Lenzing to continue its cellulose fibers expansion program
14 Mar '08
5 min read
Thomas Fahnemann outlines the situation: “Lenzing Fibers for textile and nonwovens applications are increasingly becoming high-tech products.
We do, however, not neglect our important volume business with high-quality viscose fibers.” Scheduled investment of about EUR 160 mill for the expansion of production capacity in Segment Fibers alone, is evidence of that.
Segment Plastics in 2007 was defined as another growth platform, next to business field fibers. A corresponding acquisition policy set Plastics onto a new level of international industrial activity.
According to preliminary segment reporting, sales improved to EUR 133.1 mill.(2006: EUR 93.5 mill). Segment EBIT increased to EUR 9.0 mill.(EUR 8.9 mill) and staff grew to almost 1000 (2006: 350).
The production focus is on thermoplastics, PTFE fibers and yarns, short cut filaments and precursor for carbon fibers. Lenzing Plastics operates a total of six production sites in Europe and the USA.
According to preliminary figures, Segment Engineering increased overall sales to EUR 119.0 mill. (2006: 103.6 mill.), enabled by a positive business environment and high order volumes from the Lenzing Group itself. Sales to external customers came to EUR 68.7 mill.(2006: 59.0 mill.).
Segment EBIT declined to EUR 6.2 mill (2006: EUR 10.1 mill.) as a result of cautious valuation of risks from pending business transactions and the retreat from marking systems. The average number of staff was 550. Lenzing parted with Segment Paper at the beginning of 2008.
Domestic demand in the emerging markets is considered to continue its development in 2008, despite a slower US economy, due to the general rise in prosperity over recent years. The economy in Europe is expected to weaken briefly without, however, slowing down to a standstill.
The development of core business fibers will slow down after fiber boom year 2007 and a good first quarter 2008. Lenzing's good market position, however, will secure production at full capacity.
Largely stable demand is expected from the core markets of the second main business field, Plastics. Demand from the construction industry, however, may decline. Plastics in 2008 will again provide impulse for the growth of the Lenzing Group.
The full consolidation of the companies acquired in 2007 over the business year will more than compensate for the deconsolidation of Segment Paper. Results could come under pressure from a further weakening of the US dollar or from rising raw material prices.
The Lenzing Group will continue its ambitious expansion program for cellulose fibers throughout 2008 and beyond with the most comprehensive investment program in company history.
Possible short-term fluctuations are not going to affect the continuous rise in the demand for high-quality cellulose fibers in the long-term.
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