The Lenzing Group, a leading supplier of wood-based specialty fibers, has successfully completed a major $450 million lyocell expansion project in Thailand.
The new plant, which Lenzing said is the largest of its kind in the world with a capacity of 100,000 tons per year, started production on schedule and will help to better meet the increasing customer demand for Tencel branded lyocell fibers. For Lenzing, the project also represents an important step toward strengthening its position in the specialty fiber market and into a carbon-free future.
Robert van de Kerkhof, chief commercial officer at Lenzing, told Sourcing Journal the plant expansion is important because “it’s really about sustainability” and described Lenzing’s lyocell fiber as “one of the most sustainable fibers that currently exists.”
The construction of the plant located at Industrial Park 304 in Prachinburi, around 150 kilometers northeast of Bangkok, started in the second half of 2019 and proceeded largely according to plan, despite the challenges arising from the Covid-19 pandemic, van de Kerkhof said. He also stressed that the recruiting and onboarding of new employees has been successful, “bringing in the best talent.”
Overall, the capex investments amounted to approximately 400 million euros ($448.56 million).
“To deliver such a huge project in time and at budget is an outstanding achievement given the challenges of the global pandemic,” Cord Prinzhorn, CEO of Lenzing Group, said.
At Lenzing, wood purchases are certified according to recognized sustainability criteria, such as the Forest Stewardship Council (FSC) and Program for the Endorsement of Forest Certification (PEFC) standards.
Related Stories
Lenzing primarily makes use of timber generated by thinning, a practice applied in sustainable foresting. The timber that is unsuitable for high-grade products, such as furniture, finds a meaningful purpose in production of botanic fibers.
In 2019, Lenzing made a strategic commitment to reducing its greenhouse gas emissions per ton of product by 50 percent by 2030. The target is to be climate-neutral by 2050. Due to the established infrastructure, the site in Thailand can be supplied with sustainable biogenic energy and contribute significantly to climate protection.
Van de Kerkhof noted that the raw material wood pulp for the Thailand facility mainly comes from its joint venture plant for dissolving pulp in Brazil. The eucalyptus plantations in Brazil are located in Triângulo Mineiro in the State of Minas Gerais, 800 kilometers away from the Amazon.
Forestry activities in connection with the eucalyptus plantations, as engineered by Lenzing, help to preserve native forests and reduce deforestation, as they avoid the use of wood from native forests. Lenzing follows the Brazilian Forestry Code, which is one of the most stringent in the world and is certified by one of the leading international forest-protection certification schemes.
Van de Kerkhof said the demand for Lenzing’s wood-based, biodegradable specialty fibers under the Tencel, Lenzing Ecovero and Veocel brands is growing strongly.
“In Asia in particular, we see huge growth potential for our brands based on sustainable innovation,” he said. “With the production start of the lyocell plant in Thailand, Lenzing reached an important milestone in its growth journey, supporting our ambitious goal to make the textile and nonwoven industries more sustainable.”
The Thailand site will initially produce Tencel fiber mainly for the Chinese and ASEAN markets, and eventually add Veocel fiber for the nonwoven market, he noted.
Van de Kerkhof said Lenzing will continue to expand its production capacity for lyocell fibers in line with its sCore TEN strategy, which aims to generate 75 percent of its fiber revenue from eco-responsible specialty fibers such as Tencel.
The Thailand site offers space for several production lines and the investment in the first phase already includes general infrastructure that would benefit future expansion. However, Lenzing will continue to look for opportunities to expand lyocell production in other parts of the world, too.
“Investments in Thailand and other Lenzing sites around the world support us not only along our transformation toward becoming a supplier of eco-friendly specialty fibers, but also in implementing our ambitious climate targets, thus further increasing our company value,” Prinzhorn said.
Together with a key project in Brazil and the substantial investments at the existing sites in Asia, Lenzing is currently implementing the largest investment program in its corporate history, with more than an estimated 1.5 billion euros ($1.68 billion). Lenzing will continue to drive the execution of its strategic projects, which are to make a significant contribution to earnings from 2022.