Tencel in Lenzing Annual Reports - (2004 - part 2)

More paragraphs extracted from the 2004 Lenzing annual report.  The Austrian Supreme Court's decision against the take over of Tencel must have made it a difficult one to write...

By taking over the Tencel group of companies in early May 2004, Lenzing marked a milestone.  On the one hand, this step means that the Group has secured its position regarding the Lyocell fibers technology, which is the technology of the future in the cellulose fiber sector; on the other hand, it is another major step towards becoming a global group. In addition to the two production sites in Grimsby, UK, and Mobile, Alabama, USA, Lenzing acquired a number of international marketing offices, an international sales team and the excellently positioned TENCEL® brand.

Although the competent international merger-control authorities did not have any objections regarding this take-over, Austria’s Higher Cartel Court (Supreme Court) issued a decision against the merger. However, while the proceedings before the Higher Cartel Court were still pending, Lenzing already reached a comprehensive agreement on the conditions and restrictions that will address all possible anti-trust concerns. It is therefore expected that a new notification of the merger can be processed swiftly and positively, since it will incorporate the arguments of the supreme-court decision.

Whenever activities overlapped, it was possible to achieve savings through integration. This applies especially to international marketing activities. Concerning production, combining the available expertise helped to achieve considerable improvements within a few months, both at the Austrian Lyocell site at Heiligenkreuz and at the sites in the United Kingdom and the USA.

Research and development for Lyocell fibers was integrated into one effective team (see also the chapter on “Research and Development”). The restructuring costs incurred were included in the result for the year.

R&D activities were thoroughly re-organized in the course of acquiring the Tencel group of companies in the course of the 2004 business year. It was decided to concentrate all Lyocell research and development activities at the Lenzing site. This combination of all forces ensures an efficient and intensive further development of this promising fiber in the years to come. In the wake of this consolidation, research activities at Spondon, UK, were discontinued. Some of the staff are now working in research and development at Lenzing. The efficient Lyocell pilot plant at Lenzing worked to full capacity during the 2004 business year.

With the concentration of R&D activities at the Lenzing site, Lenzing has now become the world’s largest research center for cellulose chemistry, focusing on cellulose fibers. It has about 130 staff members; another 50 persons are engaged in external cooperation projects.

Source: http://www.lenzing.com/fileadmin/template/pdf/konzern/geschaftsberichte_gb_ugb_jfb/GB_EN/GB_2004_EN.pdf