Naturally Advanced Announces Key Developments In Production Of CRAiLAR

VICTORIA, B.C. and PORTLAND, Ore. — March 13, 2012 — Naturally Advanced Technologies Inc. (“NAT” or
the “Company”) (TSXV: NAT) (OTCBB: NADVF), which produces and markets CRAiLAR(r), a natural fiber
made from flax and other bast fibers, announced key developments this week toward advancing its
first full phase of production in order to supply its CRAiLAR fiber to global partners.

Step Change Increases Capacity, Opens Opportunity for Third-Party Manufacturing

In 2011, the Company embarked on a yearlong effort to optimize production of its CRAiLAR
technology. The resulting process improvements effectively reduce the enzymatic process time by 40
percent, thereby significantly reducing the overall CRAiLAR fiber cycle time. This reduction in
process time significantly increases production capacity in each planned manufacturing facility.
More critically, the CRAiLAR optimization allowed NAT to evaluate third-party manufacturing
partners for that process, which will further increase overall production volume and accelerate
growth of its flagship product, CRAiLAR Flax fiber.

“This milestone is the culmination of the last year’s efforts of our innovations team, led by
Jason Finnis, our CIO,” said Ken Barker, CEO of NAT. “Intended as a strategic initiative that would
maximize the volume capability of our first facility this year, it’s now apparent that the
improvements in efficiency and resultant economics of our CRAiLAR process allows us to consider
third party manufacturing as a critical option in our expansion plans.”

Partnership Inked with Tintoria Piana

As a result of this optimized process, Tintoria Piana entered into an agreement to execute
the CRAiLAR enzymatic process exclusively for NAT, augmenting the Company’s plans for manufacturing
capacity. The agreement calls for Tintoria to commence production in Q2 2012. Tintoria’s history in
textiles dates to 1582 in Biella, Italy. The privately held, family-owned business has dyed fiber
for the traditional apparel business for more than 60 years, and operates principally out of
Cartersville, Georgia in North America.

“This move would be consistent with most other branded global industries, where outsourced
manufacturing allows for faster expansion of the technology proposition and resulting brand message
for our partners, while significantly reducing the capital requirements to scale up to meet
demand,” Barker added.

New Facility Leased in Florence County, South Carolina, Governor Nikki Haley Welcomes
Company to the State

Additionally, NAT plans to open a facility in the 143,500 square foot Delta Mills Cypress
plant on Old River Road in Pamplico, South Carolina. An initial USD $8 million investment that will
create 25 jobs is expected as part of the Company’s establishment of production facilities there.
Flax, grown as a winter crop in Florence and surrounding counties, will be processed out of NAT’s
new facility in Pamplico, S.C.

“We are constantly working to bring investments and jobs to all areas of our state, but it’s
always exciting to see a company invest in one of South Carolina’s rural areas. We celebrate
Naturally Advanced Technologies decision to locate in Pamplico and create 25 new jobs,” said South
Carolina Gov. Nikki Haley.

NAT finalized plans this week for a long-term lease with an option to purchase the building,
and its full execution is contingent upon tax and job creation incentives in review with Florence
County. A first hearing took place on February 16 and a second is scheduled for March 15. A final
environmental and incentives review is scheduled for hearing on April 19 and would complete the
process. The South Carolina Coordinating Council for Economic Development approved a set aside
grant for $263,500 for building upfit and job development credits, which will be available when
hiring targets are met.

“South Carolina has a strong history in the textile, advanced materials and agribusiness
sectors, and today’s announcement builds on all three. Every one of these jobs will have an impact
in Pamplico and we appreciate Naturally Advanced Technologies’ decision to do business in South
Carolina,” said Secretary of Commerce Bobby Hitt.

“On behalf of the State of South Carolina, I would like to congratulate Naturally Advanced
Technologies for their commitment to Florence County. As the State Senator and a resident of
Florence County, I am thrilled to see another new capital investment and an increase in jobs. This
company has enormous growth potential here in South Carolina,” said state Senator Hugh K.

NAT’s 2011 business activities included purchasing agreements with HanesBrands,
Georgia-Pacific and Brilliant Global Knitwear, along with development agreements with Levi Strauss
& Co., Cintas, Carhartt, Ashland, Westex, and Target. The first commercial result, with Hanes,
received recognition this month.

“We are proud to see our investments and hard work beginning to pay off in the form of the
production of CRAiLAR for commercial use. We’re particularly excited that Hanesbrands, our first
production partner for CRAiLAR, is being recognized this month for its sustainability efforts by
the U.S. Environmental Protection Agency, and that it cited the use of our flax fiber in its
EcoSmart socks, which will be available at retail in April.”

“We thank the State of South Carolina, Florence County, and all those who helped to establish
the Company’s presence in South Carolina,” said Barker. “The establishment of our first full-scale
production facility, alongside our new partnership in neighboring Georgia through Tintoria, gives
us a foothold in one of the most important agricultural and manufacturing regions in North America.
We look forward to further establishing our commercial, agricultural and civic partnerships there.”

For additional information contact the Florence County Economic Development Partnership at
843-676-8796 or

Posted on March 13, 2012

Source: Naturally Advanced Technologies Inc.