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Lenzing to Invest $1 Billion to Expand Lyocell Fiber Production

The Lenzing Group will invest more than 1 billion euros ($1.14 billion) to substantially increase production of lyocell fibers over the next few years.

The expansion aims to deliver on strong demand for lyocell and strengthen Austria-based cellulosic fiber manufacturer and marketer’s  position as a market leader in specialty fibers. The first expansion phase of the growth plan is construction of a state-of-the art lyocell fiber production plant in Prachinburi, Thailand.

The new facility, which involved an investment of roughly 400 million euros ($455.52 million),will have an annual capacity of 100,000 tons. Lenzing said the plant sets a new milestone in the history of lyocell fibers as the largest production site of its kind.

Site grading at Industrial Park 304, located 150 kilometers east of Bangkok, has been completed and the investment is fully supported by the Board of Investment of Thailand, Lenzing said. Construction will start this fall and production will begin toward the end of 2021.

“Tencel lyocell fibers are considered a benchmark in ecologically responsible fibers,” Lenzing Group CEO Stefan Doboczky, said. “This expansion underscores Lenzing’s commitment to improve the ecological footprint of the global textile industry. This investment in Thailand represents the next consistent step in the implementation of our sCore TEN strategy and will help to further transform Lenzing into a specialty fibers company.”

Thailand has favorable trade agreements with the major Asian economic blocks, and Lenzing said the selection of the site was based on its strong overall infrastructure and sustainable biogenic energy supply, which leads to low CO2 emissions to protect the climate.

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In the coming years, Lenzing will further expand at the site in Thailand, which has space for several plants. The investment in the first phase already includes the general infrastructure that will benefit future expansion. Lenzing said it will continue to consider expanding lyocell production in other parts of the world, too.

“The project has received very good attention in the engineering market,” Heiko Arnold, chief technology officer of the Lenzing Group, said. “Lenzing aims at implementing the project in a strategic partnership with an international engineering company also chosen for its capability to support Lenzing’s further organic growth worldwide. Integrated teams including an international and highly skilled Lenzing workforce will work together with the engineering contractor, which will be selected soon.”

Lenzing has production facilities in Austria, Czech Republic, China, Indonesia, the U.S. and U.K., with an annual capacity of 1.05 million tons of fiber in 2018.