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Cellulose could be substituted by polyester, warns Lenzing

12/11/2015
Cellulose could be substituted by polyester, warns Lenzing
Tencel and Modal-maker Lenzing has reported a “substantial” increase in earnings for the first nine months of the year to €160 million but has warned that cellulose could be substituted by polyester due to raw material costs.

The 32% rise in earnings was due to a cost-cutting exercise which has seen it sell businesses such as Segment Lenzing Technik.

Revenues for the three quarters totalled €1.5 billion, a 7.4% increase over the same period last year.

Lenzing CEO Stefan Doboczky said: “This very good performance was a result of positive exchange rate effects, increasing fibre prices and the improved cost structure of the Lenzing Group. We continue to progress in our profit-improvement measures and currently benefit from the somewhat more positive business environment.”

However, the Austrian group warned that fibre processing companies face increasing difficulties passing on the higher material costs in the cellulosic fibre value chain.

“To some extent, this could lead to the substitution of cellulosic fibres, especially by polyester in low-end applications over the medium term,” it said, but added in China some of the first previously closed viscose fibre production capacities are starting operation again.

It expects currency effects, higher fibre selling prices and strong demand for Lenzing products will enable a significant earnings improvement for the year 2015 compared with the previous year.

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