Ecofibre, an Australian company focused on hemp-driven products and materials has entered its specialty manufacturing division, Hemp Black into a Memorandum of Understanding (MoU) with sportswear giant Under Armour.
Under the terms of the MoU, Hemp Black will be the exclusive supplier of its bio-based yarns to Under Armour for an initial 3-year period, supporting the company’s objective to integrate sustainable components into its supply chain. This collaboration has also enabled Under Armour to invest in new production technology.
Once up and running the deal is expected to generate revenues of AU$9m (US$5.86M).
To accelerate this partnership, Under Armour has pledged to allocate $4.5m towards specialised manufacturing equipment for Hemp Black. The expected annual revenue per machine at full capacity is AUD$9m, said Ecofibre.
The equipment commissioning is expected to be completed by early 2024. Moreover, Hemp Black plans to acquire a second machine within the next 12-18 months to meet the increasing demand.
CEO Eric Wang said, “When Ecofibre announced our strategic review earlier this year, we advised that one of the key opportunities for Hemp Black would be to secure new performance yarn clients. The outstanding technical capabilities of the team enable us to work with tier-1 clients on large-scale opportunities.”
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UnderArmour’s main competitors in the sports apparel retail market are adidas, which recently reported a decline in revenue, and NIKE.