Holland-based HempFlax has purchased Thermo-Natur, a German company that makes insulation from natural fibers, and has launched a building supplies division, the company announced this week.
HempFlax, Europe’s largest independent industrial hemp grower and processor, said the acquisition includes Thermo-Natur’s existing operations as well as licensing, brand and product certifications. Having those certifications, which can take as long as 18 months to obtain independently, will let HempFlax operate a “seed-to-shelf” business model immediately to capitalize on the rising consumer demand for sustainable building materials in Europe, the company said.
The deal accelerates HempFlax’s strategy to integrate its business and own even more of the hemp value chain in a vertically integrated model based on whole-plant processing.
“Vertical integration is the most effective way of ensuring high standards are adhered to whilst also extracting maximum value from a synergistic supply chain,” said Guy Winterflood, HempFlax Chairman.
Hemp insulation represents less than 0.5% of the 3.3 million tons of insulation materials used each year in construction. The global building thermal insulation market is expected to reach $38.95 billion (€35.5) by 2025, HempFlax advised, noting that increasing concerns about climate change, the need for energy conservation and ambitious carbon reduction goals are driving demand in the organic insulation market.
Consumer trends and an increasingly favorable regulatory environment across Europe are also indicators that the hemp fiber-based materials market will continue to grow, according to HempFlax, a long-time market player that marked its 25th anniversary in 2019.
Organic fiber can be a key factor in addressing the United Nations Sustainable Development Goals and broader environmental ambitions, according to HempFlax President Mark Reinders.
“Synthetic construction materials are simply not needed, and their usage has dire ecological and climatic consequences, be it from pollutants, carbon emissions or unhealthy living environments,” Reinders said
Winterflood said the company is building on a strong first quarter in which revenues grew nearly 20% over the analog period for 2019.
The sale price of the transaction was not announced.