Tencel stretches the bounds of fibre profits (1996)

A major update on the Tencel business by Alex Scott of International Chemical Business magazine based mainly on an interview with David Wilkinson:

Industry experts have been backing lyocell, a high performance cellulose fibre, in increasing numbers since its emergence from the Courtaulds pilot plant in the UK in 1988. But are they justified in tagging it as the fibre of the future? Alex Scott reports on the latest twists in the emergence of lyocell.

'These are Next jeans - they are a 40:60 mix with cotton. Oh, and this is Versace,' says my guide peeling a brilliant orange blouse from its hanger. The white tiles and soft lighting belie a chic clothes boutique - but really I am being treated to a view of the future of the cellulosic fibre, Tencel, at Courtaulds' London headquarters.

'It is very comfortable, and strong, and attractive, and is certainly superior to viscose rayon,' says David Wilkinson, an executive director at Courtaulds, responsible for the company's fibres business.

With demand increasing it is apparent that Wilkinson is not the only one to be impressed: 'Tencel has substantial advantages over viscose, which is a 1.7m tonne/year market... the potential of Tencel is considerable,' says one UK analyst.

An Upbeat Release: Courtaulds Looks Ahead (1996)

Courtaulds' Tencel fibre looks set for a buoyant year after CEO Sipko Huismans said: 'We cannot keep up with demand.'

Production is underway in Grimsby, UK, and Mobile, Alabama, and capacity is set to top 100 000 tonne/year by end-1997. 'Tencel holds about 0.1% of the world fibre market but its potential is huge,' he said.

Courtaulds this year won a patents dispute with Lenzing over Tencel - a decision is still under appeal in the US. 'We do not fear another competitor,' said Huismans. 'Two producers would expand the market faster than one.'

Last year Tencel was in the black for the first time and is set to make significant turnover and profit gains this year. However, Tencel's success was offset by other divisions.

27 May 1996 [Source: ICB]

Courtaulds accelerates expansion plans, but Tencel has cost problems (1996)

• Tencel's for the next century.  Short term it has problems.
• Excessive cost of Tencel...too high to command anything but the designer market.
• Courtaulds says it is reducing its costs, but its initial confidence has given way to subdued assertions that its five-year lead in the marketplace will guarantee it a strong position.
• Lenzing claim cost advantage.
• Prospect of Asian giant (Garuda) buying Lenzing stake and pumping millions into Lyocell.

Lyocell is much stronger than viscose, allowing it to be used in finer fabrics, and absorbent, unlike synthetic fibres such as nylon, acrylic and polyester. Lyocell's developers say it creates fabrics that handle like cotton, feel like silk, hang like wool and are machine washable. It also offers environmental benefits, such as non-toxic production, little waste and renewable raw materials.

Because lyocell is similar in texture to silk, it is expected to become very popular in east Asia, where an increasingly affluent middle class is demanding high quality, colourful fashions suitable for the warm, high humidity climate experienced across the region.

In the lyocell process wood pulp is dissolved in N-methyl-morpholine-N-oxide (NMMO) solvent to produce 'dope' which is then extruded into a spinning bath of solvent, producing cellulose filaments. By contrast, the viscose process involves chemical breakdown of the wood pulp and produces sulfurous effluents.

In addition to the fibre's superior properties - high wet and dry strength and low shrinkage - lyocell's production process is simpler and quicker than viscose's. It is estimated that, from start to finish, the lyocell process takes three hours compared with over 40 hours for viscose.

Both Courtaulds and Lenzing developed their processes for making lyocell from wood pulp on technology processes licensed from Akzo, the Dutch chemicals company. Patent rights to lyocell are claimed by both Courtaulds and Lenzing, tying up global development plans in legal battles on both sides of the Atlantic.

Courtaulds was the first to produce lyocell staple fibre commercially, and is still the only commercial-scale producer. The company has put hundreds of millions of pounds into the fibre, which it calls Tencel, in the hope that it will provide the

Lenzing and Courtaulds boost Chinese investments (1995)

Lenzing and Courtaulds, Europe's two largest synthetic fibre manufacturers, are to boost their investments in China. Courtaulds is already looking at investing US$180m in a plant to make 50 000 tonne of Tencel fibre in China for local and regional textile mills. A final decision on location is expected by the end of 1996.

The company has already announced plans to expand total Tencel capacity at its Grimsby, UK, and Mobile, US, sites to 75 000 tonne/year by 1997.

Lenzing has obtained a 'large order' to modernise a viscose fibre plant in India. Plans are also afoot to expand the capacity of South Pacific Viscose, Lenzing's Indonesian subsidiary in Purwakarta, Java, from 75 000 tonne/year of viscose to 110 000 tonne/year by 1997. Lenzing's investment manager Mick Stempel described the project as a 'cash cow'.

Tencel Demand exceeds Supply: Courtaulds goes ahead in Europe (1994)

COURTAULDS HAS confirmed it is planning to build a commercial-scale plant in Europe to produce Tencel, its new cellulosic synthetic fibre. Plans are contingent on approval for the long-planned merger of its European viscose and acrylic staple fibre businesses with those of Hoechst.

Two sites are under evaluation for the plant, Courtaulds' own site at Grimsby, UK, where production was piloted, and Hoechst's Kelheim site, near Munich, Germany. Despite reports in the UK press that a decision on the new plant is imminent, a Courtaulds spokesman confirmed last week that board approval is some months away.

An investment of around £80m ($119m) is envisaged. Capacity will depend on final discussions, but is expected to be around 20 000 tonne/year. An onstream date of 1996 is targeted, but will depend on the timing of the board approval.

The first commercial-scale plant came onstream at Mobile, Alabama, in mid-1992, with a capacity of 18 000 tonne/year. A second plant at the site, to raise capacity to 43 000 tonne/year, is due for completion in mid-1995. The UK pilot unit continues to operate, producing around 1500 tonne/year. Together the plants supply Japan, where the Tencel market is most developed, the US and Europe.

Courtaulds reports a very high market acceptance for Tencel, with demand outstripping current capacity. 'We should be in an easier position to develop the market once the new US capacity comes onstream,' the spokesman said.

04 April 1994 [Source: ICB]