Thoughts On: Renewcell
We really like Jasmin Malik Chua’s story on Renewcell and are sharing it for those who did not see it. To be clear, we mean we don’t like what the story is about, but we like how she explained what happened to Renewcell.
Tick Tock: Renewcell Has Less Than 2 Weeks to Find a Buyer
I was around in 1992 when Courtaulds first launched a new fiber called Tencel. Some companies were early adopters of this new fiber but Tencel didn’t really catch on for 20 years. I think that’s fairly common for any new fiber. It takes time to develop and introduce a new fiber and it takes time to ramp up to significant industry adoption.
I’m not sure what the founders at Renewcell were thinking. I guess the strategy was to ignore history and cross fingers, spend marketing money for something that had almost no probability to succeed in the limited time frame given.
And then there was this Alice in Wonderland plan to count on the brands to dish out enough orders to rocket baby Renewcell from incubation to adulthood. The timeline seems unrealistic. But maybe there were promises made but not kept.
The truth is the brands did not do what they said they would do and, once again, are not held accountable. There is plenty of brand and retail profit in our industry so there is no excuse for the lack of uptake on commercial agreements.
Meanwhile, the supply chain stepped up to support the birth and baby steps of this new sustainable fiber. Unfortunately, the effort was not equally shared and it’s the rich part of our industry — the ones with all the manuals and rules and requirements for the rest — that did not keep its word.
It’s still unclear if this is truly the end of Renewcell or maybe it’s just a rough patch of the beginning (for me, I hope it’s the latter). Ultimately, CEO leadership is at fault. Great idea, great intention, bad implementation, bad idea to hire people and put them into can’t-win situations and really bad idea to waste supply chain partners’ time and money. Bad idea, as one expert told me, to go public and subject themselves to “the mercy of the stock market.” Bad idea to publicly humiliate the brand with failure that might have been prevented with a little foresight and more complete understanding of what it takes to launch a new fiber in our industry.
It’s terrible that this happened, especially when it didn’t have to. But it would be even more terrible if it prevents companies from investments like this in the future.
The story is definitely unfolding in real-time.
Today (March 6, 2024), H&M Group and purpose-led investor Vargas Holding announced the launch of Syre, a new recycled polyester fiber made from recycled textiles, rather than plastic bottles, which currently make up most of the recycled poly market. Syre is backed by TPG Rise Climate, a division of alternative investor TPG, which manages $222 billion in assets. According to the announcement, H&M committed to an offtake agreement with Syre worth $600 million over seven years.
And Syre will need “a couple of billion dollars” to build a dozen factories in North America, southern Europe and Asia, according to Syre CEO Dennis Nobelius.
Nobelius said the company will eventually turn to other fibers, including cotton as an “obvious” target since it accounts for more than 20 percent of the world market and about 60 percent of H&M’s needs (compared with polyester’s 20 percent).
It all begs the question, will Syre allow Renewcell to die or buy them?”
-Andrew Olah
