- Tencel's for the next century. Short term it has problems.
- Excessive cost of Tencel...too high to command anything but the designer market.
- Courtaulds says it is reducing its costs, but its initial confidence has given way to subdued assertions that its five-year lead in the marketplace will guarantee it a strong position.
- Lenzing claim cost advantage.
- Prospect of Asian giant (Garuda) buying Lenzing stake and pumping millions into Lyocell.
Because lyocell is similar in texture to silk, it is expected to become very popular in east Asia, where an increasingly affluent middle class is demanding high quality, colourful fashions suitable for the warm, high humidity climate experienced across the region.
In the lyocell process wood pulp is dissolved in N-methyl-morpholine-N-oxide (NMMO) solvent to produce 'dope' which is then extruded into a spinning bath of solvent, producing cellulose filaments. By contrast, the viscose process involves chemical breakdown of the wood pulp and produces sulfurous effluents.
In addition to the fibre's superior properties - high wet and dry strength and low shrinkage - lyocell's production process is simpler and quicker than viscose's. It is estimated that, from start to finish, the lyocell process takes three hours compared with over 40 hours for viscose.
Both Courtaulds and Lenzing developed their processes for making lyocell from wood pulp on technology processes licensed from Akzo, the Dutch chemicals company. Patent rights to lyocell are claimed by both Courtaulds and Lenzing, tying up global development plans in legal battles on both sides of the Atlantic.
Courtaulds was the first to produce lyocell staple fibre commercially, and is still the only commercial-scale producer. The company has put hundreds of millions of pounds into the fibre, which it calls Tencel, in the hope that it will provide the
sales and profits growth needed by a company operating in mature and declining markets. But Lenzing, which is also the world's leading producer of viscose, is battling hard to carve out a strong market position in the fibre.
sales and profits growth needed by a company operating in mature and declining markets. But Lenzing, which is also the world's leading producer of viscose, is battling hard to carve out a strong market position in the fibre.
Courtaulds started independent research into solvent spun cellulosic fibre technology in 1978 and made its first commercial sales of Tencel in 1988. It opened the first full-scale Tencel fibre plant, at a cost of around $90m and with a capacity of 18 000 tonne/year, in Alabama, US, in 1992.
A second Tencel fibre plant costing $134m is due to start production in Alabama, raising total capacity to 43 000 tonne/year.
Last year the company announced a new breakthrough in lyocell technology which, it says, should enable spinning rates to be increased. In due course this new technology will be retrofitted to the company's two Alabama plants, raising their combined capacity to 55 000 tonne/year.
Courtaulds has chosen to site its key European plant for lyocell at Grimsby in the UK. The plant was to have been completed in two stages of 20 000 tonne/year each but the two stages are now to be combined and the overall capacity increased. The $180m Grimsby plant will now have a capacity of 42 000 tonne/year, giving the company a worldwide capacity of nearly 100 000 tonne/year of lyocell fibre by 1998.
A fourth plant is planned for Asia, probably to be built in China, although a firm decision on the location is due to be reached later this year.
While Courtaulds is the only commercial producer of lyocell, Lenzing, which has a pilot lyocell plant at its headquarters in Lenzing, Austria, is catching up and has announced plans for a 20 000 tonne/year facility to be constructed at Heiligenkrauz in Burgenland, Austria.
Unfortunately the dreams of both companies to establish legal rights over the production of what many view as the growth fibre of the 21st century has been interrupted by the legal battle between them.
Lenzing claims that the Courtaulds plants are contravening its patents. Late last year a court in New York dismissed Lenzing's claim that Courtaulds had infringed its patent on a step in the process of making lyocell, although the Austrian firm has appealed against the judge's ruling.
The European Patent Office last year upheld a Lenzing patent, originally obtained in Austria. And in the UK Courtaulds has turned to the High Court in an effort to get the Lenzing patent declared invalid so that the Grimsby plant can proceed.
The patent at the heart of the dispute relates to the processing of lyocell after the cellulose has been extracted from the wood pulp. Both companies are using a standard filmtruder to extract the solvent, but Lenzing has patented its use. Courtaulds says that using a filmtruder is 'so obvious' it never even thought of patenting the process. Both companies suggest that a deal will be struck between them, eventually, but this might never happen.
Meanwhile, two Austrian banks which own half of Lenzing's equity, want to sell their stakes. A potential buyer is Raja Garuda Mas (RJM), the Indonesian pulp, paper and fibres group, raising the prospect of an Asian fibres giant willing to pump millions of dollars into the accelerated development of lyocell.
While analysts agree that lyocell is going to be an exciting new fibre for the world in the next century, they are much more cautious about the short term outlook. One worry is its cost.
Lenzing already claims a cost advantage over the production of lyocell, made more significant by what some analysts have called the excessive cost of Tencel. At $5000/tonne, compared with a long-term average of $1500/tonne for cotton, Tencel is probably too high to command anything but a designer market. 'Courtaulds will have to bring its costs down to stay ahead in this market,' says one analyst.
Courtaulds says it is reducing its costs, but its initial confidence has given way to subdued assertions that its five-year lead in the marketplace will guarantee it a strong position.
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