Lenzing adjusts strategy to address ‘challenging environment’
29/09/2025
In announcing its new roadmap, the man-made cellulosic fibre producer said that its earnings and profitability had nonetheless continued to increase in the first half of 2025. This is a positive development, though the global context remains “volatile and uncertain,” it said. With increased competition from China, the company intends to “strengthen the agility, resilience and cost position of Lenzing with the aim of long-term value creation in order to reinforce the company’s position as global market leader in sustainable cellulosic fibres,” stated chairman of the board and CEO Rohit Aggarwal.
The group will shift its commercial and production focus to its portfolio of higher margin branded fibres, such as Tencel, Veocel and EcoVero. It has announced plans to withdraw from commodity products and is considering the sale of its production site in Indonesia. This operation is expected to incur impairment losses of up to €100 million in 2025.
While Lenzing cites denim, home textiles and menswear as strategic markets, it announced that production capacities will be selectively shifted from textile to nonwoven applications to capture growing demand for renewable nonwoven fibres in hygiene, packaging, filtration, medical and industrial applications.
A cost reduction plan at the group’s headquarters will affect some 300 employees, including 250 before the of 2025. This decision is expected to lead to annual savings of €25 million from 2026 onwards. The decision to strengthen its international presence will lead to a further 300 employees made redundant at the historical Lenzing site in Austria by the end of 2027. A social plan has already been agreed upon with the group’s works council representatives.
To optimise efficiency and reduce energy costs, the group’s production sites in Austria, located in Lenzing and Heiligenkreuz, will benefit from a €100 million upgrade. The Heiligenkreuz facility is expected to become the “most environmentally friendly production facility of specialty fibres” with funding dedicated to innovation in new technologies.
On a brighter note, the group estimates that global demand for regenerated cellulosic fibres (another name for MMCFs) will grow 5 to 6% yearly over the next five years. The above market growth rate will benefit its Tencel lyocell and Modal fibres, which are “relatively small but attractive segments,” the group said.
Photo courtesy of Lenzing
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