PARIS — Circulose, the Swedish textile recycler formerly known as Renewcell, has brought on a new management team with chief executive officer Jonatan Janmark and chair Helena Helmersson, effective Dec. 1.
Taking on the name of its key product, the newly renamed Circulose emerged from the ashes of Renewcell, which declared bankruptcy in February. It found new investors in Swedish private equity firm Altor in June.
McKinsey & Company veteran Janmark and Helmersson, the former CEO of H&M Group, will join forces to increase market demand, build a more stable supply chain and partner with brands.
H&M had been long been a supporter of Renewcell, investing more than $29 million over seven years to get their factory off the ground.
As Renewcell, much of the company’s focus was to prove the technology, build the factory and scale up. It did so, and fast — the factory was opened in November 2022 as the world’s first industrial-scale chemical textile-to-textile recycling facility. It had a capacity to produce about 60,000 tons of pulp annually, and a target of 360,000 tons a year by 2030.
The company produced 6,498 tons of its pulp product in the third quarter of 2023, with nearly all of it being sold, which was about half of what it needed to sell to reach a break-even point. By the end of 2023, the company produced 2,043 tons of the fiber, but only delivered 129 tons to customers.
Renewcell had offtake agreements with big brands such as H&M and Inditex supplier Tanshang Sanyou, as well as Austrian materials company Lenzing, but it wasn’t enough, and its then-leadership called on big brands to buy more.
With these key hires in place, the Circulose team plans to focus on building up the market to stabilize demand and shoring up the supply chain — two stumbling blocks the first time around. That will in turn lower the price point, always a key sticking point for brands.
With the tech and production facilities in place, the team can now “focus a lot on just building the market and ensuring that we come to the market with a more attractive overall offering,” said Janmark.
“We’re working now with partners to align incentives and make sure we go to the brands with an attractive price point, as well as we’re moving from being a physical product pulp company into a solutions company where we will really help brands make the circularity shift.”
The team will work to add services to make purchasing simpler for brands, such as developing fabric libraries and working directly with design and product teams to integrate Circulose into their collections.
“Going from zero to 100 in such a short time with a completely new product with so many steps in the value chain was a very, very difficult thing to do. Now we’re in a completely different position where the product is proven,” he said.
Circulose has been featured in numerous capsule collections such as H&M’s Conscious Collection and collaborations with Zara.
For brands, Circulose will also launch traceability solutions and support compliance with upcoming regulations so that it is easier for brands to adapt.
It’s a cooperative approach. “We are really working with these brands on, how do we make this happen? How do we get over all of these hurdles?” said Janmark.
One of those hurdles was timing, said Janmark, as Circulose first hit the market post-pandemic when producers and brands were riding a supply-and-demand roller coaster.
In addition, Circulose’s pulp must go through several layers to get to the garment supplier level, each adding to the end cost.
This time around, brands have asked for more coordination and support across their very fragmented supply chains, which is one of the team’s main goals. Coordinating among the various steps, including fiber producers, yarn producers, weavers and spinners, and garment suppliers, will be key to keeping the price accessible.
“When we focus on price, really we focus on working with partners in the value chain to align incentives with us on building the market and getting the overall price low,” said Helmersson.
Initially they are working with a small set of brand partners, including several of the major global players that can commit to buying big volumes. There’s some expected overlap with former Renewcell customers.
They also hope to widen its use outside of small capsule collections and integrate across categories since Circulose can be used to replace viscose, which is made from trees, as well as cotton.
“Working together with the design teams, it’s actually a lot about implementing and integrating it into their fabric libraries, so that they start to use it for different designs and products,” added Helmersson.
The third major pillar of their new strategy is enhancing customer communication, so that Circulose becomes a more recognizable household name.
The corporate name change will help with that, as customers can more readily identify it. “It’s a strong brand name that we wanted to keep, so it was a natural choice,” said Helmersson.
Across the industry, brands have set more ambitious environmental targets for themselves, as well as preparing for the frameworks of coming regulations. Circulose is poised to be a key player in achieving those goals.
“We come with a solution where you don’t only have to do a capsule collection, we come with a scale solution. There is a factory that can produce volumes,” she said. “Circulose is already tested. Our plan is to go for more volumes, which will also have a positive effect on the price.”
The current inventory of Circulose in the market is enough to create a short-term bridge, until the company can restart production in its Swedish factory. The executives estimate that will be in late 2025.
“But only we have made sure that we’ve built the market and secured demand to support the at-scale production capacity that we will have,” said Janmark.
“We have completely different circumstances than [Renewcell], which was an amazing attempt. They did so many things well, and that’s what we get to build on,” said Janmark. “They built the factory, which is extremely impressive. Now we can focus on building the market.”
