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Lenzing Investing $240M Into Sustainable Fiber Production

The Lenzing Group, a leading global supplier of wood-based specialty fibers, will invest more than 200 million euros ($240.6 million) in its production sites in Purwakarta, Indonesia, and Nanjing, China, to convert existing standard viscose capacity into environmentally responsible specialty fibers.

In China, Lenzing will establish the first wood-based fiber complex in China that is independent from coal as an energy source. By using natural gas-based cogeneration, Lenzing says it will reduce CO2 emissions at the site by more than 200,000 tons.

At the same time, a line of standard viscose will be converted to a 35,000-ton Tencel-branded modal fiber line, making Lenzing (Nanjing) Fibers Co. a 100 percent wood-based specialty fiber site by the end of 2022.

In Indonesia, Lenzing will reduce its CO2 emissions by increasingly using biogenic fuels. Additional investments to reduce emissions to air and water will make this facility fully compliant with the European Union Ecolabel by the end of 2022.

That will allow the company to convert standard viscose capacity into Lenzing Ecovero-branded fibers for textile applications, as well as Lenzing Viscose Eco fibers for personal care and hygiene applications. As a result, the site in Indonesia will also become a pure specialty viscose supplier as of 2023.

Lenzing said both investments are fully in line with its target to reduce its greenhouse gas emissions per ton of product by 50 percent by 2030. By avoiding or reducing the use of fossil fuels at the two sites, the Lenzing Group will be able to reduce CO2 emissions by more than 320,000 tons in total, or 18 percent, compared to 2017. In addition, this investment allows Lenzing also to reduce its total sulfur emissions by more than 50 percent compared to 2019.

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“With our ambitious climate targets toward a zero-carbon future, we are pioneers in the entire manufacturing industry and especially in the fiber sector,” Stefan Doboczky, CEO of the Lenzing Group, said. “Our investments in China and Indonesia underpin that investments in improving our eco-footprint are at the same time value enhancing for shareholders. These investments are a substantial step towards our strategic targets for 2024.”

Together with its major lyocell fiber project in Thailand, Lenzing will also boost its share in specialty fibers as a percentage of fiber revenues to well above the targeted 75 percent already by 2023, which in turn is an important step towards achieving the company’s earnings before interest, taxes, depreciation and amortization (EBITDA) target of 800 million euros ($962.41 million) by 2024.

“We are and will remain a reliable partner for both the textiles and the nonwovens value chain on the long term,” Stephan Sielaff, a member of the managing board of Lenzing, said. “The strategic focus on specialty fibers is fully in line with the growing market demand for sustainable viscose.”