New Zealand firm Greencane, which makes paper from a sugarcane waste product, plans to enter the Australian market this year.
Greencane which makes toilet paper and other disposable paper products from bagasse - the fibrous waste left over when sugarcane is crushed to extract the juice.
Sugarcane fibre is more biodegradable than conventional paper made from wood pulp and sugarcane is harvested annually, compared to trees which can take 25 years to grow.
The Auckland-based company sells rolls and kitchen towels at New World supermarkets as well as supplying 500 businesses and eco lodges with tissues and hand towels.
About 200 countries grow sugarcane commercially but only a handful recycle bagasse.
Greencane founder Geoff Arden says its paper is specially made in Southern China, where sugarcane is grown.
"Timber is a long fibre, it takes 25 years to grow. Bagasse or sugarcane takes less than a year to grow and so essentially what happens is you end up with a very weak fibre and it biodegrades very, very quickly."
The product still contains up to 30% of wood-based pulp to make it strong enough.
Mr Ardern says it took a while to get the recipe right but the end product is highly biodegradable and even cheaper than conventional toilet paper.
Mr Arden, who also owns disposable paper products company New Zealand Hygiene, founded Greencane in 2009 after requests from customers for eco-friendly products.
Greencane is not yet a profitable company but it is planning on entering the Australian market in the middle of this year and Mr Arden believes it could eventually become a global brand.
He says a lot of its sales are online, which is growing hugely.
Mr Ardern says there has been huge interest from Britain and Canada.
He says nobody is using bagasse in New Zealand and no-one in Australia and Britain is yet doing quite what he is doing.