibre supervision, she will continue on her research project a researcher based in Pangkalan were fully funded by RGE on a that can enable a closed-loop sustainability and recyclability are the key to this,” exploring the use of clean solvents in textile fibre Kerinci, Riau, Indonesia. year-long post-doctoral research manufacturing process, will drive Yin Ying added. “RGE is evidently prepared to invest production through different technology processes programme at Aalto University. the future of fashion, Yin Ying significantly in research and development – including like Ioncell and Lyocell. She knew she wanted to make a used this opportunity to advance investing in its employees to further this goal. I’m difference, but what she did not “I was deeply honoured and “My parents and friends don’t understand the innovation and research in the field happy to support APR’s ‘From Plantation to Fashion’ expect were the strides she would surprised that RGE offered me complexity of textile production and my research. through the programme. vision, with textile production processes that are soon take in advancing the future such a huge opportunity to take up I explain that everyone knows pork lard is a key She is currently researching sustainable and constantly innovating.” of fashion. After just two years in a development programme, given ingredient to make the best tasting Char Kway Teow advanced textile fibre technology Kerinci, Yin Ying found herself in a it was such a short time since I’d Upon the completion of her Finland stint in October but too much pork lard can choke up your arteries. with a focus on cellulosic fibre at laboratory in Finland, investigating joined the company,” Yin Ying said. this year, Yin Ying is looking forward to returning What I am trying to discover is how to adjust the Aalto University, under the tutelage the application of green chemistry same ingredients and replace the lard with something of renowned industry expert Dr healthier so that the best tasting dish is still being Herbert Sixta. served at the same price for all to enjoy!”, she shared. “I was deeply honoured and The insights from the research will contribute to surprised that RGE offered the reimagination of fibre production as we know me such a huge opportunity it, working towards a sustainable yet high quality fashion-forward future. In Pangkalan Kerinci, Yin Ying to take up a development will have access to a new pilot plant in Kerinci that programme, given it was such allows simulation of the entire viscose production process to accelerate her work. a short time since I’d joined “I really can’t wait to return to work in Kerinci. We the company,” Yin Ying said. have already identified a list of priority projects in next-generation production and product development,” Yin Ying shared. “Needless to say, I feel fortunate right now to be adding to my existing knowledge and studying here in Finland.”

For now, Yin Ying is taking full advantage of her remaining months in Finland to immerse herself into the culture and life in Finland.

“Unfortunately, I don’t think I’ll be able to travel to other parts of Europe due to the ongoing pandemic. I am just thankful I was able to visit Iceland, Austria, Germany, Switzerland and France before Covid-19 while on my year-long stint here.”

Char Kway Teow is a famous fried noodles dish from Malaysia where Yin Ying was born. 24 - Interview with President of Sateri Interview with President of Sateri - 25

The company also says it is one of the world's first feedstock used in our ongoing efforts to close viscose mills to have completed the Higg Facility the loop. We hope our investment in textile fibre Interview with Allen Zhang Environmental Module (FEM) assessment. innovation and technology will yield a wider range of commercially viable options in the near future, Beyond these initiatives, Sateri also works closely including viscose-to-viscose textile recycling." President of Sateri with its downstream partners in yarn and garment manufacturing, particularly in carbon reduction. When asked about the challenges in regenerating Last year it initiated a Climate textile waste into new fibres, he highlights two Leading viscose fibre producer Sateri has kept its foot Our sustainability focus is in two hurdles. "The two main technical challenges for any Leadership Programme in collaboration with the firmly on the gas in recent months, with milestones that “key areas. First, we ensure we form of textile-to-textile fibre recycling are colour and China National Textile and Apparel Council (CNTAC) include starting production of lyocell fibres in China fibre separation. Most textiles today are made from to explore how product innovation at upstream and launching a new commercial scale viscose fibre source from sustainably managed a blend of fibres. Even a 100% cotton bed linen, for companies can help drive energy conservation and made from recycled textile waste – all in the midst of a instance, will have trimmings made from polyester.” plantations that are free from decarbonisation in downstream production processes. global pandemic. "Our insistence on quality means we have to consider deforestation. Second, we The company also works to communicate sustainability This is an excerpt of an in-depth interview with not just how the pulp performs in our viscose across the entire value chain. Examples include its Sateri President Allen Zhang published by just-style pursue circularity in our production process, but also how the fibre will be Tracer initiative, which links producer to consumer in September 2020. Full interview by Beth Wright is compatible with the processes of our downstream manufacturing operations.” by embedding the firm's fibres with a tracer that can available here. customers like yarn spinners. We set high parameters be detected through a scanner to give consumers because we believe that we should be upcycling Sustainable Sourcing the confidence that they are buying a garment that is rather than downcycling." authentic, and sustainably sourced and manufactured. As a raw material supplier, Sateri is at the critical start Techniques (EU BAT) standards by Scale and cost are two further hurdles to ramping up point of a sustainable value chain. 2023. Its facilities in Jiujiang Regenerating Textile Waste textile-to-textile fibre recycling. and Jiangxi were confirmed Its viscose fibres are made of wood cellulose from Sateri is also forging ahead to EU-BAT compliant "Consumers, particularly in the mass market segment, sustainably managed plantations – including fast- commercialise the production of viscose last month, following are generally reluctant to pay more for eco-friendly growing eucalyptus and acacia trees – which is incorporating post-consumer white verification of its Fujian products. While there are brand partners who are processed to remove lignin, a glue-like substance that cotton textile waste that uses dissolving mill in April. Other willing to invest in innovation and share costs, the binds fibres together, before being repeatedly filtered pulp made by Swedish company Södra achievements include bulk of the burden rests on manufacturers, so there is and washed to form dissolving wood pulp. This pulp and can be processed on existing the STeP by Oeko-Tex long-term risk in financial viability and an ever present is then dissolved into a viscous liquid and crystallised spinning technologies. The first apparel and Standard 100 by need for patient capital. Ultimately, cost is a function into regenerated cellulose threads. featuring the new FINEX™ fibre was Oeko-Tex certifications, of economies of scale. As a large-scale manufacturer, produced by outdoor brand Lafuma "Our sustainability focus is in two key areas. First, along with the Made we understand the importance of scaling up ahead of 618, China's major mid-year we ensure we source from sustainably managed In Green by Oeko- production in bringing costs down – our entry into online shopping festival. plantations that are free from deforestation. On this Tex product label China's lyocell market seeks to do just that." front, being part of a group of companies that is to verify its viscose While Zhang did not divulge the Other major challenges relate to policy and vertically integrated from plantation manufacturing to products are safe and percentage of textile waste that infrastructure. "In textile waste collection for fibre yarn spinning gives us a high level of oversight and responsibly produced. is used, he says Sateri is working recycling, for example, there are existing policies that influence over the upstream textile value chain. towards a higher percentage mix to Four of Sateri's limit or ban textile waste collection import and export. meet the 5% and 20% required by the "Second, we pursue circularity in our manufacturing five mills have also This is a pre-competitive area that industry actors will Recycled Content (RCS) and Global operations. This requires us to invest not only in best-in- obtained the Chain do well banding together to tackle," Zhang suggests. Recycled (GRS) Standards, respectively class technology for greenfield projects but also upgrade of Custody (CoC) in collaboration with Södra and other facilities of our existing and acquired mills to improve the certification from the dissolving pulp suppliers, as well as the use and recovery of chemicals, water and energy." Programme for the development of in-house solutions. Endorsement of Forestry The firm, which recently joined the UN Fashion Certification (PEFC), "Even though the technology to recycle Industry Charter for Climate Action, aims to have and are certified under cotton is currently the most advanced, we all its mills meet the European Union Best Available ISO 9001 and ISO 14001. remain agnostic to the type of recycled cellulosic 26 - Financials

Actual Expenditure (2019/2020)

Scaling up proven clean technology in fibre manufacturing

Bringing pilot-scale production to 62% 4% commercial scale*

34% R&D in emerging frontier solutions

In USD (million)

Scaling up proven clean technology in fibre manufacturing

Lyocell 20,000 ton production line 25.9

Bringing pilot-scale production to commercial scale*

FINEX™ 1.6

R&D in emerging frontier solutions

Sateri R&D Innovation Centre and 5,000 ton pilot line 11.8

Kerinci viscose pilot plant 1.4

2 x post-doc research sponsorship 0.8

Piloting alternatives for plastics research project 0.02

TOTAL 41.52

*Investment amount in Infinited Fiber Company is bound by agreement confidentiality. www.rgei.com RGE Group Inside RGE