The Hong Kong fashion tech incubator that is looking to make the industry green

·4-min read

From the site of its historic textile mills dating back to the 1960s, Nan Fung Group’s innovation hub is aiming to transform the fashion industry by nurturing start-ups that reduce waste along the supply chain.

The Mills Fabrica, based in the Hong Kong conglomerate’s revitalised project in Tsuen Wan, has been helping to grow start-ups that use new technologies to drive sustainability in the apparel sector.

“The mission is to accelerate innovation for sustainability,” said Alexander Chan, co-director of The Mills Fabrica. “The goal is really to help these companies grow, then make an impact on the industry.”

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The garments industry makes a sizeable contribution to climate change, emitting about the same quantity of greenhouse gas emissions per year as the entire economies of France, Germany, and the United Kingdom combined, according to the Fashion on Climate report by McKinsey and the Global Fashion Agenda last August. The sector was responsible for around 2.1 billion metric tonnes of greenhouse-gas emissions in 2018, about 4 per cent of the global total.

The fashion industry can reduce around 61 per cent of the carbon emissions by making changes to the production cycle and supply chains, McKinsey said.

One of the areas that The Mills Fabrica has zeroed in on for innovation is the supply chain. Besides providing a 12-month incubation programme for start-ups, it also makes direct investments in early stage companies, from seed to series B funding, through the Fabrica Fund set up by Nan Fung. Investments typically range from US$100,000 to US$2 million, according to its website.

One of the Mills Fabrica’s first investees was Unspun, a fashion technology company based in Hong Kong and San Francisco that produces denim jeans on-demand using 3D-scanning technology. It provided seed funding in 2018, becoming the firm’s first institutional investor.

“There’s a massive waste problem within the fashion industry,” said Walden Lam, chief executive and co-founder of Unspun. He noted that not much had changed in the way garments are produced and there had hardly been any innovation before Unspun started.

He said that the company’s on-demand manufacturing model ensures that they “have zero inventory, so we never throw garments into the landfill.”

Unspun also plans to launch jeans made using their 3D weaving technology in the fourth quarter of this year.

“Instead of starting with the piece of fabric and cut the pattern you want, we essentially weave the pant leg from the ground up, so the yarn goes directly into the garment. So from a material standpoint, we get quite close to a zero-waste process,” said Lam.

Another start-up in The Mills Fabrica’s portfolio, Renewcell, also reduces the amount of garments thrown into landfills. The Swedish company uses chemical recycling to generate cellulose pulp from recycled cotton garments.

“We add a vital link in the value chain to make it circular,” said Harald Cavalli-Björkman, chief marketing officer of Renewcell. “We can take on waste, collect and sort it, and convert that into a virgin quality raw material for the fashion industry.”

The Mills Fabrica invested in Renewcell’s series A funding round in 2019. Renewcell listed on the Nasdaq First North Premier Growth Market last November, becoming the first in The Mills Fabrica’s portfolio to go public.

The IPO raised about 800 million Swedish krona (US$93.5 million) to finance the construction of its commercial-scale recycling plant in Sweden. The plant is expected to commence operations in the first half of 2022, with an annual production capacity of 60,000 metric tonnes of pulp, or the equivalent of recycling 300 million T-shirts each year.

Last July, apparel maker Levi’s collaborated with Renewcell to produce a new pair of jeans in its sustainable WellThread line, using recycled materials including organic cotton and worn-out jeans.

“The long term kind of utopian vision is to really close the loop of materials for fashion with no waste,” said Cavalli-Björkman. “It is within the realm of possibility now.”

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