Thursday, February 7, 2013

Seismic changes in man-made cellulosics: Part 1 - Lenzing takes Tencel (2004)

Here is Part 1 of the full text of an article from International Textiles Bulletin at the time of the Lenzing take over of Tencel. Points to note:

  • Both CVC and Lenzing had expected the 2001 take-over of Lenzing to be allowed.
  • Maybe to make the deal more palatable to the authorities, CVC closed their 2 best viscose operations (Mobile - Alabama and Grimbsy).
  • The closures came at time when it was apparent that the viscose revival which had commenced in 1999 was real, and driven in part by demand for viscose in the new hydroentangled nonwoven wet-wipes.
  • The Mobile viscose plant was a leading supplier of fibre for nonwovens and, strangely, was closed in order to keep what we thought was the less efficient and more polluting Lenzing Lowland plant open.  (More info needed here)

The long-rumoured acquisition of  Tencel from Acordis by Lenzing has at last been confirmed in a move that finally brings together the operations of the companies whose patents were pooled following an acrimonious battle over the rights to lyocell technology in the closing years of the last century.  Ever since Acordis’s major shareholder, CVC Partners tried – and failed - to capitalize on their acquisition of the old fibre businesses of Courtaulds and Akzo Nobel by adding Lenzing to the family, the industry has been waiting for this sort of rationalisation.

In October 2001 the European Commission prohibited the acquisition of Austria’s Lenzing by the UK’s CVC Partners Group Ltd, but only after plant closures apparently made in the anticipation of such a deal going through.  In April 2001, Acordis decided to close its Mobile viscose plant, one of the largest and lowest cost viscose fibre operations in the Western World, leaving the ageing Lenzing Lowland plant as the only source of viscose staple on the North American continent.   Acordis had earlier announced the  closure of Grimsby, the last viscose staple plant in the UK, and another remarkably efficient converter of wood cellulose into fibres.  Both Mobile and Grimsby specialised in low cost fibre for the world nonwoven market, leaving the Acordis Kelheim viscose plant, traditionally a textile fibre plant, as the only remaining Acordis source for the nonwovens industry.  

With the market for viscose in textiles declining in both Europe and America, some rationalization was inevitable, but to those observers expecting the nonwoven demand for viscose to rise on a wipe-fuelled boom, taking out the two key nonwoven plants seemed odd.  Lenzing’s Austrian plant had also specialised in textiles, and for many years Lenzing had been  a poor second to Courtaulds, and then Acordis in nonwoven market supply.  But the Acordis viscose closures left a vacuum into which Lenzing was sucked, along with Tencel and lyocell, and Birla.  Birla, India’s and the world’s biggest viscose producer realised that if they could change some of their enormous textile viscose capacity to supply European and American nonwoven requirements, they too had a rare opportunity to break into new and growing markets.

(Click here for Part 2..)

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