Geoffrey Owen's Tencel lyocell history extracts (part 5)

Geoffrey Owen of the Department of Management, London School of Economics presented a paper at SPRU in October this year entitled "Innovation in the man-made fibres industry: corporate strategy and national institutions." It is based on unpublished material made available to the author by Akzo Nobel, Lenzing and Courtaulds (amongst others) and is available in full here on the web as a PDF file. It contains excellent sections on Tencel lyocell development history, the fifth extract of which is reproduced below.  This deals with the early history of Courtaulds putting the Tencel development in context.  The final extract will do the same for Lenzing and their lyocell.


Founded in 1816, Courtaulds became one of the country’s leading silk weavers, but by the end of the century its main product – mourning crepe – was in decline and new sources of growth were needed. In 1904 it acquired the patents for the viscose process. A factory was built in Coventry, and over the next few years Courtaulds established itself as the world’s leading rayon producer. It was the first European company to start rayon production in the US; its American subsidiary accounted for a large share of its profits in the inter-war years.  

Following the invention of nylon, Courtaulds was eager to get into synthetics, and in 1940 it formed a joint nylon venture with ICI. (ICI had a patent-sharing agreement with DuPont and thus had access to the American company’s nylon technology.) However, it was kept out of polyester by ICI, which was the principal patent holder, and although Courtaulds launched its own acrylic fibre, Courtelle, in 1959, it was still heavily dependent on slow-growing cellulosic fibres. Partly for that reason, it diversified into other industries, principally paints and packaging. It also had a small textile business, derived from its earlier vocation as a silk weaver. 

The diversification drive was stepped up in the mid-1960s, following an abortive attempt by ICI to take over Courtaulds. The new management which took control of the company after the bid adopted a policy of forward integration, investing on a large scale in textiles and clothing in order to secure captive outlets for its fibres. The company also made further acquisitions outside fibres, principally in paints. A new business that was started in the 1960s, based on licensed technology, was carbon fibre, which is described more fully in the next section; carbon fibre later formed part of a new division, Courtaulds Advanced Materials.

The investment in textiles and clothing proved to be a serious mistake and in the mid-1970s Courtaulds was in financial trouble. Many of its textile mills and clothing factories could not compete with imports from low-wage countries; cutbacks in capacity were unavoidable. In fibres Courtaulds had been successful with Courtelle but still had a big commitment to cellulosics, the outlook for which looked unpromising. Of its various diversifications only paints had done well. 

What followed in the 1980s was an attempt to reposition the company, aimed at businesses in which Courtaulds had, or could reasonably hope to create, a competitive advantage. Textiles and clothing were demerged into a separate company, Courtaulds Textiles; several downstream chemical businesses, principally in coatings and advanced materials, were acquired; and a
woodpulp mill in South Africa which had been the principal supplier to Courtaulds’ rayon factories, was sold. Fibres might have been divested during this period, but Courtelle was profitable, and the company had developed a new cellulosic fibre, based on the solvent spinning process (see below),
which appeared to have excellent prospects. In 1990 the company decided to manufacture the new fibre, branded as Tencel, in the US; the factory came on stream in 1992. 

By the mid-1990s Courtaulds had two main businesses, paints and fibres, of roughly equal size and at this point the company’s financial position began to deteriorate. Profits from the older fibres had collapsed, while sales of Tencel, after a promising start, were slowing down. Several of the acquired businesses were performing poorly. The best part of the company was the paints division, and it attracted the attention of international paints companies which were seeking to enlarge their stake in this industry. In 1998 Akzo Nobel, the Dutch company, launched a successful takeover bid for Courtaulds. Its only interest was in paints; the fibres business, including Tencel, was later sold to CVC, a private equity firm.

Seismic Changes Part 4: Birla and the Future (2004)

This is the last part of an article written at the time of the Lenzing take-over of Tencel and reviews the state of man-made cellulosic fibres at that time.  Click here to go to the first part.

Birla Viscose: a new line and a new process dedicated to nonwovens (Continued from part 3)

One of the Thai production lines has been uprated to make a better fibre for the Western nonwoven markets and at the time of writing they are starting up a completely new 20,000 tonne/annum line dedicated to the same sector.  This line is an addition to the 90,000 tonne/annum Indonesian plant and has been designed to use a unique zinc-free process developed by Birla Research at their HQ in Nagda[2], India.  Zinc became a key ingredient of viscose spin-bath chemistry back in the second decade of the 20^th century to allow the production of stronger, more extensible fibres and has stayed there ever since.  Birla correctly argued that zinc and the traces of other heavy metals which can accompany it in raw material form is not necessary for disposable nonwoven production.  According to Shubkham Varshney, Birla’s Vice President of International Business, the zinc-free fibre as produced in Indonesia has a tenacity of 2.6 gms/denier with 20% extension (dry) and somewhat brighter appearance due to the C-shaped cross-section which emerges from the zinc-free system.  This lustre may be undesirable in nonwovens so titania is used to kill it, but other cross-sectional effects such as increased softness and bulk remain apparent. 

In addition to developing the new zinc-free process, Birla Research has now completed its new pilot line for modal fiber production and also claims to have their lyocell pilot line operating successfully.

New Plant in China?

Mr Varshney also revealed that Birla are exploring greenfield sites in China with a view to building a major new viscose plant, with a 30,000 tonne/annum  output first phase.  This would be the first line in China to be based on 100% imported wood pulp cellulose and hence be capable of much higher quality than the smaller Chinese plants which have been designed to use cotton-linter pulps.  The fibre would be a quality product for export and for China’s rapidly expanding hydroentangled nonwovens industry.

What does the future hold?

After decades of declining sales, the nonwovens-led turn-around in the fortunes of man-made cellulosics should continue.  Global use of the fibres is likely to increase providing their price relative to cotton and polyester remains much the same as in the last year.  Wet-wipe demand for cellulosics will continue to rise for several years yet, but if rayon prices increase too much the pressure to develop the harder to use cotton blends and harsher woodpulp wipe-blends will intensify. 

Explosion and fire halts Lyocell output at Lenzing plant (2003)

LONDON (CNI)--Austrian fibres group, Lenzing, may declare force majeure on production of its cellulose fibre Lyocell following an explosion at its 20000 tonne/year capacity Heiligenkreuz, east Austria, plant.

A company spokeswoman told CNI on Tuesday that an explosion earlier today resulted in a fire in which four people suffered minor injuries. "Production has stopped and we are considering a force majeure for production from this plant," she added. Lenzing was unable to quantify the extent of the damage or estimate when production might resume. She could not say if the company's plans to double capacity at the plant by the end of 2003 have been jeopardised by the incident.

Lenzing said a team of experts is investigating possible causes of the explosion. Repairs will begin when the cause of the blast has been identified, the company added, so that production can resume as soon as possible.

Thomas Fahnemann, chairman of the board of management and Franz Raninger, member of the management board, will inspect the site tomorrow.

By: Will Beacham 23 September 2003 18:07 [Source: ICIS news]

(An early indication that Lenzing's lyocell process may differ from Courtauld's in how it controls the exotherms which can occur when the solution of cellulose in amine oxide gets too hot.)

Seismic Changes in Cellulosic Fibres - Part 3 (2004)

Prior to 2000 Tencel was produced as a textile fibre, with a few nonwovens producers tolerant of less than optimal fibre presentation doing pioneering process and market development and proving that it really did perform as advertised in the final nonwovens.  Now there is a high-crimp nonwoven version of the fibre, coded HS260 (because it has run on the latest injection cards at 260m/min) which is available in deniers between 1.25 and 3, finished specially for hydroentanglement and dulled with up to 1.2% titania.  Using these fibres, the pioneer converters are now expanding rapidly and anyone who uses viscose in nonwovens is keen to try Tencel.  45% of nonwoven Tencel is currently bonded by hydroentanglement, 35% by needling, 10% by latex and the remainder is short cut to 6mm and sold to wet-laid nonwoven producers and special papermakers.

Lenzing’s success in nonwovens has been with viscose rather than lyocell.  Modal fibre apart, 50% of their 200,000 tonne Austrian viscose output now goes to nonwovens, up from about 15% before the Acordis factory closures mentioned above.  Their 120,000 tpa Indonesian plant is dedicated to the Eastern textile markets, and last year they pulled out of the USA; “Liberty Fibers” being created from their Lowland operation in a management buy-out (see below).   They report strong ongoing business and are investigating expansion in China via their office in Shanghai, but refusing to be drawn on whether this venture would be viscose, modal or lyocell based.  One notable nonwoven success with Lenzing Lyocell has been the development of a new application (for cellulosics) in duvet and quilt fillings.  This sector, initially opened up by Courtaulds Research using pilot-plant fibre, requires a silky-soft heavy denier lyocell which Tencel were not able to make on the production units.

Liberty Fibers

Liberty Fibers slipped into Chapter 11 shortly after Lenzing pulled out, and

Austria's Lenzing buys Tencel; wins 'Lyocell' battle (2004)

LONDON (CNI)--Austrian fibres group Lenzing on Wednesday said it had taken over the entire Tencel group of companies from Corsadi BV, part of venture capital group CVC, for an undisclosed sum.

The acquisition, which takes effect from 4 May, further strengthens Lenzing’s position in the high value cellulose fibres market and combines the two former rivals that first developed the revolutionary wood fibre discovered in the late 1980s.Tencel has a total nominal capacity for Lyocell cellulose-based fibre of 80 000 tonne/year at plants in the US and the UK. Its sales in 2003 were Euro100m ($120m). Lenzing has a production capacity for Lyocell of about 40 000 tonne. Its 2003 Lyocell sales were not disclosed.

“The acquisition marks a milestone for the Lenzing Group,” Thomas Fahnemann, Lenzing managing board chairman said. “We are tripling our Lyocell capacity and thereby reaching the critical size that is necessary for a sustainable and profitable Lyocell operation.”

Lenzing expects to use the three available Lyocell production sites more flexibly in future to react to market demand.

The deal combines marketing capabilities and brand names for the wood-based product as well as technical know-how. Lenzing and Tencel developer - former UK fibres and coatings company Courtaulds - were at loggerheads through the latter half of the 1990s developing technology, production and markets for the new product.

Commenting on this deal, Fahnemann said he expected “major stimuli” from joint development work “from the broad mutual exchange of experience and technology that has now become possible”.

Tencel was planned to be combined with Lenzing in 2001 when CVC bid for an 80% stake in the Austrian company, wanting to merge it with its man-made fibres business former Akzo Nobel unit Acordis. That large deal was, however, blocked by European Union (EU) competition authorities and Acordis subsequently broken up.

Lyocell is the generic name for fibres made from wood pulp by a direct solvent, closed-loop cycle process. Lenzing markets its fibres under the ‘Lyocell by Lenzing’ brand. Tencel is the brand name for Tencel groupLyocell fibre products.

By: Nigel Davis 05 May 2004 15:25 [Source: ICIS news]