Stemergy: Renewable Fibre Technology

Record Oil Prices Raise Prospects for Renewable Materials Sector

28 November 2007

The superior strategy of investing into renewable bio-based materials has never been more obvious than in the last couple of months. At this time a year ago Oil was trading around $58 per barrel. The dramatic rise in the past 12 months, nearing $100 a barrel in recent weeks, is cause for concern from the numerous and wide spread industries that are large consumers of raw materials heavily dependent on energy or derived from petroleum.

Not only are oil prices steadily rising, but so too is the volatility associated with these price increases. As in the case of oil, there has been an increased sensitivity to something as simple as a weather or inventory report, news of political instability, the slowing pace of oil discoveries or heated up emerging economies, which can quickly send prices higher.

While some industry analysts feel the rapid rise in oil prices can not entirely be explained by simple supply and demand, but rather it has been lead by speculation, it remains clear we are in a new energy paradigm, where cheap, abundant energy is a thing of the past and the need for alternatives has never been greater.

The emergence and recent rapid expansion of the bio-fuels industry is a clear example of a renewable, bio-based industry that is being propelled forward by rising prices of traditional energy sources. Less obvious, yet equally as important, has been the growth in the renewable materials industry, whereby materials from sources such as agriculture and forestry are transformed into new feed-stocks for industrial applications.

A number of major companies in the chemical, automotive and manufacturing sectors have already started to invest heavily in new sources of raw materials that are not dependent on volatile petroleum and energy costs.

Those companies that have already begun to invest in new generation renewable materials are now benefiting from both a cost perspective in the short term and creating long term competitive advantages by developing viable new and existing products that utilize a raw material supply that is not directly coupled to the price of petroleum.

The driving forces for the use of renewable materials in manufacturing are the need for dependable and stable raw material sources, the development of entirely new bio-based products with unique features, and the development of investment opportunities in new distribution channels. Stemergy is in a strong position to offer its customers and strategic partners opportunities in all of these areas.

One way is that Stemergy's renewable biofibres can replace fiberglass in many applications and is a far more environmentally friendly and less expensive alternative. Fiberglass requires an abundant supply of energy, whereas Stemergy's renewable fibres are scalable, require less capital investment, require significantly less energy in manufacturing, and typically cost less than the traditional materials.

A report from the Michigan State University stated that 5 times the energy was required to make a glass fibre based composite substrate compared with a similar product from a flax based bio-fiber. The key reason sited was that the main energy source used to generate the plant based flax fibre was the sun, during the growth phase of flax plant, in comparison to the large amounts of energy needed to melt silica (sand) to make glass fibre.

A second factor is that materials made from Stemergy's renewable biofibres are generally more light weight. This will translate into lighter weight boats, cars, trucks, trains and planes, which provide better gas mileage and higher fuel efficiency.

Lastly Stemergy's plant-based fibres offer many interesting manufacturing properties which work in tandem with new bio-based resins and epoxies. These novel applications offer many new generation products that are superior in cost, environmental performance, and suitable for wide ranging applications.

All of these factors result in the strong current and future prospects for the renewable and bio-based materials sectors and Stemergy will continue to lead the charge in bringing these new generation renewable materials to a growing and accepting market place.


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About Stemergy

Stemergy bio-fiber is focused on producing and supplying renewable bio-fibres - derived from annual stem fiber plants such as flax and hemp - to the expanding global bio-fiber marketplace.