Profile of Lenzing: A Leader in Cellulosic Fibres and a Joint Venture Partner in Carbon Fibres

Production, Plants and the Nanjing Line

In 2005 Lenzing's total fibre output was 453,806 tons. In 2007 its production capacity increased further following the start-up of a new 60,000 tons per annum viscose fibre line in Nanjing, China. In early 2007 the company operated two viscose fibre plants — one in Lenzing, Austria, and another in Indonesia — and three Tencel lyocell fibre plants, in Heiligenkreuz, Austria; in Grimsby, UK; and in Alabama, USA. The profile's contents cover the company's development, products, production, the fibre manufacturing process, the advantages of cellulosic fibres over other fibres, financial performance, and outlook.

The Integrated Lenzing Site

The company's viscose unit in Lenzing boasts a number of unique advantages. Its entire wood pulp requirements come from an integrated pulp facility, while its heat and power needs are sourced from a nearby power plant which is owned and operated by Lenzing. This integrated approach enables the company to source low cost, high quality wood pulp and generate sales from by-products of wood processing. It also gives Lenzing complete control over its energy supply; as a result, just 18% of the Lenzing site's fuel comes from fossil fuels. Integration of that kind — pulp, fibre, energy and by-products on one site — is the manufacturing counterpart of the company's market strategy of proprietary technology and speciality fibres.

Cellulosics Against Cotton

It is generally expected that demand for cotton will exceed supply in the near future, and executives at Lenzing believe that cellulosic fibres can fill part of the shortfall in supply. Cellulosic fibres offer a number of practical advantages over cotton, such as moisture management for sensitive skin, a variety of surface effects, improved durability and flame retardancy. In terms of the manufacturing process, cellulosics result in a higher average yield per hectare, significantly lower water usage, renewable resources (wood), reduced pesticides, fertilisers and insecticides, and zero reliance on genetically modified (GM) crops. The profile sets that case out as the company's strategic context: a fibre family made from wood, positioned to grow as cotton supply tightens, with a carbon fibre joint venture extending the group's reach beyond cellulosics altogether.