Why the Nanollose (ASX:NC6) share price is shooting higher today

The Nanollose Ltd (ASX: NC6) share price is rocketing even higher today following a joint patent application with Grasim Industries Limited.

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The Nanollose Ltd (ASX: NC6) share price has been on fire the last two days. Yesterday, the company's shares jumped to more than 52% at market close, following the announcement of a joint patent application with Grasim Industries Limited.

Today, investors further drove up the Nanollose share price after digesting the news, sending it a whopping 82% higher at 14 cents.

Quick take on Nanollose

Based in Australia, Nanollose specialises in researching and developing eco-friendly biomaterial using its microbial cellulose technology. Its proprietary plant-free technology alters the structure of nano cellulose through physical or chemical treatments to create new modified fibres.

The company aims to commercialise the production of its cellulose technology as an environmentally-friendlier alternative to cotton, tree pulp, and other fibres that are used within the textiles industry.

What's driving the Nanollose share price to massive highs?

In yesterday's release, Nanollose advised that is has filed a patent application with Grasim for a high tenacity lyocell fibre made from microbial cellulose.

The submission represents a major step forward for the company as it seeks to improve its fibre composites. Nanollose said that a team of fibre specialists at Grasim's Pulp and Fibre Innovation Centre was producing nullarbor lyocell fibre. This is a revolutionary fibre said to be finer than silk and significantly more durable than conventionally-sourced wood pulp lyocell.

The use of lyocell is increasingly popular in today's environment with the fibre employed in a number of industry-wide applications. The more expensive cousin of cotton, Lyocell is used in many everyday fabrics. This includes textiles to make clothing such as jeans, towels, and underwear. In addition, the cellulose fibre is used for conveyer belts, speciality papers, biodegradable plastic and films, and medical dressings.

According to GM Insight, the lyocell market is estimated to be worth US$1.5 billion before 2024. This represents a compound annual growth rate of 8% and highlights the growing market opportunity for Nanollose and Grasim.

Both companies will seek to produce commercial quantities of the tree-free fibre, in hope that commercial agreements will be formed with fashion labels.

Management commentary

Nanollose executive chair, Dr Wayne Best, welcomed the progress with Birla Cellulose – Grasim's business unit, saying:

We are extremely pleased with the progress of our collaboration with Grasim and Birla Cellulose, which has already delivered this joint patent application.

The nullarbor fibre produced by the team at Birla Cellulose has exceeded our expectations, and we now have a fibre that is not only more eco-friendly but has superior properties over conventional tree-based fibres.

We are very much looking forward to commencing the pilot production and presenting textiles made from this remarkable fibre to the fashion industry.

Chief technology officer for the Aditya Birla Group (owner of Grasim and Birla Cellulose), Dr Aspi Patel, added:

This innovative development is another important step in our continuing journey to make our fibres more sustainable.

This is an exciting development in the area of next generation alternative feedstock and we are looking forward to scaling up this technology in collaboration with Nanollose.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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