Thursday, November 13, 2014

Lenzing report record sales now the new Tencel plant is on line (2014)

Lenzing reported very high production volumes in the first three quarters of 2014, operating all its fiber production facilities at full capacity. A new record sales volume of 706,900 tons was achieved (Q1-3 2013: approx. 660,000 tons). This is all the more remarkable given the fact that all industrial plants in the greater Nanjing area of China, including Lenzing, were forced to reduce production due to the Nanjing 2014 Youth Olympic Games.

The new sales record is mainly attributable to the successful ramp-up of the new TENCEL® fiber production facility at the Lenzing site in Upper Austria towards the middle of 2014. Sales of the Segment Fibers in the first three quarters of 2014 totaled EUR 1,285.4 mn, comprising a drop of 3.1% from EUR 1,326.5 mn generated in the first three quarters of 2013. Segment EBITDA in the first nine months of 2014 amounted to EUR 155.1 mn, 15.8% lower than EUR 184.1 mn in the previous year, whereas segment EBIT of EUR 64.6 mn comprised a 35.5% decline from the prior-year figure of EUR 100.1 mn. 

Specialty fibers accounted for about 39% of total sales revenue in the Segment Fibers.  Lenzing continued to generate very attractive price premiums for the specialty fiber Lenzing Modal® in contrast to viscose fibers, against the backdrop of ongoing high demand. The price premiums achieved for TENCEL® fibers remain at a very attractive level, although prices for new samples and market development projects declined somewhat in individual cases. 

The focus of Lenzing’s marketing activities in the third quarter was on further developing the market for TENCEL® fibers. The market penetration efforts to promote the use of Lenzing fibers in denim have met with success, as demonstrated by the fact that the most prominent jeans manufacturers are integrating TENCEL® fibers in their fashion collections. Demand for TENCEL® bed linen remained strong, especially on overseas markets. In the home textiles segment, Lenzing promoted the use of TENCEL® fibers in towels, opening up new application possibilities with large American retail chain stores. 

A new study in the nonwovens segment confirms that TENCEL® BIOSOFT fibers
significantly enhance wearing comfort when used as a top sheet for incontinence pads.

This extract from the Lenzing quarterly report confirms the successful start of the 67,000 tonne/year Tencel plant in Austria. (A producer-blend of Tencel and cotton is apparently taking the bulk of the new Tencel production and allowing cheaper cottons to be upgraded.  Such a blend was part of the strategy for moving the sudden surplus of Tencel when the Courtaulds Mobile plant started in 1992.  It's also nice to hear the fashion for Tencel in denim - the original launch market - is returning.)

Source: Lenzing Interim Report - 01/09/2014

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