Lenzing rides out tough climate
Austria-based fibre group Lenzing said the “difficult” market environment for man-made cellulose fibres led to a 6% decline in sales in the first quarter, but this was “expected”.
Sales reached EUR 496.5 million, but the company said the decline in selling price was compensated by higher volumes.
Peter Untersperger, Lenzing’s CEO, said: “We counteracted the more difficult market conditions in a timely manner by implementing the cost optimisation project excelLENZ, and already achieved the first cost improvements. We are strengthening our specialty strategy by putting the focus on our specialty fibres Modal and Tencel. A further priority is the optimization of our cash management in the Lenzing Group by postponing maintenance investments which are not absolutely necessary.”
In the first quarter of 2013, total fibre sales volumes amounted to about 216,000 tons, about the same level as the fourth quarter of 2012 but 13% higher than the prior-year quarter. This increase can be attributed to the new production capacities in Indonesia and the US. A fire at the Tencel fibre production site in Heiligenkreuz in March resulted in a loss of about 5,000 tons.
Investments in property, plant and equipment and intangible assets totalled EUR 56.5 million in the first quarter, above the prior-year level of EUR 52.9 million. The money was spent on the construction of a Tencel factory at the Lenzing site and the conversion of the Biocel Paskov pulp plant from a paper to a swing capacity paper and dissolving pulp plant.
The company says it does not expect much change in the market, with high cotton inventories and China's cotton policy shaping the climate.
