New CEO for 'unlikely' to break-even Renewcell
Swedish pulpmaker Renewcell, the developer of 100% recycled textile-based ingredient brand Circulose, has announced that lower-than-expected sales volumes to fibre producers “makes it unlikely” that it will break even on a cash flow basis by year’s end.
The company said it will publish its third-quarter earnings report on November 7.
Despite this slowed sales ramp-up, Renewcell underlined that it “continues to receive strong interest from a large number of brands”, who seek access to the product “in order fulfil [both] the demands of consumers and their sustainability goals”. The manufacturer had sold 14,400 tonnes of Circulose-branded cellulose dissolving pulp as of September 30.
Around one third of this amount has been sold on to producers, with the remainder being purchased by its sales agent pending final onward sale. Renewcell has so far been paid 70% of the latter two thirds' total value, it continued, meaning accounts receivable currently stand at $5 million or 55 million Swedish krona.
The business subsequently revealed it had appointed Magnus Håkansson acting chief executive in place of Patrik Lundström, with immediate effect, on the morning of October 16.
“With a slower adoption in the value chain and thus lower sales growth than expected, the board has decided that new leadership is necessary," commented chairman, Michael Berg. “We are very pleased that Magnus is now stepping in as acting chief executive.
"His experience from consumer-focused companies and solid leadership skills will add value to the company in its current phase, focusing on sales to brands in the clothing retail sector.
“I would like to thank Patrik for his contribution. He has been instrumental in taking Renewcell from the development stage to listing, factory construction and production.”
Image: Renewcell 1 facility in Sundsvall, Sweden. Credit: Henrik Bodin.
