NAT Continues Crailar® Fiber Development, Plans Plant Construction

Crailar® Fiber Technologies Inc., a wholly owned subsidiary of Canada-based Naturally Advanced Technologies Inc. (NAT), has signed a Phase II Joint Collaboration Agreement with the National Research Council (NRC) of Canada in order to further develop Crailar eco-friendly enzyme technologies for the processing of bast fibers such s hemp and flax for the textile market. The agreement will enable NAT and the NRC to continue a research and development partnership, formed in 2004 through an initial joint collaboration agreement with the NRC Institute for Biological Sciences, through May 2010.

Plans call for the investment of more than CAN$3.5 million (US$3.4 million) in research, development and commercialization of Crailar products. NAT will hold an exclusive worldwide license from the NRC to intellectual property, including a patent application for hemp fiber extraction, developed under the agreement.

NAT also plans to begin construction this year on its first Crailar manufacturing facility, to be built according to Canadian Green Building Council guidelines on an 80-acre site in Craik, Saskatchewan. The plant will be a primary processing facility utilizing patent-pending decortication technology developed in collaboration with the Alberta Research Council, and also will conduct secondary processing of hemp fiber for apparel, carpeting, home furnishings and basic composite end-uses. It is expected to have an annual production capacity of 114 million pounds of feedstock fiber, which will be processed primarily using renewable utility resources. Production startup is scheduled to begin in the first quarter of 2009.

January 29, 2008