Courtaulds pins hopes on Tencel: Asia plant is going ahead (1997)

Tencel sales in Japan had stalled and the delay in the start of the new Grimsby Tencel plant was probably "helpful". However:

• The South Asia Tencel plant "is going ahead"
• Another plant "most likely in China": decision in 2003

Courtaulds will maintain heavy investment in its promising Tencel fibres business as other units continue to be hit by negative currency effects. Chief executive Gordon Campbell described potential growth for the product as 'very significant to the company's future although it represented only 4% of turnover last year'.

Campbell confirmed the company is going ahead with an investment of about £150m ($254m) for a 60 000 tonne/year Tencel plant in Indonesia, Singapore or South Korea in spring 1998. He said a further Asian Tencel production site would most likely be built in China but no decisions will be made until the year 2003.

Lenzing Lyocell on the Fast Tack (1997)

Here's a comprehensive Nov. 1997 overview of the Lenzing Lyocell development by Marjorie Walker of ICB, quoting Heinrich Stepniczka.

• Heiligenkruez at 10,000 tpy in the summer, 12,000 tpy now and 15,000 tpy by Xmas.
• 60,000 tpy plant next in Asia, Lenzing or Heiligenkreuz.
• Existing investors will have to be convinced pretty quickly of Lenzing Lyocell's success or they will vote with their feet.
• Industry sources do expect Lenzing Lyocell to be a success

Lenzing's new Lenzing Lyocell fibre is making its commercial debut on world markets. After years of development and patent disputes with Courtaulds, the Sch1.5bn ($120m) 12 000 tonne/year plant at Heiligenkreuz, Upper Austria, came onstream this summer and Lenzing is already pushing ahead with plans for doubling its capacity. There is even talk of a second major facility.

A lot rides on Lenzing Lyocell's success. Lenzing is the world's largest producer of viscose fibre but the global market shrank in 1996 and has shown little growth in 1997. In Europe and the US environmental expenditure and declining viscose

Courtaulds eyes No 2 Asian Tencel plant (1997)

COURTAULDS may set up a Tencel manufacturing plant in India after completion of intensive market testing.

The move would be its second major investment in Asia. The company will announce the location of its first Asia Pacific Tencel plant later this year. It has drawn up a shortlist for the location of the Asia Pacific plant - South Korea, Indonesia and Singapore.

'As for India, we will first have to see how strong the domestic market is,' said Alan Jones, Courtauld's commercial director for Tencel in Asia Pacific.

Courtaulds has launched a Tencel marketing tie-up with five Indian mills - Arvind, Raymond, Morarjee, Garden Silk and Madura Fabrics. The mills will use Tencel, a 100% natural solvent-spun cellulosic fibre, to manufacture either 100% Tencel fabric or a blend with other fibres.

Jones told ACN that a decision on a Courtaulds Tencel plant in India was far from imminent. 'It will probably be the next century before we come to the conclusion as to whether it is worthwhile producing Tencel at a plant in India,' he said.

Courtaulds has a worldwide Tencel capacity approaching 100 000 tonne/year.

06 September 1997 [Source: ACN]

Cheap Cotton lowers Lenzing expectations but longer term the Cellulose Gap will help (2012)

The latest Tencel News from Lenzing.  There's just a hint of the old Courtaulds "we've got a great long term future if only we can get through the medium term" about this release!

At a Berenberg conference in London, CFO Thomas Winkler presented on behalf of Lenzing. On the company’s strategy, Mr Winkler highlighted the positioning of its fibre products (viscose, Tencel) against cotton and synthetic fibres. The main drivers for the strong demand growth for viscose (in excess of 10%) are megatrends such as population and wealth growth, the latter leading to a substitution of synthetics by organic fibres. In the long run, the “cellulose gap” equity story is very intact, Mr Winkler said.

A Berenberg analyst said that they feel the company is now very frank about communicating that there is a clear dependency of viscose prices to cotton prices (Lenzing’s fibres command a 10-15% premium over cotton). With cotton prices at low levels and Chinese stockpiles very high, pricing is currently weak – a situation that will most likely not change in the very short term. Lenzing will therefore only reach the lower end of its EBITDA guidance this year. In the mid-term, however, cotton dynamics could reverse, as cotton competes for acreage, consumes 27x more water per hectare than corn and there is no drought-resistant seed.

Source: Boerse Express

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]