Lyocell technology is the latest innovation in manmade cellulosics
Manmade cellulosics industry is expected to grow faster than the total fibre industry till 2020. This industry engulfs various technological innovations, and is expected to expand immensely in the years to come. Stefan Doboczky, CEO of Lenzing, a global leader in the production of manmade cellulose fibres, talks about the industry with its pros and cons in an interview with Fibre2Fashion.com
Please share details of your last two fiscals and your expectations from the coming two fiscals.
In 2014, we delivered stable revenues of around €1.9 billion, despite a difficult pricing environment in the wake of falling cotton prices. EBITDA rose by 24 per cent to €240 million. Due to writing off of goodwill, EBIT fell by 63 per cent to €22 million.
For 2015, we expect a significant earnings growth as already visible in the latest Q3 results. In the first three quarters of the year, we increased our revenues by more than 7 per cent in a year-on-year comparison. EBITDA and EBIT rose by 32 per cent to €210.6 million and 61 per cent to €112.0 million respectively. This performance was made possible by fibre price increases, steady improvements in the cost structure of Lenzing Group and positive exchange rate effects. According to our strategy update - Score Ten, we want to continually increase our EBITDA by 10 per cent annually between 2014 and 2020. We aim to increase the return on capital employed (ROCE) to more than 10 per cent by 2020.
What is the size of the global manmade cellulose fibres industry? What is the percentage pie claimed by Lenzing?
The world’s fibre demand is of 94 million tonnes per year. The manmade cellulosics industry covers an attractive 5 per cent of this niche. Manmade cellulosics industry is expected to grow by 5-6 per cent per annum until 2020, as compared to the 3-4 per cent growth of the total fibre market. We actually see installed production capacities of 5.5 million tonnes per annum. The Lenzing share is about 1 million tonnes or 18 per cent of this figure.
What are the latest technological innovations in this industry? How has it improved productivity, cost-efficiency, performance and sustainability?
That would definitely be the Lyocell technology. This technology was the first step change since the invention of the viscose technology 100 years ago, and the introduction of high-wet modulus fibres in the 1950s. Lyocell fibres offer outstanding functionalities like optimal moisture absorption or silky touch. They reduce the formation of bacteria, and have exceptional blending characteristics with other fibres. The Lyocell technology meets the fast-growing demand for sustainable fibres. Our customers ask for environment-friendly products since end-consumers have significantly increased their eco-awareness in the last years. In terms of environmental impact, the Lyocell technology that Lenzing uses to produce its Tencel fibres makes it the most 'green' manmade cellulosic high-performance fibres so far. Tencel is the perfect input to produce green textile and nonwoven products.
What is your strategy to capture the global manmade cellulose market?
Lenzing's new strategy Score Ten aims at safeguarding and expanding Lenzing's leadership role on the dynamic growth market for manmade cellulose fibres. To achieve this, we will focus more intensively on the most attractive segments in the specialty fibre business. By 2020, we intend to generate 50 per cent of the total revenue from businesses with high value fibres like Tencel, Lenzing Modal and viscose fibre specialties. Also, we will strengthen our core by increasing Lenzing's own pulp position through backward integration, and by optimising our commercial processes and organisational structure.
Any new product launches or mergers and acquisitions on the anvil?
We recently introduced a series of Tencel specialty fibres like the new flame retardant Tencel FR fibre and the Tencel A-100 micro fibre. As a central part of Score Ten, Lenzing will increase its customer intimacy by establishing regional competence centres for product innovations as well as selectively enhancing our R&D activities along the value chain to find new forward solutions. The direction is clear - we want to surprise the textile and nonwoven world with new, high value special purpose products, and you can be sure that we will follow this trail in the years to come.
How do you ensure sustainability in your sourcing supply chain? Can technology be used in that area as well?
We have a strict sourcing policy to safeguard our main raw materials. Wood and dissolving pulp come from sustainable sources. In addition to the ones rigorously adhering to the strict European Union (EU) forestry laws, Lenzing also prefers suppliers who participate in well-known forest certification programmes like PERC or FSC.
Which are your biggest markets and which ones are coming up in a big way?
We are following our customers. Therefore, almost 2/3 of our fibres are sold in Asia. The most important Asian market in terms of size is China. But we also have a solid customer base in Indonesia, South Korea, Taiwan, Japan and increasingly in Pakistan and Bangladesh. Also, there is a very innovative and powerful textile industry in Turkey - one of our most important textile markets outside Asia.
Published on: 18/01/2016
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.
