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