So Lenzing were having a difficult time too. The phrase "prudential reserves of considerable magnitude are being built up in order to finance further (group) restructuring processes" maybe illustrates the differences between Austria and UK businesses.
Although it did not disclose detailed figures, Lenzing said "prudential reserves of considerable magnitude are being built up in order to finance further (group) restructuring processes."
A company spokesman declined to quantify the exact scale of the restructuring costs but hinted that they would be at least Sch100m ($8m). He explained that they covered Lenzing's affiliated companies in Brazil and the US.
Lenzing blamed foreign exchange difficulties in Asia for a 1997 loss at South Pacific Viscose (SPV) in Indonesia.
"This factor, together with scheduled start-up losses at Lyocell and the disappointing result scored by Bacell, Brazil, will definitely lead to a deterioration in the Lenzing Group's results for the year 1997." The Lyocell fibre business is a rival to Tencel, made by Courtaulds of the UK.
Lenzing group losses last year totalled Sch30.3m ($2.54m) and compared with a profit in 1995 of Sch312.6m.
However, Lenzing said the restructuring measures will have a "clearly positive effect" on the group results by 1998.
It expects Lenzing Fibers Corp in the US to achieve a "clearly more positive result" in 1998 and said Bacell is "showing clear indications of improvements in operational terms." Lenzing said SPV would be generating positive results again in 1998.
In direct contrast with the group's 1997 results, Lenzing said its domestic operation Lenzing AG would report operating profits up Sch200m on 1996, when the company made a loss.