Description

The company's sales reached Euro1 bn (US$1.3 bn) for the first time during the year ending December 31, 2006, mainly as a result of an exceptional performance in its fibres business. Lenzing attributes its success to its proprietary cellulosic fibre technology and its focus on the production of high value and low volume speciality fibres for niche markets. In 2005 Lenzing's total fibre output was 453,806 tons. In 2007 its production capacity increased further following the start-up of a new 60,000 tons per annum viscose fibre line in Nanjing, China. In early 2007 the company operated two viscose fibre plants: one in Lenzing, Austria, and another in Indonesia. It also has three Tencel lyocell fibre plants: in Heiligenkreuz, Austria; in Grimsby, UK; and in Alabama, USA. The company's viscose unit in Lenzing boasts a number of unique advantages. Its entire wood pulp requirements come from an integrated pulp facility, while its heat and power needs are sourced from a nearby power plant which is owned and operated by Lenzing. This integrated approach enables the company to source low cost, high quality wood pulp and generate sales from by-products of wood processing. It also gives Lenzing complete control over its energy supply. As a result, just 18% of the Lenzing site's fuel comes from fossil fuels. It is generally expected that demand for cotton will exceed supply in the near future, and executives at Lenzing believe that cellulosic fibres can fill part of the shortfall in supply. Cellulosic fibres offer a number of practical advantages over cotton, such as moisture management for sensitive skin, a variety of surface effects, improved durability and flame retardancy. In terms of the manufacturing process, cellulosics result in a higher average yield per hectare, significantly lower water usage, renewable resources (wood), reduced pesticides, fertilisers and insecticides, and zero reliance on genetically modified (GM) crops.

Table of Contents

SUMMARY INTRODUCTION Textiles Nonwovens Pulp Lenzing Technik: Engineering Plastics Paper Energy COMPANY DEVELOPMENT PRODUCTS Tencel Moisture management A variety of surface characteristics Improved durability Lenzing Modal Lenzing Viscose Lenzing FR Nonwovens Nonwovens for wipe applications PRODUCTION Manufacturing facilities and annual capacity Output FIBRE MANUFACTURING PROCESS Viscose fibre Fibre quality The process Lyocell fibres ADVANTAGES OF CELLULOSIC FIBRES OVER OTHER FIBRES Cellulosics versus cotton Demand for cotton is exceeding supply Cellulosics can replace cotton and offer benefits Average yield Pest control Water consumption Lenzing cellulosic fibres utilise environmentally friendly production processes Cellulosic fibres versus synthetic fibres FINANCIAL PERFORMANCE OUTLOOK Expansion into carbon fibre production Cellulosic fibre capacity expansion in China Uncertainties in the near-term future Potential acquisition target? List of tables Table 1: Lenzing: production plants and capacity, April 2007 Table 2: Lenzing: financial summary, 2003-06