Lenzing offering continuous filament Tencel

At an exclusive event in Paris, the Lenzing Group launched a new product: TENCEL™ Luxe. The TENCEL™ Luxe randed lyocell filament is another key milestone in the implementation of the company’s sCore TEN strategy and the first time that Lenzing enters the filament market. It will further support Lenzing’s shift to become a true speciality player in the botanic materials market derived from sustainable wood sources. TENCEL™ Luxe: The new player of eco-couture fabrics TENCEL™ Luxe branded filaments are the new player for sustainable high-end cellulose textiles by offering superior aesthetics, performance and comfort level that allow them to be the perfect partner with other noble fibers such as silk, cashmere or wool. The smooth surface of the TENCEL™ branded Luxe filament gives fabrics a silky smooth feel and liquid-like drape for the most sensual silhouettes. Moreover, TENCEL™ Luxe branded filaments are naturally breathable due to their wood-based origin and offer outstanding color fastness, enabling designers to express bold color palettes where creativity knows no boundaries. 

TENCEL™ Luxe  eco-botanic lyocell filaments are made from wood pulp, which is sourced from sustainable wood in line with Lenzing’s strict Wood and Pulp Policy. They are produced using Lenzing’s pioneering closed-loop lyocell production process, which has received the “European Award for the Environment” from the European Union. This process ensures minimal environmental impact due to low process water and energy use and raw materials consumption.

“We are committed to setting industry standards in order to enhance the protection of our environment while making filaments for fabrics that are TENCEL™ Luxe is a further sign of our ongoing commitment towards innovation and sustainability”, explains Stefan Doboczky, Chief Executive Officer of the Lenzing Group. “The expansion plan represents the next consistent step in the implementation of our sCore TEN strategy and is a commitment of Lenzing as a hub for research & development and engineering.” TENCEL™ Luxe is another proof of Lenzing’s innovation strength*. It will open new markets for the

Lenzing's results for 2015

Wednesday, 23 March 2016

Revenue rose by 6% to EUR 1.98 bn
EBITDA increase of 20.7% to EUR 290.1 mn
Dividend proposal: doubling to EUR 2.00 per share
Share of specialty fibers up to 40.5%
Further earnings improvement expected in 2016

Thanks to a strong operational performance, the Lenzing Group significantly improved just about all relevant economic and balance sheet indicators in the 2015 financial year compared to its business results in 2014.

Consolidated revenue climbed by 6.0% to EUR 1.98 bn. This increase is particularly due to higher fiber selling prices, the growing share of specialty fibers in its product mix and positive exchange rate effects. EBITDA (earnings before interest, tax, depreciation and amortization) improved by 20.7% to EUR 290.1 mn, up from the prior-year figure of EUR 240.3 mn. Lenzing’s performance in 2015 corresponded to an EBITDA margin of 14.7% (2014: 12.9%). EBIT (earnings before interest and tax) of the Lenzing Group increased to EUR 151.1 mn from EUR 21.9 mn, corresponding to an EBIT margin of 7.6% (2014: 1.2%). Earnings before tax (EBT) amounted to 149.1 mn, substantially higher than EUR 7.3 mn in 2014. The group net profit for the year totaled EUR 124 mn, compared to a loss of EUR 14.2 mn in the previous year. Earnings per share in the 2015 financial year rose to EUR 4.63, up from minus EUR 0.51 per share in 2014. On the basis of this good financial performance, the Management Board and Supervisory Board will propose that the upcoming Annual General Meeting approve the distribution of a dividend of EUR 2.00 per share for the 2015 financial year, double the dividend for 2014.

“We made substantial progress in 2015, and delivered the promised improvements to our business operations,” says Stefan Doboczky, Chief Executive Officer of Lenzing AG. “We strategically realigned the company, improved the earnings and cost structure and enhanced our financial strength. We also expect a considerable rise in earnings once again in 2016 provided that the underlying business framework does not significantly change.”

Solid balance sheet structure, clear improvement of ROCE to 8%

Lenzing boasts a solid balance sheet structure which was further optimized in the course of the 2015 financial year. Adjusted equity increased by 15% to EUR 1.23 bn (2014: EUR 1.07 bn). The adjusted equity ratio amounted to 50.6%, the highest level since the year 2006 (2014: 44.9%). Net financial debt was sharply reduced by 27.0% to EUR 327.9 mn (December 31, 2014: EUR 449.5 mn). Accordingly, the ratio of net financial debt to EBITDA declined from 1.9 at the end of 2014 to 1.1 at the end of 2015. The return on capital generated by the Lenzing Group improved thanks to the positive earnings development. As a result, the return on capital employed (ROCE) increased to 8.0%, compared to minus 0.1% in the previous year. At the same time, the return on equity (ROE) rose to 13.0% (2014: 0.7%).

Investments in intangible assets, property, plant and equipment (CAPEX) of the Lenzing Group totaled EUR 70.9 mn in the 2015 financial year, compared to the prior-year level of EUR 104.3 mn. Following completion of the TENCEL® fiber production plant at the Lenzing site in 2014, the focus of Lenzing’s capital expenditures in 2015 was on maintenance work as well as the implementation of quality and optimization measures. The excelLENZ cost optimization initiative was concluded in 2015. The new strategy sCore TEN was developed by the Lenzing team and is already in implementation.

Share of specialty fibers up to 40.5% of group revenue

Demand for high-quality Lenzing fibers was strong in 2015, encompassing all regions and product groups. For this reason, the pulp and fiber production capacities of the Lenzing Group were well utilized against the backdrop of high production output. In particular, sales of the specialty fiber TENCEL® increased significantly. The share of specialty fibers as a percentage of total group revenue was 40.5% in the 2015 financial year, compared to the 35.0% in the previous year. Expenditures for research and development were increased by 47% to EUR 29.8 mn, in line with the company’s strategy of focusing on the development, production and marketing of innovative specialty fibers.

Outlook for 2016

The volatile development prevailing on the global fiber market is expected to continue. High cotton inventories and low polyester selling prices intensify price competition on the market i.e. inter-fiber competition. However, the market segment of wood-based cellulose fibers, which is of relevance to Lenzing, is showing signs of developing more positively than the overall fiber market. Demand for cellulose fibers remains strong, and the ratio of supply to demand is favorable. Assuming unchanged conditions on the fiber market and currency exchange rates, Lenzing expects further improvements in earnings in the current 2016 financial year compared to 2015.

Lenzing: Profitable Growth Thanks to Eco-Friendly Specialty Fibers

• Share of revenue generated by specialty fibers targeted to rise to 50% by 2020.
• The nonwovens segment is expected to expand twice as fast as the textile market. 
• EBITDA growth of approx. 10% p.a. until 2020 
• Increase in ROCE to more than 10% by 2020 

The Lenzing Group is presenting its business strategy for the coming years entitled “sCore TEN”. Accordingly, Lenzing’s main priorities are strengthening the company’s core business, intensifying cooperation with customers along the value chain, increasing the share of specialty fibers to 50% of total revenue by 2020, expanding its quality and technological leadership for man-made cellulose fibers and opening up new attractive business areas.

“Our objective is to safeguard and expand Lenzing’s leadership role on the dynamic growth market for man-made cellulose fibers“, says Lenzing’s Chief Executive Officer Stefan Doboczky. “To achieve this, we will focus more intensively on the most attractive segments in the specialty fiber business. Lenzing will put value before volume in the future. We aim at achieving volume growth.”

Lenzing expects demand for man-made cellulose fibers to increase by 5 to 6% p.a. until 2020, which is nearly twice as fast as the global fiber market. The primary factors driving demand are the continuing growth of the world’s population and rising prosperity in the emerging markets. Forecasts call for a rise in per capita textile consumption in the emerging markets by all in all 50% in the period 2010 to 2020. In the industrialized countries the nonwovens industry, an important sales market for Lenzing, will profit from the increased demand for hygiene products. The nonwovens segment is expected to expand twice as fast as the textile market.

Jumbo Tencel plant doing well - 1997 projection was right (2014)

Proud of the successful half-year track record of the new TENCEL® fiber plant in Lenzing: TENCEL® Plant Manager Franz Bauhofer, Board Member Robert van de Kerkhof (CCO) and Head of TENCEL® Operations Andrew Ronchetti.

As of the end of 2014, total annual TENCEL® production capacity of the Lenzing Group amounts to about 220,000 tons manufactured at the Austrian sites in Lenzing and Heiligenkreuz, in Mobile, Alabama in the USA and in Grimsby, Great Britain. Thanks to the new “jumbo production line” at the Lenzing site, investment costs could be maintained at a very competitive level of approximately EUR 150 mn (or about EUR 2,200 per ton of capacity). This gives Lenzing the opportunity to achieve a further competitive scaling of TENCEL® fibers as a universally deployable textile and nonwoven fiber.  

(*Andy Ronchetti, then in Courtaulds Research, was present at Courtaulds Fibres 3rd Oct 97 Strategic Review of Tencel where the projected costs of a future jumbo Tencel plant were estimated to be $2500/AT by Dave Hignell and $3000/AT by Dave Watson.  Taking the mid-range $2750 figure, that just happens to be Lenzing's €2200/AT at today's exchange rates. Ed.)

More Layoffs at Lenzing (2014)

The Lenzing Group is resolutely and systematically counteracting the ongoing difficult market conditions in the global fiber industry on the basis of its cost optimization program as it reported on the occasion of publishing its business results for the first three quarters of 2014. The organizational optimization measures launched one year ago at all sites and in all business areas are having a positive impact. The results achieved up until now are encouraging but by far insufficient to offset the decline in viscose fiber selling prices on the international marketplace.

Lenzing continues to anticipate good volume demand for all man-made cellulose fibers. However, fiber selling prices on the global market are not expected to recover in upcoming quarters. This development is also attributable to the substantial decline in polyester fiber prices as a result of the massive oil price decrease, and the expected longer-lasting period of low or at least volatile cotton prices as a consequence of the surplus supply of Chinese cotton.

For these reasons, the Lenzing Group will not implement any major new projects at the Lenzing site or abroad in the foreseeable future which are designed to expand its viscose fiber production capacities. The investment volume of the company will be adjusted to reflect the current market situation and will be significantly reduced in the subsequent years. This should contribute to improving the supply situation on the international viscose fiber market, which the company would like to sustainably profit from in its role as one of the world’s largest producers.

Due to the successful completion of the new TENCEL® investment volume, technical planning and production capacities cannot be maintained at current levels, especially at the Lenzing site. This necessitates a reorganization of Lenzing’s internal engineering and maintenance business areas and its subsidiary Lenzing Technik GmbH. Organizational structures in these areas have to be adjusted to future requirements. All in all, the restructuring measures will impact up to 250 jobs (including one-third temporary staff), mainly at the Lenzing site. The distribution of the job cuts among the various sites will be determined fiber plant in Lenzing and the reduced by the beginning of 2015 within the context of a project which is already under way. In this connection, Lenzing will try to avoid layoffs and strive to reach a mutually acceptable solution with the affected employees as it succeeded in doing within the context of the first cost optimization program.

During initial talks on this issue held with the Lenzing Works Council, Lenzing agreed to extend the current redundancy program (social plan) and to offer the possibility for employees newly affected by the downsizing to transfer to the Lenzing Labor Foundation.

At the same time, Lenzing is working on a strategic reorientation of its subsidiary Lenzing Technik GmbH to enable it to focus more strongly on the external market in the future.

For more information please contact:
Angelika Guldt Stephanie Kniep
Head of Corporate Communications Head of Investor Relations
Phone: +43 (0) 7672 701-2713 Phone: +43 (0) 7672 701-4032
E-mail: a.guldt@lenzing.com E-mail: s.kniep@lenzing.com

Lenzing report record sales now the new Tencel plant is on line (2014)

Lenzing reported very high production volumes in the first three quarters of 2014, operating all its fiber production facilities at full capacity. A new record sales volume of 706,900 tons was achieved (Q1-3 2013: approx. 660,000 tons). This is all the more remarkable given the fact that all industrial plants in the greater Nanjing area of China, including Lenzing, were forced to reduce production due to the Nanjing 2014 Youth Olympic Games.

The new sales record is mainly attributable to the successful ramp-up of the new TENCEL® fiber production facility at the Lenzing site in Upper Austria towards the middle of 2014. Sales of the Segment Fibers in the first three quarters of 2014 totaled EUR 1,285.4 mn, comprising a drop of 3.1% from EUR 1,326.5 mn generated in the first three quarters of 2013. Segment EBITDA in the first nine months of 2014 amounted to EUR 155.1 mn, 15.8% lower than EUR 184.1 mn in the previous year, whereas segment EBIT of EUR 64.6 mn comprised a 35.5% decline from the prior-year figure of EUR 100.1 mn. 

Specialty fibers accounted for about 39% of total sales revenue in the Segment Fibers.  Lenzing continued to generate very attractive price premiums for the specialty fiber Lenzing Modal® in contrast to viscose fibers, against the backdrop of ongoing high demand. The price premiums achieved for TENCEL® fibers remain at a very attractive level, although prices for new samples and market development projects declined somewhat in individual cases. 

The focus of Lenzing’s marketing activities in the third quarter was on further developing the market for TENCEL® fibers. The market penetration efforts to promote the use of Lenzing fibers in denim have met with success, as demonstrated by the fact that the most prominent jeans manufacturers are integrating TENCEL® fibers in their fashion collections. Demand for TENCEL® bed linen remained strong, especially on overseas markets. In the home textiles segment, Lenzing promoted the use of TENCEL® fibers in towels, opening up new application possibilities with large American retail chain stores. 

A new study in the nonwovens segment confirms that TENCEL® BIOSOFT fibers

significantly enhance wearing comfort when used as a top sheet for incontinence pads.

This extract from the Lenzing quarterly report confirms the successful start of the 67,000 tonne/year Tencel plant in Austria. (A producer-blend of Tencel and cotton is apparently taking the bulk of the new Tencel production and allowing cheaper cottons to be upgraded.  Such a blend was part of the strategy for moving the sudden surplus of Tencel when the Courtaulds Mobile plant started in 1992.  It's also nice to hear the fashion for Tencel in denim - the original launch market - is returning.)

Source: Lenzing Interim Report - 01/09/2014

Lenzing starts world’s largest Lycoell fibre plant (2014)

This appeared on the Fibre2Fashion website and Courtaulds gets a rare mention. It will be interesting to learn where the 67,000 tonnes of Tencel from the new line said to be "running at full capacity" is being sold.

September 19, 2014 (Austria)


Within 24 months of starting construction, Austria based Lenzing AG has started commercial production at the world’s largest production facility for Lyocell fibers.

The plant which is now running at full capacity was set up at an investment of € 150 million and will produce Tencel fibre.

Lenzing said the setting up of the Tencel production plant in Austria went according to plan, both financially and in terms of time.

This new factory in Lenzing is the first in the industry to feature a single production line with an annual nominal capacity of 67,000 tons.

The new plant design incorporates lessons learnt with experience from three existing Lenzing Group Tencel production plants in Austria, USA and UK.

As a result, the new Tencel plant in Lenzing represents the world’s leading generation of Tencel technology, Lenzing explained.

Lenzing said with Tencel, it offers the industry a fiber material for the future and in terms of ecology and innovative strength, the fiber represents a milestone.

The fiber producer said, “A plethora of textile applications has been derived from the new generation of fibers from activewear to denim and shirting in which Tencel has proven its strength.”

“Until now woven products made from Tencel were promoted. However, new Tencel fibers for knitwear applications lead us to perceive tremendous potential in the fashion knitwear segment”, Robert Kerkhof, CCO at Lenzing said.

“Thanks to its bright colors and more attractive appearance, Tencel will set a new standard in this sector too,” he added.

The search for a cellulose fiber with an ecological and economic production process led researchers to Lyocell.

Lenzing and the former fiber producers, Courtaulds, nurtured Lyocell to market maturity as a result of intensive research work and their strong belief in the new fiber of the future.

The first production facility was started in 1992 and in 2004 Lenzing was able to pool all of its resources as a result of buying the Tencel brand and capitalize on this expertise in fiber production.

As a result of purchasing the Tencel brand name, Lenzing was able to market the entire Lyocell business under this well known fiber name. (AR)

Source: http://www.fibre2fashion.com/

Tencel in Lenzing Annual Reports (2011)

More from the Lenzing Annual Reports...

• Tencel selling at a 35% premium over viscose
• Tencel sales to nonwovens now above 40,000 tonnes per annum.
• Wipes, Face Masks, Medical, Battery Separators, Capacitor dielectrics mentioned as key applications
• TencelWeb(R) (spunlaid Tencel) is "the biggest development project at present"

In 2011, we not only placed considerable emphasis on volume growth. The steps we took to further expand and upgrade our capacities for the specialty fibers Lenzing Modal® at the Lenzing site and TENCEL® at our plants in Heiligenkreuz/Burgenland (Austria) and Grimsby (Great Britain), completed in 2011, were just as important in ensuring qualitative growth.  Furthermore, we applied for official approval to construct a new TENCEL® production facility in Lenzing with a capacity of 60,000 tons. Our objective is to further consolidate our leading technological, qualitative and quantitative position for TENCEL® fibers in coming decades.

The year 2011 also proceeded gratifyingly for TENCEL® textile fibers. Considering the entire year, TENCEL® continually obtained higher prices, and thus clearly distinguished itself from the general market trend. The price premium of TENCEL® textile fibers compared to Lenzing’s standard viscose fibers was more than 35% on average in 2011. One of the main reasons for this development was the continuing growth in the range of applications for TENCEL®. Accordingly, TENCEL® is not only found in the world of fashion, but increasingly integrated into home textiles. With respect to bed linens, TENCEL® fibers exploit their moisture management properties and are winning over a growing number of friends. The specialty fiber TENCEL® A100 used in the activewear and life style segments also achieved very good market successes.

Sales of TENCEL® fibers produced in an environmentally compatible manner are also being driven by an enhanced environmental awareness. Similar to Lenzing Modal®, Far Eastern sales markets for TENCEL® textile fibers proved to be more attractive in 2011 than their counterparts in the industrialized nations of the West. On balance, the average selling price per kilogram for Lenzing’s nonwoven fibers could be raised by close to 14% in 2011 to EUR 2.04/kg. Shipment volumes climbed by about 4% to 206,000 tons, thus accounting for almost 30% of Lenzing’s total fiber shipment volumes.  TENCEL® fibers comprised close to one fifth of nonwoven fiber shipment volumes.

In 2011 Lenzing succeeded in further expanding its market leader position for cellulosic nonwoven fibers used in the production of wipes. Lenzing profited from the strong demand along the value chain for fibers manufactured in an environmentally compatible manner but offering correspondingly good performance. Lenzing was granted PEFC1 certification in 2011 for all its nonwoven products manufactured in Lenzing. This certificate as well as the Lenzing nonwoven FSC2 certification ensures consumers that the raw material wood is derived from sustainable forestry. In addition to the major successes with baby wipes, market success was also achieved in the fields of cosmetics, household goods and industry in 2011. The cooperation with private label manufacturers was further intensified. Lenzing is also supporting its customers on the cost side with innovative products made possible by technical improvements, for example low weight.

An increasing number of global partners of Lenzing’s nonwoven fibers are relying on the positive reputation of the brands Lenzing Viscose® and TENCEL®. This trend strengthens the cooperation with important partners along the entire value chain. For example, at the end of 2010, a Japanese retailer launched an improved version of its baby wipes made of 100% TENCEL® on the market. The retailer conveys his trust in the brand to his customers on the basis of the reference on the label to TENCEL® in the accompanying advertising materials. The high quality baby wipes were granted the “Kids Design Excellence Award” in September 2011. Cosmetic facial masks made of nonwovens play an important role with Asian consumers. Here TENCEL® is also gaining in importance. Thanks to the pleasantly soft structure of the material which feels silky, an increasing number of skin-friendly facial masks are being manufactured with TENCEL®.

Medical applications comprised a further focal point in 2011. The use of Lenzing’s nonwoven fibers for hygienic applications developed stably.

R&D 

In the reporting year Lenzing also pressed ahead with the development of other non-filbrillating types of TENCEL® fibers. Due to their special properties these fibers are particularly suited for use in process-critical segments, for example in knitwear. For the first time TENCEL® fibers were successfully integrated into car seat covers in combination with polyester. The biggest technological challenge for the researchers in Lenzing is fulfilling the specifications of automobile manufacturers with respect to wet rub fastness and light fastness. In particular, the enhanced sitting comfort resulting from the outstanding moisture management of TENCEL® is a good reason for integrating the fiber into car seat covers.

In the technical segment, Lenzing achieved good success in 2011 with capacitors to compensate for peak electricity demand in motor vehicles. In this case TENCEL® nonwoven products were deployed as separators for an optimal ion exchange, thus enhancing the performance of the capacitors. Increased sales with TENCEL® nonwoven applications were also reported for lithium-ion batteries for electric-powered vehicles. Following the successful market launch of TENCEL® powder in mattress foam in 2010, Lenzing’s efforts in 2011 focused on scientifically evaluating expanding applications to other areas such as pharmaceuticals, cosmetics and detergents.  Furthermore, research was carried out in the reporting year on a completely new cellulose product from the lyocell technology. This refers to a gel consisting of submicroscopic  TENCEL® fibrids which can form clear and closed films in drying. This new type of TENCEL® gel could be used in a broad range of applications in the future, from coatings for paper or nonwovens to the paint and lacquer industry.

During the year under review Lenzing also pressed ahead with the biggest development project at present, i. e. TencelWeb™. This innovative technology enables TENCEL® nonwovens to be directly produced from the spinning solution, which features a high share of microfibers as  well as low weight. Further process and product optimization work was carried out in the pilot facility in 2011 along with the generation of customer samples.

Another focal point of the research carried out in the nonwovens segment in 2011 was the production of microfibers. Initial laboratory tests concluded that these microfibers have outstanding properties when used in battery separators.

Source: http://www.lenzing.com/fileadmin/template/pdf/konzern/geschaftsberichte_gb_ugb_jfb/GB_EN/GB_2011_EN.pdf

Tencel Jumbo starts at Lenzing (2014)

The Lenzing Group has successfully initiated production at its new TENCEL® jumbo production facility, the largest in the world, at the Lenzing site in Upper Austria. The plant is in the midst of a stable ramp-up phase. The feedback on the part of the market is very positive.

“We are more than satisfied with the progression of the start-up curve. Based on the production process in the past days and weeks, we have reasonable grounds to believe that this latest generation of TENCEL® technology will completely fulfill our expectations”, says a confident Lenzing Chief Executive Officer (CEO) Peter Untersperger. “The successful start-up of production operations is a technological milestone for TENCEL®, the fiber of the future, and for the entire Lenzing Group. We are optimistic that we will be able to achieve the planned production target of 30,000 tons by the end of 2014. This new TENCEL® facility is decisive to ensure the long-term viability of fiber production at the Lenzing site and the basis for future investments in all markets”, adds Lenzing’s Chief Operating Officer (COO) Friedrich Weninger.

This factory comprises the first time in which a single production line with an annual nominal capacity of 67,000 tons was installed. Previous TENCEL® production lines were usually only one-quarter as large. The new plant design incorporates lessons learned from the longstanding experience of three existing Lenzing Group TENCEL® production plants located in Austria, USA and Great Britain. As a consequence, the new TENCEL® plant in Lenzing represents the world’s leading generation of TENCEL® technology. The new design of the jumbo production line also enables investment costs to be maintained at a very competitive level of approximately EUR 150 mn (about EUR 2,200 per ton of capacity). This comprises the decisive approach to the further competitive scaling of TENCEL® fibers as a universally deployable textile and nonwoven fiber. The new, broader product portfolio on the basis of the TENCEL® technology successfully complements Lenzing’s specialty strategy.

With a construction time of 24 months, Lenzing completely adhered to both the budgeted investment costs as well as all timetables. The TENCEL® production in Lenzing secures 140 jobs at the Lenzing site.

Thanks to the new plant, annual nominal TENCEL® production capacity of the Lenzing Group will rise from 155,000 tons p.a. to about 220,000 tons. In this way Lenzing will further expand upon its global market leadership for TENCEL® fibers and offer its global customers new expansion opportunities in both the textile and nonwovens segments as well as new and innovative applications. “The related market development activities have already been in full swing for quite a few months”, states Robert van de Kerkhof, the Chief Commercial Officer (CCO) of Lenzing responsible for the fiber business. Moreover, new technical applications will be opened up and massively expanded in the years to come.

Source:  Lenzing Press Release

Tencel in Lenzing Annual Reports 2010 - Part 2

The unusually large mention of Tencel in the 2010 report continues with coverage of expansion plans, integration of Fibre with Pulp production, growth in nonwoven wipes, Tencel powders, Tencel with Chitosan, Tencel derivatives for Gel Dressings and spunlaid Tencel nonwovens.

In December 2010, further, far-reaching fundamental decisions were made as the basis for ensuring the medium-term growth of the Lenzing Group. It was decided to build the first TENCEL production plant in Lenzing (Upper Austria), with planned investments of about EUR 130 mill. required to achieve an annual capacity of approximately 60,000 tons. It will be the first backward integrated TENCEL. plant in the world which can be directly supplied by pulp manufactured by the pulp factory in Lenzing. Furthermore, it was also resolved to invest in the expansion of the TENCEL facility in Mobile (Alabama) with investment  costs of close to USD 30 mill., enabling capacity to be raised to about 50,000 tons. The production line shut down by the previous owner will be modernized and re-equipped as a means of satisfying the strong demand for TENCEL fibers in North and South America.

Cooperation in the field of baby products with the leading U.S. retailer Costco could be further intensified. In this regard, Lenzing benefits from the trend towards own brands, which opens up new perspectives to carry out cobranding activities with brands such as TENCEL and thus raise awareness of Lenzing brands among a very broad consumer base.

R&D
TENCEL displays a wide range of useful features, for example when used as TENCEL powder incorporated into mattress foam to improve moisture management. In cooperation with partners, corresponding products were prepared to be launched on the marketplace.

Other potential application areas of TENCEL powder are as plaster (used in the construction industry), in fiber-reinforced plastics, and as a replacement for fiberglass incorporated into injection molded parts.

A further new area of application for TENCEL fibers is in upholstery fabrics used in homes and in hotels. TENCEL has enabled the fabric to achieve excellent utility values (abrasion resistance), which are far superior to those of cotton.

The specialty fiber TENCEL C was also developed to market maturity. It features the application of chitosan, a natural raw material extracted from the shells of crustaceans, to the fibers. This process improves the already outstanding skinfriendliness of TENCEL fibers.

The largest development project currently being undertaken in the nonwovens area is TencelWeb. This new technology enables the production of TENCEL nonwovens from very fine filaments directly from the spinning solution. These filaments feature a large share of microfibers and a low weight. This innovative nonwoven was further optimized in cooperation with key customers. The nonwovens are to be incorporated into hygiene products and filter media.

Other research projects involved the development of products for wound treatment, a segment in which TENCEL in gel form is used as a wound dressing. TENCEL is also used as a replacement for the cotton incorporated into such well-established products such as gauze and cotton wool.

Source: http://www.lenzing.com/fileadmin/template/pdf/konzern/geschaftsberichte_gb_ugb_jfb/GB_EN/GB_2010_EN.pdf

Tencel in Lenzing Annual Reports 2010 - Part 1

This report has more on Tencel and Lenzing's enthusiasm for the Courtaulds concept of the Cellulose Gap than any previous report and will be split over 2 posts...

... market experts expect that cotton will not be able to sufficiently fulfill demand for high quality fibers boasting high wearing comfort despite the extensive use of genetically modified cotton plants. This shortage will lead to a so called “cellulose gap” which cannot be fi lled on the basis of the anticipated growth of production volumes for man-made cellulose fi bers at the present time. Additional factors in Lenzing’s favor are the outstanding technical properties of Lenzing fibers as well as the fact that the company is the only global supplier which can offer all three generations of man-made cellulose fibers, i.e. Lenzing Viscose., Lenzing Modal. and TENCEL.

Lenzing “Full Win”

On the basis of these fundamental considerations, Lenzing redefined its strategic objectives leading up to the year 2014 as follows: 

More than one million tons of Lenzing fibers are to be produced and marketed annually, of which more than one-third are specialty fibers  (Lenzing Modal., TENCEL.), enabling an average double-digit percentage sales growth and a simultaneous margin improvement, with about 700,000 tons of the required pulp supply derived from its own production capabilities.

Lenzing aims to achieve these targets by implementing the biggest expansion program in its corporate history, with expansion investments planned at almost all of its production facilities across the globe.

The positive market development in the second half of 2009 continued in 2010 as well. Demand for Lenzing fibers on the part of the textile and nonwovens industry could only be partially satisfied despite the expansion of production capacities in 2010.

The reason for this development was the long-term market trend towards the increased use of Lenzing Viscose., Lenzing Modal and TENCEL. fibers as described in the previous section of this report. In addition, the overall economic recovery combined with a broad-based upturn in private consumption also contributed to growth. In fact, the markets in Asia tended to overheat as a result already in the first half of 2010. Ultimately cotton prices exploded as of the third quarter 2010 due to the perceived danger of a physical shortage as a consequence of flood catastrophes in Pakistan and India. This

prematurely ended the expected normalization of the price situation in the second half of the year.

The TENCEL production facility in Heiligenkreuz, Austria also raised total capacity by 10,000 tons to about 60,000tons as of the 2011 business year thanks to a corresponding investment program. The TENCEL factory in Grimsby (Great Britain) carried out refurbishment investments, allowing for a considerable increase in production capacities for the TENCEL specialty fiber A-100 although total capacity remained the same.

Tencel in Lenzing Annual Reports (2009)

Tencel sales in Textiles begin to recover and the fibre is mentioned in Business Unit Textiles for the first time in a few years:

Sales of TENCEL® fibers were equally gratifying. Although the demand for TENCEL® for textile applications declined somewhat during the first months of 2009, Lenzing succeeded in gaining a strong market position for innovative fiber blends with cotton, in particular in the denim segment. TENCEL® applications for home textiles developed equally well after considerable marketing and development activity in the preceding years. Sales of flame retardant fibers for military applications remained stable whereas industrial protective applications declined due to the general economic situation.

...and in Business Unit Nonwovens the Wipes and Webs story continues.

Specialty wipes in the reporting year benefited from two factors. Firstly, the new flu raised awareness of prevention by hygienic measures and caused the demand for wipes with anti-bacterial action to rise. Secondly, consumers buying disposable products, such as wipes, increasingly opt for environmentally friendly alternatives. The certification of the TENCEL® fiber as fully biodegradable made Lenzing a global pioneer in this field. For example, a major US retailer in 2009 became a TENCEL® customer for its store brand of baby wet wipes. The company explains the ecological advantages of the Lenzing fiber on the package.  In technical applications, business unit Nonwoven Fibers emphasized its focus on niche products with future potential, such as components for hybrid drives and solar energy devices.

The cooperation with Weyerhaeuser started in 2008 for developing novel nonwovens products based on lyocell recorded further progress. In June 2009 a pilot plant for the production of TencelWebTM went operational at the Lenzing site. The plant produces novel cellulose nonwovens materials made from the raw material wood using the meltblown process. The product is an ecologically sound alternative to nonwovens products made from crude oil – an example of a sustainable climate policy for the industrial consumer market with positive effects on CO2 reduction. 

Source:http://www.lenzing.com/fileadmin/template/pdf/konzern/geschaftsberichte_gb_ugb_jfb/GB_EN/GB_2009_EN.pdf

Tencel in Lenzing Annual Reports (2008)

More extracts from Lenzing's Annual Reports...

In "Business Unit Textiles" the main message on Tencel appears in the photo below. 

 Sportswear is the key, but Home Textiles also gets a brief mention:

Tencel® Eco Bed, a special application for natural bed-linen, received the award as the best organic ecological product in the home textile sector in the USA.

Of more interest once again is "Business Unit Nonwovens" with the first mention in Annual Reports of Robert Smith and Malcolm Hayhurst's work on TencelWeb(tm):

Lenzing and the US company Weyerhaeuser, a global leader in forestry products, came to a basic agreement on the development of novel lyocell-based nonwovens products. The goal is to create an alternative to petrol-based plastics in the nonwovens sector by manufacturing convenience products for industry and hygiene on an industrial scale.

This project is the latest manifestation of "spunlaid cellulose" which first appeared in Courtaulds Research in the 1960's and was proposed for Tencel in 1988.  However I don't think anyone in Courtaulds saw it as an "alternative to petrol-based plastics in nonwovens".  We saw it as a way of making high-value 100% cellulose absorbent nonwovens for medical, hygiene and wiping markets at lower cost by virtue of direct-from-dope production in a Tencel plant.

Alluded to for the first time is the highly successful carboxymethylation of Tencel carried out by Hardev Bahia and Tom Burrow and commercialised by Courtaulds Research during the 90's.  The resulting hydrogel appeared first as the superabsorbent "SuperNova" fibre for tampons, and then "Hydrocel" which Convatec used to make the Aquacel range of wound dressings:

Product group medical applications manufactures upmarket cellulose fiber specialities. The focus of activity was placed on the successful implementation of innovative products, such as cellulose hydrogels for demanding wound care and also in cosmetics.

(More to come on these specialities)

Source: http://www.lenzing.com/fileadmin/template/pdf/konzern/geschaftsberichte_gb_ugb_jfb/GB_EN/GB_2008_EN.pdf

Tencel in Lenzing Annual Reports (2007)

More paragraphs extracted from the Lenzing annual reports...

There's no mention of Tencel in the section on "Business Unit Textile Fibres" or in the section on R&D. However under "Business Unit Nonwovens" we read:

The success of products based on TENCEL® nonwovens was remarkable. The convenience product sector grew considerably. Wipes for a broad range of applications – from hygiene and cleaning to medical applications – were much in demand. Sales of Lenzing fibers for technical applications increased as well. The unique properties of cellulose fibers, in particular TENCEL® enabled the implementation in new market segments such as the automotive industry, filtration technology and medical technology.  (see also Tencel Product development 1985-94)

In "Competition Rulings in Favour of Lenzing"...
The European Court of Justice, as court of last resort, ruled in favor of Lenzing...and that Lenzing had not received unjustified subsidies for its [Lyocell] production site at Heiligenkreuz (Austria)

Also, in "The evaluation of fiber sustainability" we read of a study showing Lenzing's viscose and modal to have less environmental impact than Tencel, all being better than cotton:

A comprehensive evaluation of fiber sustainability with regard to consumption of non-renewable resources, emission of greenhouse gases, impact on human well-being and impairment of ecosystems requires a holistic approach, in other words the compilation of a life cycle assessment. Using standardized methodology, a life cycle assessment for Lenzing Viscose®, Lenzing Modal® and TENCEL® in direct comparison with cotton, polyester and propylene fibers was carried out in collaboration with Martin Patel and Li Shen of the Copernicus Institute of Utrecht
University.

The evaluation of environmental impact was conducted according to the CML* method, developed at Leiden University considering the following indicators:

Tencel in Lenzing Annual Reports (2005,2006)

Apart from photos of Naomi Campbell being replaced by, amongst others, Robert Smith and Dave Hoyland (see below) the 2005 Annual Report was notable for the paucity of anything worth extracting on lyocell or Tencel.

The revisionist definition of lyocell appears...

A novel fiber, developed by Lenzing, produced by an environmentally very 

sound solvent process. Its properties enable the design and production of new and innovative products. TENCEL® is the Lenzing brand for lyocell fibers.

...and the resolution to last year's cliff-hanger...

The Austrian cartel court approved the acquisition of the Tencel group at the beginning of April 2005. The approval was preceded by an agreement with Austrian cartel offices including several conditions and reservations. The protracted proceedings, however, lead to a EUR 1.5 mill. fine for Lenzing, affecting the 2005 result. 

The 2006 report was less interesting with the usual Tencel puff and mention of R&D developing a non-fibrillating version for textiles - see also A100; Grimsby 1999. 

Robert Smith

David Hoyland in front

Source: http://www.lenzing.com/fileadmin/template/pdf/konzern/geschaftsberichte_gb_ugb_jfb/GB_EN/GB_2005_EN.pdf

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

Tencel in Lenzing Annual Report (2004)

The report for the year Lenzing acquired Tencel contains an acknowledgement of the contribution made immediately by Courtaulds Tencel staff.

From the Chairman's Statement...

The third milestone of the 2004 business year was the take-over of the Tencel group of companies*). With Tencel the Lenzing Group has become the leading manufacturer of cellulose fibers worldwide. This step has helped us secure our world-market position on a long-term basis. We will now further improve the Lyocell technology for our customers, last but not least because it is a technology for the future, due to its compatibility with the environment. 

Moreover, Lenzing is now the only global supplier that accommodates all important qualities and types of cellulose fibers under one roof. Only Lenzing is able to offer its customers this complete range of products at absolute top quality and with top service. 

In addition, with Tencel we have been able to expand our human resources to include experienced staff members and to reinforce our impact on the international fiber market.

Within only a few weeks, cooperation between the Lenzing Lyocell team and the Tencel staff led to measurable improvements of our productions results.

The new corporate structure, which we introduced in 2004, consists of business units that comprise several sites. In the course of integrating Tencel, this structure demonstrated its merits within the first year.

(More to come from 2004)

Lyocell in Lenzing Annual Reports (2003)

Another extract from the Lenzing annual reports...

The demand for Lenzing Lyocell fibers developed very positively during fiscal 2003; the intensive marketing activities proved successful. Production lines worked to full capacity, handling orders both in the textile area and for nonwovens. Lenzing Lyocell has succeeded in opening up new, promising growth markets concerning home textiles. Thanks to its outstanding properties as a particularly pure fiber made of wood, a natural raw material, there is a strong demand for Lyocell in this market segment.

Against this background of a lively demand, completing the expansion program at the Heiligenkreuz site during fiscal 2003 came just in time. A total amount of EUR 36 mill. was invested into building a second production line. The new facilities were successfully taken into operation at the beginning of 2004, which doubled the production capacity at Heiligenkreuz to 40,000 tons per year. The bigger production quantity is also the basis for sustainable improvement of the earnings situation regarding Lyocell, since this makes it possible to achieve the corresponding reductions in specific production costs.

In the course of expanding capacities, the staff level was raised to 180 employees at the Heiligenkreuz site. Furthermore, the energy supply center of the Heiligenkreuz industrial park was bought in 2003, in order to secure energy supplies at favorable prices.

In September 2003 a deflagration occurred on the first production line, which caused a fire and considerable material damage. The incident was due to the faulty operation of an ancillary unit. The incident did not occur during normal operations, but when the existing production line was started up after a scheduled standstill, required in the course of the construction work on the second production line. The material damage and the costs of the temporary production standstill were covered by insurance policies.

The first months of 2004 were characterized by the start-up of the second production line at Heiligenkreuz. Since demand for Lenzing Lyocell fibers continues to be positive and expanded production capacities are available, one can expect a corresponding improvement in sales and earnings in comparison to 2003.

R&D
Lenzing AG operates a Lyocell pilot plant at the Lenzing site. This has helped to develop quality assurance steps for the big production volumes of the large-scale plant at Heiligenkreuz. Moreover, the production processes were improved, which will make it possible to use different pulp qualities.

Lyocell in Lenzing Annual Reports (2002)

Another lyocell extract from an old Lenzing annual report...

Fiscal 2002 was the most successful year to date for Lenzing Lyocell. Lenzing Lyocell fibers succeeded in recording a clear upturn on the market. An expansion of capacities is the consequence of this positive development.

Lenzing Lyocell GmbH & Co KG developed to our great satisfaction during the year under review. The product and marketing campaign, which was launched recently, made it possible to achieve a significant increase in sales in spite of a slack cyclical environment. Production facilities worked to full capacity. In the course of the year, technical adaptations helped to expand capacities by about 20% and to reach a new record level. On account of all of these measures, the result was substantially improved during the year under review.

As regards products, new priorities were set, both in the textile segment and the nonwovens area, and the customer base was broadened. New attractive areas of application for Lenzing Lyocell are, for example, terry cloth products and other products in the field of home textiles. Lenzing Lyocell filling fibers for bedding enjoy a high level of acceptance.

Decision taken on large-scale investment
On account of the good demand, the decision was taken during the year under review to further expand capacities by building a second production line. The costs required by the investment will amount to about EUR 35 mill. The additional production capacities will be available in early 2004.

Outlook
At the beginning of 2003, the energy and material supply center of the Business Park Heiligenkreuz was purchased by Lenzing AG, in order to secure energy supplies at favorable costs on a long-term basis. As a result, it will now be possible to benefit from the advantages of integration in the energy field as well, by optimally adjusting energy generation to fiber production. It is expected that there will be a further increase in sales in fiscal 2003. Activities will focus on finishing the second production line in time. Intensive marketing activities will go hand in hand with the increase in capacities.

R&D
...Another priority was the improvement in the Lyocell process technology, with the aim of optimizing and securing Lyocell quality, in order to increase productivity and to reduce the specific investment costs. This is also of major importance in connection with the imminent capacity expansion at the Heiligenkreuz plant. The development of Lyocell fibers for hometextile applications was continued with consistency, since this segment recently managed to achieve considerable acceptance by the market.

In July 2002 the fifth anniversary of the Lyocell plant at Heiligenkreuz was celebrated. This was followed in October 2002 by a seminar for journalists dedicated to Lyocell.

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Lyocell in Lenzing Annual Reports (2001)

Another lyocell extract from an old Lenzing annual report.  Once again Naomi Campbell's image decorated a few pages.

A lower demand from textile customers and the reluctance to purchase on the part of US businesses acted as a brake on the development of Lenzing Lyocell. It is positive to note that the delivered quantities were slightly above last year's level, although the overall conditions continue to be difficult. 82% of the fibers produced at Heiligenkreuz / Burgenland, Austria, were exported. The main markets in Europe are Italy, Spain and Portugal. Furthermore, deliveries go to China, Japan, South Korea, as well as Brazil and the USA. The result of the company continues to be negative, in spite of intensive measures to counter this trend. The fashion industry uses Lyocell for casual and jeanswear, as well as for products worn close to the skin, such as T-shirts and lingerie/underwear. Home textiles is a segment that is expanding continuously. The newly launched low fibrillation fiber Lyocell LF and the filling fibers are promising developments. Fibers for technical applications offer further good prospects.

 LYOCELL R&D: This year again, efforts to optimize the Lyocell technology were at the center of attention. New fibers were developed and existing ones were improved. The company stepped up activities to further develop a low-fibrillation Lyocell LF fiber, to improve the suitability of Lyocell for the nonwovens sector, as well as the use of the specific property profile of this new fiber generation for home textiles and technical applications.  

The following paragraph referred to CVC's attempt to merge Courtaulds and Lenzing's fibre interests. During the period when regulatory approval for this deal was being sought in the USA, Courtaulds largest and most efficient viscose plant in Mobile Alabama was closed on the basis that the single remaining US viscose plant operated by Lenzing in Lowland Tennessee should be preserved.  (It would be interesting to learn more about the thinking behind this. At the time, Lowland appeared the less viable plant!)

On 17 October 2001 the European Commission, for reasons of competition law, prohibited CVC Partners to acquire the majority of the Lenzing shares. This does not create any problems for the Lenzing Group, as we are able to continue on our course successfully on account of our size and global leadership position. The new majority shareholder, the B & C Group, considers itself to be the Austrian core shareholder with long-term entrepreneurial interests.

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