Wednesday, May 28, 2014

More savings needed to ensure viability long-term (2014)

Due to the very unsatisfactory development of prices on the global market for viscose fibers, the Lenzing Group will be implementing additional cost reduction measures. Today, the Management Board informed employees at the facilities in Lenzing about the necessity of further measures to secure the long-term competitiveness of the Lenzing Group. In relation to this, the Management Board today announced a wide-ranging review of the Group strategy, the results of which should be available by the end of 2014.
As noted in the report on Q1 2014, extensive measures were already successfully implemented within the framework of the cost optimization program “excelLENZ 2.0”. Thanks to this program, it was possible to prevent layoffs in Lenzing, despite the staff reduction measures already carried out. Nevertheless, in light of the current level of fiber prices, the savings of more than EUR 60 - 80 mn for 2014 are still not enough to ensure the long-term profitability of cellulose fibers production at the European facilities. The targeted cost reductions of up to EUR 160 mn by 2016 must also be increased due to the market development.
CEO Peter Untersperger: “In light of the structural changes in competitive conditions, our goal is to lead the Lenzing Group back to its previous competitiveness. Further cost optimization is an inevitable part, but – within the framework of strategic restructuring – we will also decide to which products we can manufacture over the long run at which sites with the highest levels of quality and at optimized costs. There can be no taboos. Everything must be looked at.”
Furthermore, a strategy group was established by the Management Board. This group will look at the development of new specialty fibers for Lenzing AG, the production and market positioning which will help to secure the unique selling proposition and profitability, also of the Austrian sites.
Both the works council and political decision-makers will be informed about the difficult market situation and their support has been requested in this process.

Saturday, May 24, 2014

Courtaulds Lyocell at Index in Geneva (1996)

The date is 16th Feb 1996 and this photo of the Courtaulds Lyocell market development team and the Viscose (Nonwovens) marketing team was taken on the Courtaulds Fibres stand at the EDANA Index show in Geneva.

From Left to Right:  Pam Johnson, Marilyn Middleton, Fred Towers, Manny Coulon, Angela Lindsay, Fritz Herbig, ??, Calvin Woodings, Matthew North, Chris Potter, ??, Alan Bartholomew,  David Hoyland.
(Please add a comment if you can fill in the ??)

Friday, May 23, 2014

Lyocell in Lenzing Annual Reports (2002)

Another lyocell extract from an old Lenzing annual report...

Fiscal 2002 was the most successful year to date for Lenzing Lyocell. Lenzing Lyocell fibers succeeded in recording a clear upturn on the market. An expansion of capacities is the consequence of this positive development.

Lenzing Lyocell GmbH & Co KG developed to our great satisfaction during the year under review. The product and marketing campaign, which was launched recently, made it possible to achieve a significant increase in sales in spite of a slack cyclical environment. Production facilities worked to full capacity. In the course of the year, technical adaptations helped to expand capacities by about 20% and to reach a new record level. On account of all of these measures, the result was substantially improved during the year under review.

As regards products, new priorities were set, both in the textile segment and the nonwovens area, and the customer base was broadened. New attractive areas of application for Lenzing Lyocell are, for example, terry cloth products and other products in the field of home textiles. Lenzing Lyocell filling fibers for bedding enjoy a high level of acceptance.

Decision taken on large-scale investment
On account of the good demand, the decision was taken during the year under review to further expand capacities by building a second production line. The costs required by the investment will amount to about EUR 35 mill. The additional production capacities will be available in early 2004.

At the beginning of 2003, the energy and material supply center of the Business Park Heiligenkreuz was purchased by Lenzing AG, in order to secure energy supplies at favorable costs on a long-term basis. As a result, it will now be possible to benefit from the advantages of integration in the energy field as well, by optimally adjusting energy generation to fiber production. It is expected that there will be a further increase in sales in fiscal 2003. Activities will focus on finishing the second production line in time. Intensive marketing activities will go hand in hand with the increase in capacities.

...Another priority was the improvement in the Lyocell process technology, with the aim of optimizing and securing Lyocell quality, in order to increase productivity and to reduce the specific investment costs. This is also of major importance in connection with the imminent capacity expansion at the Heiligenkreuz plant. The development of Lyocell fibers for hometextile applications was continued with consistency, since this segment recently managed to achieve considerable acceptance by the market.

In July 2002 the fifth anniversary of the Lyocell plant at Heiligenkreuz was celebrated. This was followed in October 2002 by a seminar for journalists dedicated to Lyocell.

Click here to download the full report

Monday, May 19, 2014

Lyocell in Lenzing Annual Reports (2001)

Another lyocell extract from an old Lenzing annual report.  Once again Naomi Campbell's image decorated a few pages.

A lower demand from textile customers and the reluctance to purchase on the part of US businesses acted as a brake on the development of Lenzing Lyocell. It is positive to note that the delivered quantities were slightly above last year's level, although the overall conditions continue to be difficult. 82% of the fibers produced at Heiligenkreuz / Burgenland, Austria, were exported. The main markets in Europe are Italy, Spain and Portugal. Furthermore, deliveries go to China, Japan, South Korea, as well as Brazil and the USA. The result of the company continues to be negative, in spite of intensive measures to counter this trend. The fashion industry uses Lyocell for casual and jeanswear, as well as for products worn close to the skin, such as T-shirts and lingerie/underwear. Home textiles is a segment that is expanding continuously. The newly launched low fibrillation fiber Lyocell LF and the filling fibers are promising developments. Fibers for technical applications offer further good prospects.

 LYOCELL R&D: This year again, efforts to optimize the Lyocell technology were at the center of attention. New fibers were developed and existing ones were improved. The company stepped up activities to further develop a low-fibrillation Lyocell LF fiber, to improve the suitability of Lyocell for the nonwovens sector, as well as the use of the specific property profile of this new fiber generation for home textiles and technical applications.  

The following paragraph referred to CVC's attempt to merge Courtaulds and Lenzing's fibre interests. During the period when regulatory approval for this deal was being sought in the USA, Courtaulds largest and most efficient viscose plant in Mobile Alabama was closed on the basis that the single remaining US viscose plant operated by Lenzing in Lowland Tennessee should be preserved.  (It would be interesting to learn more about the thinking behind this. At the time, Lowland appeared the less viable plant!)

On 17 October 2001 the European Commission, for reasons of competition law, prohibited CVC Partners to acquire the majority of the Lenzing shares. This does not create any problems for the Lenzing Group, as we are able to continue on our course successfully on account of our size and global leadership position. The new majority shareholder, the B & C Group, considers itself to be the Austrian core shareholder with long-term entrepreneurial interests.

Click here to download the full report

Wednesday, May 14, 2014

EC/FTC argue against merger of Tencel and Lenzing Lyocell (2001)

This extract from an EC press release dated 17/10/2001 just surfaced.  It summarises the other series of posts on this issue in the 2001 folder.

Promises to licence the process, and  to toll-manufacture for a licencee were inadequate commitments (made by CVC) to allow the merger.  (Memo to self:  what changed to allow the deal when Lenzing proposed it?)

The market for lyocell technology was worldwide.

As regards lyocell production, the Commission took the view that it was not necessary to define the geographical market since Lenzing and Acordis are the only producers worldwide...
...and the only two players in the market for lyocell production and processing technology currently able to offer "ready-to-operate" technology. 

Together, the parties hold the vast majority of all existing patents for lyocell production and treatment, and market entry in this market is difficult. The Commission therefore concluded that the concentration would create a dominant position in the both lyocell production and technology markets.
During the second phase of the review the parties submitted the following commitments: (i) a non-exclusive licence with regard to lyocell; (ii) a toll-manufacturing arrangement whereby the parties would produce lyocell for the licensee; (iii) a non-exclusive licence with regard to Galaxy tampon fibre. The Commission took the view that these commitments were not adequate to eliminate the concerns raised by the concentration.
The FTC, which is the competent US antitrust authority in this case, and the Commission have remained in close and mutually beneficial contact all along the procedure by sharing information, and by discussing and developing consistent analysis of the main substantive issues. This case therefore constitutes an example of co-operation and mutual understanding between US and EU competition authorities.

Source: EU Press release

Monday, May 12, 2014

Lyocell in Lenzing Annual Reports (2000)

The 2000 Lenzing annual report was dominated by the images of Naomi Campbell who had starred in their new advertising campaign and who may have been partly responsible for improved sales.  The paragraphs most relevant to lyocell follow:

Lyocell business activities were very good. In fiscal  2000 sales almost tripled, as compared to the year  before. The results are still negative, but have  clearly improved over 1999.  This growth is due to an optimized type mix, on  the one hand, and to an intensive worldwide  marketing strategy, on the other.  

The production facilities at Heiligenkreuz, where  the production capacity was expanded in June to amount to 20,000 tonnes, worked to capacity and  are being stepped up continuously. In parallel,  minor de-bottlenecking investments improved the  performance of the plant.The production  capacity was increased to 20,000 tonnes  per year in June 2000. After almost two years of  reviewing, the EU Commission confirmed that the  entire package of grants for the Lyocell plant at  Heiligenkreuz, Austria, is in full compliance with  the EU cartel-law provisions.

For the new fiber advertising line, we succeeded in  signing up Naomi Campbell, the world-famous  super model. She is to promote with and familiarize  the end user with Viscose, Modal and Lyocell - our  fibers made of timber, the natural raw material.  In addition to fibers - our core business - Lenzing  Plastics, Lenzing Technik and the paper division  also made major contributions to sales and results.  In the year 2000, our employees had - for the first  time - the opportunity to share in the success of  the company through a new success-oriented  payment scheme. Thus also our employees  benefitted from the good results.   

"ProViscose" - a blend of Lyocell and Viscose -  showed a positive development. This fiber blend  did not only boost sales of Lyocell, but also helped  Lenzing set a new quality standard for the viscose  segment by clearly improved product characteristics.  On account of the combination, the specific features  of both fiber types can implement their full  potential. As a result, product and care features,  such as dimensional stability, have been clearly  improved. After initial successes with bed linen  and terrycloth items, the home-textile applications  will be expanded. In addition, there are plans for  Lyocell to be used for nonwovens applications, a  market segment with great potential. 

The Lyocell LF fiber, launched in the fall of 2000,  opens up new product applications. The demand  for nonwovens fibers and ProViscose is moving in  the right direction.     

Click here to download the full report

Monday, May 5, 2014

Lyocell in Lenzing Annual Reports (1999)

These are the relevant paragraphs from the Lenzing Annual Report of 1999. Pre-blending lyocell with viscose emerges as a way to tackle some of the processing issues and presumably to introduce some lyocell to textiles at a lower price. The idea seems to have been revived this year as Eurocel(tm) for the nonwovens market.

Dr Haio Harms, Head of Research and Development at Lenzing since 1983...

"It is part of our strategy for success to invest a certain amount of our
resources into medium and long-term targets. Lenzing's research made a
decisive contribution to the company's competitiveness, while competitors
who lacked that farsightedness had to give in to crowding-out competition.
The broad product range, the value-added by spinoff products of the pulp
production, the solutions to pollution-control issues and the ongoing
improvements in efficiency would be impossible without constant efforts.
This also applies to innovations that pay off in the longer run."

Again this year, the top priority regarding Lyocell developments was on optimizing the Lyocell technology. In this connection, we were able to achieve major progress in broadening the primary-material base, in making more efficient use of our plants and in making the quality level more even. On account of efforts to expand the range of types and to make processing and finishing methods easier, we were able to expand our market base. The spectre now ranges from a Lyocell micro fiber to coarse-titer wool types and matted fibers. Special scope was given to further developing the technology used to produce Lyocell fibers with a reduced fibrillation tendency.

Dr Franz Raninger, Member of the Board of Management with Lenzing since 1994...

“Lyocell offers good growth opportunities. However, the traditional technology, based on viscose, still contains further potential for innovation. The numerous product developments at Lenzing in recent years are a clear proof of this point.”

In 1999, Lenzing took another important step in the direction of focussing on high-quality special fibers by developing new fiber blends, consisting of Modal/Lyocell and Viscose/Lyocell that can be used for textile applications.

Saturday, May 3, 2014

Lyocell in Lenzing Annual Reports (1998)

1998 saw the last appearance Courtaulds annual report and is currently the first available year for Lenzing Annual Reports on their website.  Here are the paragraphs relevant to what was then called Lenzing Lyocell, the production of which was started at the Heiligenkreuz site during that year. Industrial scale Tencel production was started by Courtaulds 6 years earlier in Mobile Alabama. (This report is notably devoid of photographs.  Two years later, the 2000 report had photos of Naomi Campbell throughout.)

...Although numerous  intensive marketing efforts  and technical improvements  were made, the sold quantities  of the new fiber fell considerably short of the budgeted  figures. 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 is great potential  for the future, although  Lyocell will continue to generate  a sometimes considerable  burden on the business  result in the years to come.

...The research expenditure of Lenzing AG amounted to ATS 157.4 million (after ATS 200.1 million). The amount represents 2.6 per cent of the Lenzing sales, which is a remarkable figure also by international comparison. As before, 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...

Thursday, May 1, 2014

Tencel Dinner at Mancetter Manor (1993)

There had been a project review meeting in Courtaulds Research in Coventry during the day and this dinner was arranged, I think by Robin Thomas, at nearby Mancetter Manor.  From left to right, Calvin Woodings, Glenys Thomas, Robin Thomas, ??, Glyn Raven (US) , Clive Knee (US), ??, Pat White, Alan Jones, ??, Bob Feil (US), Omori-san.  

(If anyone can replace the ?? with names or knows who took the photo please comment.)