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.