Pat White: 25 years of Tencel Development (2004)

Here's a summary of a rare public paper from Pat White, then Technical Director of Tencel Ltd and writing at the time of the Lenzing takeover.  It was given as the Keynote Speech at the 2004 TITK Alternative Cellulose conference in Rudolstadt Germany. 

Pat White leaving TITK with a present from TITK

Pat White, Tencel Ltd's Technical Director reviewed 25 years spent taking the lyocell process from curiosity to reality. Charged in 1979 with developing a low cost, environmentally-friendly route to rayon which would allow the venerable viscose process to retire gracefully, he rapidly identified NMMO as the most promising solvent. Fibres made from NMMO were all but indistinguishable from the premium Japanese polynosic rayon in character, so the key developments were to devise a highly efficient recovery system for the expensive solvent, and to optimise the process to deliver acceptable throughputs despite the solvent's tendency to degrade cellulose explosively if pushed too hard. The success of the engineering development coupled with a strong fashion-led Japanese demand for fibre led to rapid expansion and Lenzing's entry into the technology. The result: excess capacity because the projected long-term increase in fashion-sales proved unsustainable. Fibrillation and its control has dominated process and market development from the start:

New non-fibrillating Tencel Variant, A 100, appears at Grimsby (1999)

One of the biggest synthetic fibre manufacturers in the world is Akzo Nobel of the Netherlands. Akzo Nobel plans to split off its fibres business, Acordis, in the second half of 1999. Created as a result of Akzo Nobel's takeover of Courtaulds last year, Acordis has sales of around $12bn and starting operating as a separate business under Akzo Nobel from 1 January 1999. It claims it is the world's largest dedicated fibres production company.

Acordis employs around 19 000 people worldwide and has its headquarters in Derby, UK. 'The Courtaulds and Akzo products are different, but do form a comprehensive range,' Acordis maintains. The main thrust of the integration is in aligning management and organisational styles.

The group has production facilities in Germany, the Netherlands, the UK, the US, Brazil, Italy, Spain and Poland, where it makes synthetic fibres and speciality materials for industrial, textile, medical and hygiene applications.

It has been in loss since the onset of the economic crisis in Asia.

'Our proposals are designed to restore Tencel's profitability while retaining the flexibility to increase rapidly as demand rises,' the company says. Central to this is the flexibility of the new Grimsby plant, which is equipped to produce a new Tencel variant, A100. A100 has surface characteristics which open up a much wider range of end uses. Initial market reaction has been extremely positive. The A100 capability can be retrofitted to the Mobile operation as demand increases.

David Wilkinson, Acordis Director responsible for Tencel, comments: 'Tencel was the first new textile fibre for 30 years when it was launched in 1992, and introduced radically new standards of aesthetics. Until the Asian crisis, demand frequently exceeded our ability to supply. This is a temporary setback. We remain convinced that, the current situation notwithstanding, Tencel is a fibre of exceptional market potential

1st April 1999 Source ICIS

The Original Financial Assumptions - Part 2 (1986)

This continues from Part 1.  Comments later...

The Original Financial Assumptions - Part 1 (1986)

The recent posts of analysts views of Tencel and their estimates of costs reminded me to check back to the original documents to see the Courtaulds Research projections made 10 years earlier in 1986.

The differences are, not surprisingly, substantial, but not all due to overoptimism on the part of Courtaulds Research.  More comments later...

The Analysts View of Tencel - Part 3 (1997)

Here's another BZW analysis a few months after Part 1 with a different view of Tencel.

Why?

• "Japanese Demand has slowed recently"
• Grimsby Tencel start up delayed a few months by strike

(Typo in first line doesnt inspire confidence either!)