Lenzing to ramp up Tencel production
21/08/2014
Both its Modal and Tencel products saw “high demand and good sales volumes”.
However, the considerably lower average fibre prices – which had fallen 12% year on year, driven by an oversupply from China – meant overall, sales declined by 9.1% to €900 million compared with the first half last year.
More than half of the decrease can be attributed to the one-off effects relating to the divestment of its plastics unit towards in the second quarter of 2013.
“In light of the current level of fibre prices, the originally planned savings of about €60 million in 2014 are not sufficient for Lenzing to be able to profitably manufacture fibres, especially at its European sites,” said the company.
CEO Peter Untersperger said: “The previously implemented measures have already proven to be effective. Once again we were able to increase the savings generated in the year 2014. In light of the continuing market weakness we have to further sharpen the targeted annual cost savings of up to €160 million. We also want to reach these targets more quickly.”
Cost savings of up to €90 million are now expected for the current financial year, one third higher than originally budgeted.
Lenzing will now more intensively focus on specialty fibres and the nonwovens business and aims to increase production at the new Tencel plant to achieve a volume of 30,000 tonnes this year.
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