Friday, September 14, 2012

The Rayon market in 1986. Not an obvious investment choice.

The following cutting is the 1986 view of the global market for cellulosic fibres, probably a combination of viscose staple and filament, as presented in the Tencel scale-up justification. Decline was seen as inevitable, not only because of the polluting nature of the viscose process as highlighted here, but also because synthetics based on cheap oil were encroaching into the absorbent and hygiene products markets: a rayon "fortress".  Polyester/cotton blends were pre-eminent in commodity textiles and the case for the higher value, stronger cellulosics such as Modal and Polynosic rayons was diminishing. (polyester in the blend provided strength more cheaply)

20 years on, the outlook had changed dramatically with cellulosics capacity approaching double the capacity of 1986.  However only ~5% of the new capacity was based on the new pollution-free process.  The viscose processes had proved a cheaper and more attractive investment than lyocell and furthermore the lyocell technology was controlled by Lenzing.

The '86 cutting follows:




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