Lenzing Acquires Tencel
Lenzing AG Acquires Tencel Group of Companies
With 4th May as the effective date, Lenzing AG is taking over the entire Tencel group of companies. The seller is Corsadi BV, part of the international financial group CVC. The purchase agreements were signed on 4th May. The price of the transaction was not disclosed. The acquisition will further strengthen Lenzing''s position as one of the leading manufacturers of high-quality, cellulose-based fibers in the world.
Karl Schmutzer, Chairman of the Supervisory Board of Lenzing AG and Managing Director of B & C Holding, the majority owner, regarded the step as an "absolutely sensible commercial decision with far-reaching strategic significance for the Lenzing Group." As a long-term investor, B & C Holding, the core stakeholder of Lenzing AG, is providing the Managing Board with the security for planning that it needs for such an investment, so that the Lenzing Group will be able to continue its successful growth course.
Tencel operates one large-scale Lyocell plant in the USA (Mobile, Alabama) and another in the UK (Grimsby), with a total nominal capacity of about 80,000 tons per year. Including its UK support activities and marketing teams throughout the world, it has a staff of about 350. Sales for 2003 were EUR 100 mill. The capacity of the Lyocell production site of Lenzing AG at Heiligenkreuz, Austria, is about 40,000 tons. The Lenzing Group has a staff of more than 4,000 worldwide, including 180 at Heiligenkreuz. During the last decade Tencel and Lenzing each independently developed the Lyocell fiber technology and brought it to large-scale industrial production.
Sustainable Profitability of Lyocell - Product Developments Accelerated
"The acquisition marks a milestone for the Lenzing Group," said Thomas Fahnemann, Chairman of the Managing Board of Lenzing. "We are tripling our Lyocell capacity and thereby reaching the critical size that is necessary for a sustainable and profitable Lyocell operation. With Tencel, the brand name, we are taking over a most successful brand, together with its international marketing team." By owning three Lyocell production sites, Lenzing will be able to use the available capacities with much more flexibility in the future, as well as to respond in an optimum fashion to market and customer needs.
Last but not least, combining the technology and application know-how of the two groups will considerably enhance their impact, said Fahnemann. The Lenzing Group will be able to keep up its further development of the Lyocell technology and to further accelerate the development of new products. "We expect major stimuli for our development work from the broad mutual exchange of experience and technology that has now become possible," said Fahnemann.
The planned integration of Tencel is greatly facilitated by a new corporate organization with market-oriented business units which was implemented at the beginning of the year.
Lyocell - the Cellulose Fiber for the 21st Century
Lyocell is the generic term for fibers made of pulp (raw material - wood). The fibers are produced by means of a direct solvent process. With this particularly ecological technology (closed-loop cycle), cellulose, the natural raw material, is dissolved. The resulting spinning mass is then spun into fibers.
Products made of Lyocell are characterized by their particularly high wearing comfort, their optimum moisture management, their very high wet and dry tenacity, as well as their flowing drape. Recently, Lyocell fibers have experienced major success in markets of the garment industry throughout the world, and also in the home textile and the nonwovens segments (hygiene and cosmetics products, medical products). Lenzing markets its Lyocell fibers under the brand name "Lyocell by Lenzing", Tencel is the brand name for Lyocell fibers by the Tencel group.
In the 80''s of the last century, Lenzing AG, the viscose fiber manufacturer, and the former British company Courtaulds plc had each obtained a license from Akzo, a Dutch company, to further develop the Lyocell technology. In the 90''s, both companies successfully launched their production of Lyocell fibers. After patent-law conflicts, Lenzing and Courtaulds signed a settlement in 1998, leading to a restricted exchange of know-how. The Lyocell fibers operations set up within the former Courtaulds Group, later Acordis, now Corsadi, subsequently underwent several changes of ownership, while developing as an autonomous business under the name of Tencel.
Lyocell by Lenzing and Tencel in Figures
Tencel Lenzing Lyocell start-up of large-scaleindustrial production 1992 1997 production capacity in tons 80,000 40,000 main areas of application ladies'' and men''s garments (denim), nonwovens ladies'' and men''s garments, home textiles, lingerie, nonwovens, filling fibers production sites Mobile, Alabama (USA)
Heiligenkreuz, Burgenland (Austria)Lenzing (pilot plant),
Staff 350 (including marketing) 180 (excluding marketing) marketing offices New York, US
Hong Kong, China
Hong Kong, China
The Lenzing Group is one of the world''s leaders in man-made cellulose fibers. At Lenzing, Upper Austria, its central site, about 200,000 tons per year of Viscose and Modal fibers are produced. Lenzing is fully integrated, which means that it also produces the pulp (some 210,000 tons per year), which is needed to produce fibers, at the Lenzing site. Furthermore, Lenzing produces special plastic products, special paper varieties, and also operates in the field of engineering and systems construction. P. T. South Pacific Viscose, its associated company in Indonesia, has a viscose fiber capacity of about 140,000 tons per year (about 1,500 staff).
Lenzing AG has been quoted on the Vienna Stock Exchange since 1985 and is currently held by B & C Holding (an Austrian investment company), its majority owner.
For inquiries please contact:
Corporate Communications Lenzing AG: Angelika Guldt
Phone no.: +43 (0)7672 701-2713
Corporate Communications Tencel: Mike Proctor
Phone no.: +44 (0)1332 681 351