NAT Moves Forward On CRAiLAR® Flax Cultivation Expansion In South Carolina

Vancouver, Canada-based Naturally Advanced Technologies Inc. (NAT) — provider of CRAiLAR® enzymatic
technology for processing bast fibers — is making progress in its quest to expand its flax
cultivation capabilities in South Carolina.

The company has contracted Pamplico, S.C.-based Carolina Eastern Precision Ag to help it
recruit growers and contractors and provide advice related to NAT’s flax cultivation. First-year
plans call for contracting cultivation of more than 15,000 acres of flax as a winter crop — with
the harvested flax used first to supply Crailar Flax to Winston-Salem, N.C.-based HanesBrands Inc.
under a purchasing agreement announced earlier this year. NAT expects to have a production capacity
of 300,000 pounds of Crailar Flax weekly at a facility it plans to build by first-quarter 2012 in
Williamsburg County in the Pee Dee area of South Carolina.

“This announcement is a culmination of a two-year process that took a significant amount of
effort from South Carolina’s Department of Commerce, the USDA-ARS  [U.S. Department of
Agriculture’s Agricultural Research Service], Williamsburg County, and HanesBrands,” said Jason
Finnis, founder and COO, NAT. “We are confident in the experience and relationships that Carolina
Eastern brings to our team, and we anticipate that their team’s knowledge of the region, from both
the agronomic and economic standpoints, will allow us to quickly and smoothly ramp up production
demand to bring Crailar Flax to market.”

“Crailar Flax fiber is one of the most well-researched agronomic opportunities we’ve seen in
South Carolina in my entire career,” said Charles “Russell” Duncan, a former agricultural extension
agent with Clemson University and current chair of the International Certified Crop Adviser board,
who will head up Carolina Eastern’s activities covered by the agreement. “We are excited about the
opportunity we will be presenting in coming months and hope for a long-term opportunity to be
established among farmers looking for winter crop alternatives.”

In the course of a pilot program in which NAT worked with the USDA-ARS and HanesBrands, the
company identified flax varietals that provide optimal fiber yields for winter cultivation.

“As a winter crop, we found that South Carolina offers significant upsides to growing
varietals of flax that are needed to produce Crailar fiber,” said Dr. Jonn Foulk, a USDA-ARS
research scientist, who worked with NAT in the pilot program. “The climate is ideal, the
fertilization and weed control are minimal and the winter rainfall provides adequate irrigation.
Additionally, production in the southeastern U.S. has the potential to enhance rural economic
growth and to supply a natural domestic source of fiber to industries.”

July 19, 2011