The Genesis of Sustainable Fibres

In 1987 Courtaulds UK started up the world’s first solvent-spun cellulose process to supply  25 tonnes/week  of  a new rayon fibre  with impeccable environmental credentials .  Process development had started in Courtaulds Coventry Research laboratories in 1979 under the direction of Patrick White[i]  and had remained secret under the “Genesis” codename until 1986.  In June that year the Courtaulds Fibres Viscose Division and Courtaulds Research joined forces to reveal, without spelling it out as such,  a long-range strategy to replace the chemically complex viscose route with a simple, pollution-free, physical cellulose dissolution route.  Here  cellulose in the form of wood-pulp would simply be dissolved without change and reprecipitated as a “lyocell” fibre.  Stratford-on-Avon was the chosen venue for the press conference and because nonwovens were then looking to be the best launch market, several nonwoven reporters[ii]  were present who duly wrote articles on the new fibre[iii].

Tencel News: 600 jobs to go at Lenzing Austria (2013)

In the light of the ongoing difficult market situation, Lenzing has decided to proactively implement a massive, far-reaching cost optimization program. The initiative will enable cost savings of EUR 120 mn p.a. until 2015 as a means of safeguarding Lenzing’s cost leadership on the global market for man-made cellulose fibers. In this way Lenzing is responding to the current difficult market environment, which has led to increasingly fierce price competition.

“The difficult market situation will continue in 2014 and possibly well into 2015. We will resolutely counteract this unfavorable situation and adjust our cost structures to the new circumstances as quickly as possible”, says Peter Untersperger, Chief Executive Officer of Lenzing AG. “Our aim must not only be to expand our quality leadership and innovative strength on a sustainable basis, but also to regain the cost leadership in our industry. We continue to see attractive growth potential for our products, but we are already preparing ourselves today as optimally as possible for the increasingly tough competition. Cost discipline and cash generation will be our targets over the coming years.”

In particular, the sales and marketing organization will be strengthened as part of the current reorganization project. The entire organization will sharpen its focus to more strongly orient its activities to the important fiber markets of Asia and Turkey. Sales efforts in China especially will be expanded on the basis of additional technical experts and market development capabilities.

Lenzing will continue to invest, particularly in developing TENCEL® for high quality textile applications and sustainable nonwoven applications. Demand for Lenzing Modal® remains strong.

The expanded cost optimization program “excelLENZ 2.0” is a further, comprehensive step to sustainably safeguard earnings and future investment projects. It complements the initial “excelLENZ” cost-saving program which has been underway since the beginning of the year as well as the organizational restructuring of the Group. Improvement potential for all cost modules encompassing all operating units has been defined over the past weeks. The measures to be implemented on this basis will not only result in savings in material costs but also massive reductions in operating expenses and overhead, extensive increases in operating efficiency as well as a reduction in the total number of employees. All global sites will be affected. The staff at the Group’s largest production site in Lenzing, Upper Austria will likely be downsized by up to 15% from the current level of about 2,600 employees (including retiring employees and unfilled vacancies). On balance, a total of up to 600 jobs will be cut or vacant positions not filled.

The individual measures will be quickly carried out in the coming months, and thus already partially impact earnings in 2014. Lenzing expects one-off expenses related to the implementation of the “excelLENZ 2.0” drive in the mid double-digit euro range.

Source: Lenzing PR