Lenzing returns with double fiber output in difficult environment

13 Mar '06

3 min read

Upper Austria based Lenzing Group expansion continued in 2005, despite a difficult fiber business environment. Sales by the Lenzing Group increased by 8.2 percent to EUR 942.6 million (compared to EUR 871.1 mill. in 2004) according to preliminary figures.

EBIT at EUR 81.8 million was below the 2004 record figure of EUR 104.3 mill. Share of net income of shareholders came to EUR 56.9 million compared to 67.7 million last year.

Fiber business expansion in 2005 was generated by organic growth (60 percent) and by consolidation effects (40 percent) resulting from the acquisition of the Tencel Group in 2004. Lenzing increased production in its cellulose fiber core business by 9.5 percent to about 454,000 tons.

This means that Lenzing fiber production in 2005 grew twice as fast as the global viscose staple fiber market at only 4 percent. Dynamic growth of the Lenzing Group continues to be strong, as indicated by the production increase of 54 percent since 1999.

In 2005 the core business fibers was characterized by good demand but falling fiber prices and rising production costs. It was the European textile market that was affected most. Sales there collapsed with the opening of the market as a consequence of the WTO agreement. The rise in raw material and energy prices in 2005 burdened the business with additional EUR 35 million.

“In front of this background, our successful countersteering strategy produced a satisfactory result for Lenzing in 2005. We again succeeded in improving our textile market position in 2005 by developing new fields of application and markets for our fibers, by product innovation, and by our intensive global marketing efforts” says Thomas Fahnemann, Chairman of the Management Board.

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