Courtaulds seeks partner for Far East Tencel project (1997)

Searching for the right site and partner for its planned Tencel production unit in the Far East is taking longer than anticipated for Courtaulds.

Courtaulds is in discussions with a number of companies as it looks for a partner for a planned Far East investment in Tencel lyocell fibre production. The location is yet to be chosen but it is known that two or three sites in the region are in the running.

It could be the end of the year before Courtaulds finalises its plans for the 50000 tonne/year plant, with issues such as financial assistance, political stability and closeness to textile markets being considered.

A decision had been expected by the end of the first quarter this year but, said fibres chief David Wilkinson, narrowing down the possible locations has proved a lengthy process: 'It is a very big step and if we get it wrong, we get it badly wrong.'

The issue of whether to take a partner for the $250m investment is not fully resolved, said Wilkinson, and Courtaulds could go it alone. However, the assistance of a local partner that knows the region's fibre and textile markets would be an advantage, he said.

The Far East plant will add a third production arm to Courtaulds' global strategy for the fibre. It currently has 43 000 tonne/year capacity in Mobile, Alabama, and by the end of this year will have onstream 42 000 tonne/year of capacity in the UK, at Grimsby.

There is 12 000 tonne/year of debottlenecking potential at Mobile, but a decision on when to implement this has not been taken. Courtaulds' aim is to have sales in excess of 150 000 tonne/year by 2005.

Courtaulds is already collaborating with Japanese fibre producer Asahi Chemical in market testing of lyocell filament fibre, which Courtaulds is jointly developing with Akzo Nobel.  Wilkinson said the two European companies should be able to put up a proposal at the end of July for a 5000 tonne/year production plant. It will most likely be built at one of Akzo Nobel's German sites. Filament lyocell ("Newcell") will compete against cuprammonium rayon at the higher end of the textile markets, said Wilkinson.

5th May 1997 [Source: ICB]