The trend of casual activewear has done wonders for many apparel companies around the world, but it’s also come at a cost due to the scarcity of materials that are both stretchy and durable. Tackling this, sustainable materials company Ecofibre (ASX: EOF) has been engaged by sportswear giant Under Armour through a major supply agreement that will see Ecofibre provide its NEOLAST yarn to Under Armour’s knitting mills.
What makes NEOLAST special?
NEOLAST is designed to address the sustainability challenges associated with elastane, more commonly known as spandex, which is a key ingredient in the stretchy fabrics that dominate the sportswear market. Spandex has become ubiquitous in activewear due to its flexibility, durability, and ability to return to its original shape. This has made it particularly popular for exercise clothing, where mobility and comfort are critical.
However, spandex has a significant environmental impact. As a synthetic material, it is made using petrochemicals and is not easily recyclable. Blended fabrics that include spandex often end up in landfills, contributing to the textile waste problem. This is where NEOLAST offers a sustainable solution.
Made from Celanese’s proprietary elastoester polymers, NEOLAST is produced via a solvent-free process, reducing its environmental footprint while still delivering the high-performance characteristics needed for athletic apparel.
Ecofibre’s role in the sustainability movement
Ecofibre addresses the growing demand for eco-friendly materials. The Company operates a diverse portfolio of businesses in the United States and Australia, focusing on sustainable polymers, natural healthcare, and hemp seed genetics. Its advanced manufacturing arm, Ecofibre Advanced Technologies (EAT), specialises in performance yarn extrusion, polymer compounding, and the development of sustainable materials, making it a key player in creating innovative alternatives like NEOLAST.
This agreement with Under Armour builds on an earlier Memorandum of Understanding (MoU) and follows months of rigorous knitting trials.
Ecofibre CEO Uli Tombuelt was delighted to finally consummate the deal.
“The performance and sustainability of this product is set to revolutionise the market for elastomeric yarn, and developing further growth opportunities for this product is a key priority for EAT.”
The initial term of the supply agreement is 3 years and is expected to generate USD $6 million in annual revenue for Ecofibre at full production.
Why spandex has ruled activewear for decades
The rise of spandex in the sportswear industry can be traced back to its unique combination of elasticity and strength. First introduced in the 1950s, spandex revolutionised fashion and sportswear by allowing for body-hugging designs that did not restrict movement.
The flexibility, combined with its moisture-wicking properties and ability to maintain shape, made it a favourite in athletic clothing. However, its environmental drawbacks have led to a growing demand for sustainable alternatives as consumers and companies alike look for greener options.
For the year ended 30 June 2024 (FY24), Ecofibre reported $29.6 million revenue which represented a 9% decrease on the previous year, however was marred by a $39.9 million net loss after tax due to impairments tied to inventory write offs and a $27.0 writedown of the TexInnovate business it acquired in August 2020.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, bloodstock enthusiast and former Analyst.
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