Thinking Outside the Dye Vat

The post “Dyes of the Beholder” on April 26^th introduced a new series on textile dyes, an industry fraught with environmental abuses and energy inefficiency.  This fourth and final post in the series on investment opportunities in the textile dye sector, looks at three newcomers with unusual technologies aimed at improving the textile dye process.

ColorZen has developed a patented pre-treatment for cottons that change the charge of cotton to positive so that dyes lock into place faster.  This makes it possible for the cotton textile to absorb more dye and take on a richer color.  The pre-treatment eliminates the need for toxic chemicals to ‘fix’ colors in conventional dyebaths.  ColorZen claims its pre-treatment reduces the amount of chemicals by as much as 90%.  However, what stands out even more in ColorZen’s solution is that it cuts the use of water to near-zero.  The ColorZen pre-treatment is good for both the textile manufacturers bottom line and the environment’s condition.

No water or chemicals are used in the textile process solution created by DyeCoo, another privately-held textile technology developer.  DyeCoo is an expert in carbon dioxide technology.  The company’s textile solution involves heating and compressing CO2 so it become supercritical or in a state somewhere between a gas and a liquid.  In this state the CO2 acts as a solvent that helps color pigments penetrate the textile more quickly than in conventional processes.  Dyeing time is cut in half and the textile comes through the process dry, it requires fewer chemicals and there is no wastewater discharge.  Energy use is cut in half.  The CO2 can be recycled and used over again in the same process.

DyeCoo has already established a market foothold.  The company has sold its CO2 equipment to Yeh Group in Thailand, which is using the process on textiles for Adidas.  Nike clothes are getting the CO2 treatment by textile producer Far Eastern New Century in Taiwan for its customer Nike.  The process must have made a big impression on these producers as the DyeCoo machines require a significant capital investment between $2.5 million to $4.0 million per machine.

Colorifix is going back to the beginning with natural pigments that are taken from living things.  Colorifix scientists use DNA sequencing technology to figure out what encodes the instructions for a pigment in a biological specimen.  That genetic messaging is then translated to Colorifix engineered microorganisms.  This allows the company to create environmentally benign color in the laboratory.  A small amount of live microorganisms are then grown in volume much like beer in a fermentation process.  The stew is then used instead of a synthetic dye.

Water savings is an advantage of Colorifix’s solution as well.  The company claims at least 10 times less water is needed than conventional processes. Equally attractive is the elimination of toxic chemicals and heavy metals that are otherwise needed for synthetic dyeing processes.   

Colorifix raised $3 million in a Series A capital raise, which included clothing retailer H&M Group and Cambridge Enterprise.  More likely than not the U.K.-based company will be back to the capital markets for additional fund.  It had lined up several pilot projects with key fashion industry players.  However, deeper penetration of the market could require deeper financial resources.

 

It requires a vigilant eye to find opportunities to win stakes in private companies.  Like the others in our series on textile dyeing technology, these three companies are worth watching. 

 

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.