Lenzing to invest more in expansion

Upper Austrian fibre producer Lenzing AG announced today (Mon) that it would invest an additional 78 million Euros in expansion of its facilities in Nanjing, China, and Lenzing, Upper Austria.It added that half of its fibre production capacity would be located in Asia after the expansion. It announced the investment of 120 million Euros in expansion last December.Investment of 55 million Euros in Nanjing over 18 months will enable Lenzing to more than double the plant’s capacity to produce viscose fibre to 140,000 tonnes annually, and investment of 23 million Euros over 15 months at Lenzing will result in a switch of some production from standard viscose to modal fibre.The expansion and the entry into operation of a fourth production line at Lenzing’s Indonesian subsidiary PT. South Pacific Viscose (SPV) in May 2010 will raise the firm’s production capacity in Asia to around 378,000 tonnes annually.The firm said its total production capacity would reach 770,000 tonnes annually by 2012, with a new facility in India in the planning stage.Lenzing board chairman Peter Untersperger said: “We are continuing our growth course with this investment. On the one hand, our Lenzing location will become the world’s biggest cellulose fibre producer by an even bigger margin. On the other hand, the doubling of capacity at our Nanjing plant will enable us to meet rapidly growing demand for cellulose fibre in Asia.”Untersperger said earlier this month that the firm’s strategy for preparing itself to take advantage of an upswing in the market had been successful. It had won new suppliers, brought new, innovative product applications to market and paved the way for future growth.Lenzing’s turnover declined from 1.33 billion Euros in 2008 to 1.25 billion Euros in 2009, but the firm had kept its dividend of 14 Euros a share unchanged.Earnings before interest and taxes (Ebit) declined by 23 per cent year on year to 100.7 million Euros and its earnings before interest, taxes, deprecation and amortisation (Ebitda) fell by 9.3 per cent year on year to 182 million in 2009.The firm had previously reported that Thomas Winkler would become Lenzing board member responsible for finance in April 2010, relieving Untersperger of that responsibility. Christian Board director Christian Reisinger will leave the board on 31 March 2010.