Naturally Advanced Technologies, Ashland Announce CRAiLEX® Development

Vancouver, Canada-based Naturally Advanced Technologies Inc. (NAT) — a developer of biomass
resources from flax, hemp and other bast fibers — and Covington, Ky.-based Ashland Inc. — a
specialty chemicals manufacturer and solutions provider serving water treatment, paper products,
personal care and household, construction, architectural coatings, energy, pharmaceutical and other
markets — have entered into a two-year agreement to jointly develop CRAiLEX® high-grade dissolving
pulp for commercial applications.

NAT collaborated with Canada-based Alberta Innovates — Technologies Futures to develop an
environmentally friendly pulping process to make Crailex dissolving pulp from bast fibers cut to a
uniform 10-millimeter length. The patented process does not require the use of harsh chemicals or
costly equipment traditionally used to make kraft pulp. According to the company, Crailex exhibits
superior properties compared with traditional high-quality dissolving pulps, and can be extruded
into yarn for performance apparel or used as a base to make biodegradable plastics, and paper
towels and other consumer products. Ashland will use Crailex pulp derived from both flax and hemp
to develop a line of cellulosic products for a range of applications.

“This is the start of our Crailex technology roll out,” said NAT CEO Ken Barker. “In the same
manner and strategy we employed to bring our CRAiLAR® technology to commercialization, partnering
with an industry leader such as Ashland Inc. is a key milestone in the development of Crailex. We
are extremely proud of the opportunity and partnership potential in working with Ashland.”

NAT’s Crailar technology is used to process bast fiber as a staple fiber for textile and
apparel uses. The company is currently ramping up its cultivation and processing of fiber flax and
has partnered with a number of companies to develop various textile and apparel products and bring
them to market
(See ”
Fabric Of The Month: Flax Unshackled
Textile World, May/June 2011).

June 14, 2011