Thursday, December 13, 2012

Lyocell Problems: From Lenzing Annual Report 1998

This post jumps ahead to the end of the period in review but is interesting in view of the sense of disappointment it communicates.  I'll look out the Courtaulds Annual Reports from this time.

The introduction of Lyocell to the market must be expected to require considerably more time than was originally assumed and will require additional funds. The Board of Management is, however, convinced that this fiber of a high-value technology has great potential for the future, although Lyocell will continue to generate a sometimes considerable burden on the business result in the years to come. 

...research in 1998 focussed on the further development of the Lyocell technology, especially in the transition of a low-fibrillation Lyocell fiber to large-scale technical production and market maturity, as well as on successfully completing the development of a flat  film on NMMO basis (Lyocell films). 

Activities focused on stepping up the market launch of the Lenzing Lyocell fiber. We were able to obtain good results with our product, especially with the Haute
Couture sector, with applications ranging from comfortable leisure - w e a r garments for men to upmarket lingerie collections for women. However, in spite of this success, the forecast sales quantities were not reached. One main reason for this development was primarily the dramatic decline of that textile segment where the Lyocell fiber would have created or enhanced novel surface effects on account of its special properties, such as for example the “soft denim“, “garment wash“ and “peach skin“ effects. In addition, the crisis in Asia caused an important export market like Japan to fall behind, which made it even more difficult to plan production and the accompanying operative situation. 

In November 1998, the Lyocell marketing and sales organization was integrated into the worldwide distribution of Lenzing AG. This created the basis for more effective and efficient marketing efforts.  In 1998, the production of Lyocell fibers at Heiligenkreuz , Austria, was also successfully transformed to use chlorinefree bleached pulp as a new primary material. This is another important step in actively applying Lenzing AG’s pollution-control philosophy. In recognition of its especially environmentally friendly technology, Lenzing Lyocell G.m.b.H. & Co KG was awarded the ecology prize of Austria’s industry. We are proud of this recognition, which is the result of many years of innovative research activities at Lenzing AG. 

In 1998, the EU Commission began to review the Lyocell project at Heiligenkreuz in connection with the subsidies granted. This review is a necessary measure, which is prescribed and required under EU subsidization provisions. In this connection, Lenzing AG is cooperating very closely with all bodies involved. The review is expected to be completed at the end of 1999. 

R&D Expenditure for research and development in the different sectors of Lenzing AG amounted to ATS 157.4  million*), which is a respectable 2.6 % of the sales of Lenzing AG and once more on a very high level that is far above the industry’s average.  The focus was on the production-oriented optimization of the Lyocell technology. A new type of Lyocell fiber with low fibrillation is meant to make further processing along the textile chain easier. The development was s u c c e s sfully completed and is planned for full-scale technical implem e n t a t i o n as of the middle of 1999.

Development work on flat films based on the Lyocell (NMMO) technology has been continued intensively. In December 1998, a cooperation agreement was signed with the Belgian company UCB, which is the market leader for cellophane films. Lenzing and UCB intend to join efforts in further developing this new product and bringing it to market maturity. The fact that this cooperation agreement was signed is a testimony of Lenzing AG’s high level of competence regarding the Lyocell technology. This type of cooperation serves as a pilot example of successful research activities by Lenzing AG, as well as a model for future cooperations and  alliances.

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