Friday, February 8, 2013

Seismic Changes in Cellulosics: Part 2 - Tencel for Nonwovens (2004)

After CVC’s failure to acquire Lenzing and what appeared to be the closure of one too many of their viscose plants, they were clearly no longer likely to dominate the world’s rayon supply.  Acordis as a whole or in parts was put up for sale and whilst offers for the whole company were considered no deal was concluded.  Late last year, CVC created Corsadi, collecting the arguably more saleable parts[1] of the Acordis group within a financial structure more likely to encourage a sale.   Shortly afterwards it became apparent that Lenzing were interested; an article by the Austrian APA-OTS agency on 25/2/2004 apparently confirmed this, but neither company would comment.  Finally the Tencel-only deal was the talk of the IDEA04 nonwovens show in Miami, and the official press release emerged several days later on May 5th.

So, here we are at the start of a new era in cellulosic fibres.  Let’s take stock.

Tencel by Lenzing

By acquiring Tencel, Lenzing add a nominal 80,000 tonnes of lyocell capacity to their 40,000 tonnes at Heiligenkreuz, to give 120,000 tonnes potential production from 3 plants on two continents.  With the original Tencel factory still in mothballs in Mobile, and with Lenzing’s second 20,000 tonne stream at Heiligenkreuz still ramping up, the actual fiber availability is probably 30,000 tonnes below the nominal, but this will change fast.  Acordis would have liked to re-open the original Tencel plant some time ago but had to await acquisition by a well-financed forward-looking fibre company.  This has now happened and it is difficult to see this capacity remaining idle for long, because like viscose, the lyocell business is booming due to the high demand
from nonwoven producers in general and from the  hydroentanglement technology being used to make wet-wipes in particular.  Tencel has benefited from this demand more than Lenzing’s lyocell, probably because Acordis, and Courtaulds before them, invested more sales and market development effort in this sector than most other rayon producers.

In addition to the fibre production plants, the acquisition of the Tencel brandname has been a key objective for Lenzing.  Coming second into the textile market they found it hard to sell even discounted “Lenzing Lyocell” against the highly successful Tencel branding programme which kept many of the routes to retail garments loyal to Acordis.

Tencel now a nonwoven fibre

Recently however, the Acordis Tencel business has been transformed by nonwoven success and the Tencel branding programme may not be as important as it once was.   According to Nick Hrinko, the North American Sales Director, less than 10% of sales went to nonwovens in 2000.  This year however he confidently expects the figure to be nearer  60%,  due in part to a decline in textile offtake rather than a planned switch from textile to nonwoven markets. 

(click here for part 3)

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