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Profile of Lenzing: A Leader in Cellulosic Fibres and a Joint Venture Partner in Carbon Fibres

Published by: Textiles Intelligence

Published: Apr. 1, 2007 - 19 Pages


Table of Contents


SUMMARY

INTRODUCTION

Textiles

Nonwovens

Pulp

Lenzing Technik: Engineering

Plastics

Paper

Energy

COMPANY DEVELOPMENT

PRODUCTS

Tencel

Moisture management

A variety of surface characteristics

Improved durability

Lenzing Modal

Lenzing Viscose

Lenzing FR

Nonwovens

Nonwovens for wipe applications

PRODUCTION

Manufacturing facilities and annual capacity

Output

FIBRE MANUFACTURING PROCESS

Viscose fibre

Fibre quality

The process

Lyocell fibres

ADVANTAGES OF CELLULOSIC FIBRES OVER OTHER FIBRES

Cellulosics versus cotton

Demand for cotton is exceeding supply

Cellulosics can replace cotton and offer benefits

Average yield

Pest control

Water consumption

Lenzing cellulosic fibres utilise environmentally friendly production processes

Cellulosic fibres versus synthetic fibres

FINANCIAL PERFORMANCE

OUTLOOK

Expansion into carbon fibre production

Cellulosic fibre capacity expansion in China

Uncertainties in the near-term future

Potential acquisition target?

List of tables

Table 1: Lenzing: production plants and capacity, April 2007

Table 2: Lenzing: financial summary, 2003-06

Abstract

Lenzing is a leading manufacturer of cellulosic fibres. Key brands are Tencel, Lenzing Modal, MicroModal, Lenzing Viscose and Lenzing FR (flame retardant). In addition, Lenzing has announced that it has set up a joint venture with two German companies, SGL Carbon and Kelheim Fibres, to expand its operations into the manufacture of carbon fibres. The company’s sales reached Euro1 bn (US$1.3 bn) for the first time during the year ending December 31, 2006, mainly as a result of an exceptional performance in its fibres business. Lenzing attributes its success to its proprietary cellulosic fibre technology and its focus on the production of high value and low volume speciality fibres for niche markets.

In 2005 Lenzing’s total fibre output was 453,806 tons. In 2007 its production capacity increased further following the start-up of a new 60,000 tons per annum viscose fibre line in Nanjing, China.

In early 2007 the company operated two viscose fibre plants: one in Lenzing, Austria, and another in Indonesia. It also has three Tencel lyocell fibre plants: in Heiligenkreuz, Austria; in Grimsby, UK; and in Alabama, USA.

The company’s viscose unit in Lenzing boasts a number of unique advantages. Its entire wood pulp requirements come from an integrated pulp facility, while its heat and power needs are sourced from a nearby power plant which is owned and operated by Lenzing. This integrated approach enables the company to source low cost, high quality wood pulp and generate sales from by-products of wood processing. It also gives Lenzing complete control over its energy supply. As a result, just 18% of the Lenzing site’s fuel comes from fossil fuels.

It is generally expected that demand for cotton will exceed supply in the near future, and executives at Lenzing believe that cellulosic fibres can fill part of the shortfall in supply. Cellulosic fibres offer a number of practical advantages over cotton, such as moisture management for sensitive skin, a variety of surface effects, improved durability and flame retardancy. In terms of the manufacturing process, cellulosics result in a higher average yield per hectare, significantly lower water usage, renewable resources (wood), reduced pesticides, fertilisers and insecticides, and zero reliance on genetically modified (GM) crops.

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