From the Sector

UK advanced materials and technology firm Hypetex, a manufacturer of coloured carbon fibre, has appointed Michael Dowse as a Non-Executive Director and Board Member.

Dowse brings experiences across sport and retail, following leadership roles at some of the biggest sports organisations and companies in the world. He was a Global Director for Nike before becoming President and General Manager Outdoor Americas for Amer Sports, managing brands such as Salomon, Arc’Teryx and Suunto.

As President of Wilson Sporting Goods (2013-2019), Dowse led 1,500+ colleagues in delivering the company’s global strategy, corporate operations, and manufacturing across more than 160 countries. He then took up the position of Chief Executive Officer and Executive Director of the United States Tennis Association (2020-2022).

Dowse will join a group of advisors at Hypetex, which includes Board Chairman Neil MacDougall and former Diageo Chief Financial Officer Nick Rose. They will support CEO Marc Cohen and Chief Technology Officer Nigel Dunlea as they continue to expand the company’s presence in sport and other sectors worldwide.

Indorama Ventures Public Company Limited (IVL) reported a record FY22 financial performance from the company’s global manufacturing footprint serving end-consumers’ resilient need for daily necessities. The unusually high level of customer destocking that weighed on the fourth quarter result is expected to have leveled out and business should return to normal operating conditions, with China’s reopening to further spur demand.

Full-year Core EBITDA climbed 31% YoY to $2.3 billion as revenue rose 28% to a record $18.8 billion. The company recorded strong cash flows of $2.2 billion, up 111% YoY. Indorama Ventures’ geographically diversified, integrated platform, backed by management’s agility, withstood unprecedented global events to generate earnings through the business cycle. During the year, the company continued to focus on its growth plan, successfully integrating its strategic surfactants business in Latin America and Vietnamese packaging acquisition. A dedicated senior team is working tirelessly and is committed to the company’s ‘Vision 2030’ sustainability goals including recycling technologies and introducing biomass feedstock to the company’s product portfolio. The ongoing ‘Project Olympus’ cost transformation program delivered an annual run rate of $449 million in efficiencies.

The annual result was impacted by an unusually challenging final quarter as fears of a recession and reduced transit times led to widespread destocking by customers. 4Q22 Core EBITDA declined 43% YoY to $264 million on a 1% drop in revenue to $3.9 billion. The pandemic lockdown in China also continued into the final quarter, reducing factory demand across Indorama Ventures’ portfolio and resulting in narrower margins from lower prices and higher costs. Higher energy and utility costs impacted European operations as the war in Ukraine continued into the winter.

To improve competitiveness and build resilience, Indorama Ventures rationalized underperforming assets in the Fibers business in Europe and a PTA site in Asia, resulting in a $7 million cash impairment in 4Q22 and a $253 million non-cash impact. As a result, the company looks forward to a $38 million uplift in EBITDA in 2023, reaching up to $65 million by 2025.

• Revenue rose to EUR 2.57 bn, while EBITDA declined to EUR 241.9 mn
• Implementation of EUR 70 mn cost reduction program proceeding according to plan
• Largest investment program in the company’s history including the lyocell plant in Thailand and the pulp mill in Brazil implemented on time and within budget
• Outlook: Lenzing expects EBITDA in 2023 to be in a range of EUR 320 mn to EUR 420 mn

The Lenzing Group was increasingly affected by extreme developments on the global energy and raw material markets in the 2022 financial year, in tandem with most of manufacturing industry in Europe. The market environment also deteriorated significantly in the third and fourth quarters, while worsening consumer sentiment placed an additional burden on Lenzing’s business growth.

In the year under review, revenue increased by 16.9 percent year-on-year to reach EUR 2.57 bn, primarily as a result of higher fiber prices. The quantity of fiber sold decreased, while the quantity of pulp sold rose. In addition to lower demand, the earnings trend particularly reflects the increase in energy and raw material costs. Earnings before interest, tax, depreciation and amortization (EBITDA) decreased by 33.3 percent year-on-year to EUR 241.9 mn in 2022. The net result for the year was minus EUR 37.2 mn (compared with EUR 127.7 mn in the 2021 financial year), while earnings per share stood at minus EUR 2.75 (compared with EUR 4.16 in the 2021 financial year).

Outlook
The war in Ukraine and the tighter monetary policy pursued by many central banks to combat inflation will continue to exert pressure on the global economy. The easing of China’s zero-Covid policy could lead to an unexpectedly rapid recovery. However, the IMF has warned that risks remain high overall and projects growth of 2.9 percent in 2023. Exchange rate volatility looks set to continue in regions that are important to Lenzing.

These challenging market conditions are also continuing to weigh on consumer confidence and sentiment in the sectors relevant to Lenzing. The outlook has improved slightly of late, with inventory levels returning to normal across the value chain. Nonetheless, subdued demand remains a source of concern for market players.

Inventories in the bellwether cotton market have diminished recently, although they remain above pre-pandemic levels. A decline in crops is foreseeable in the current 2022/2023 harvest season. The sharp rise in prices on the energy and raw material markets will continue to pose significant challenges for the market.

Overall, earnings visibility remains restricted.

In structural terms, Lenzing expects a continued rise in demand for environmentally friendly fibers in the textile and clothing industry, as well as in the hygiene and medical sectors. Thus, with its “Better Growth” strategy, Lenzing is very well positioned and will continue to drive growth in specialty products, while pursuing its sustainability targets including the transformation from a linear to a circular economy model.

In light of these factors and assuming a further market recovery in the current financial year, the Lenzing Group expects EBITDA in 2023 to be in a range of EUR 320 mn to EUR 420 mn.

Carbios announces its membership of the Ellen MacArthur Foundation’s Network. Carbios shares the Foundation’s commitment to accelerate the transition to a circular economy, especially in the areas of plastics and fashion. By joining the Ellen MacArthur Foundation’s Network, Carbios will connect with other leaders within the Foundation’s leading circular economy network of businesses, policymakers, academia, innovators, and thought leaders worldwide.

Carbios fully adheres to Ellen MacArthur Foundation’s vision for a circular economy for plastic. Its biorecycling and biodegradation technologies already match the actions defined by the Foundation:

• Eliminate all problematic and unnecessary plastic items
• Innovate to ensure that the plastics we do need are reusable, recyclable, or compostable
• Circulate all the plastic items we use to keep them in the economy and out of the environment

Through ambitious collaborative projects, plastics and fashion are two topic areas for the Foundation and are also at the heart of Carbios’ activities. Providing actionable solutions to support brands’ ambitious commitments for sustainable packaging and textile industries, Carbios has founded two consortiums: one in the packaging industry established with L’Oréal in 2019, which has since been joined by Nestlé Waters, PepsiCo and Suntory Beverage & Food Europe; another created in 2022 in the textile industry with apparel and fashion brands On, Patagonia, PUMA, PVH Corp. and Salomon. Together, the consortium members develop solutions promoting the recyclability and circularity of their products.

Joining the Ellen MacArthur Foundation’s Network takes Carbios’ circular economy actions one step further. Carbios recently underscored its commitment to circularity and environmental responsibilities by publishing its first Sustainability Report at the end of 2022^[1]. In 2019, Carbios’ biorecycling and biodegradable solutions were among the first innovations to be labelled “Efficient Solution” by the Solar Impulse Foundation^[2].

^[1] Cf. press release dated 15 December 2022
^[2] The Solar Impulse Foundation has identified over a thousand clean and profitable solutions that are economically viable and can be implemented on a large scale.

Hologenix announces that CELLIANT® with REPREVE®, a performance fiber made from recycled materials and enhanced with IR technology, has been shortlisted for the Drapers Sustainable Fashion 2023 Awards. Introduced with global textile solutions provider UNIFI® makers of REPREVE®, CELLIANT with REPREVE is honored in the Sustainable Textile Innovation Category of the awards.

The Drapers Awards recognize the strides that are being made in reducing the industry’s environmental impact and creating fairer working conditions across the supply chain. According to Drapers the quality and quantity of entries were higher than ever this year. Judging was underpinned by the UN-backed Sustainable Development Goals. Winners will be announced at a ceremony on May 25, 2023 at The Brewery in London.

This recognition is the second award for CELLIANT with REPREVE since its launch in the fall of 2022 – it was previously named a Selection in the Fibers & Insulation Category of ISPO Textrends Fall/Winter 2024/25. This is also the second year in a row that a Hologenix innovation has been shortlisted for the Drapers Sustainable Fashion Awards.

CELLIANT is a natural blend of IR-generating bioceramic minerals, which, when embedded into textiles, allows them to convert body heat into infrared energy, returning it to the body and temporarily increasing local circulation and cellular oxygenation. This aids significantly in muscle recovery, increases endurance and improves overall performance in healthy individuals, among other benefits.

REPREVE recycled performance fiber consists of high-quality fibers made from 100% recycled materials, including post-consumer plastic bottles and pre-consumer waste. It is also certified and traceable with UNIFI’s U TRUST® verification and FiberPrint™ technology, which provide assurance that the product comes from recycled materials. Compared to virgin fiber, REPREVE helps to offset the use of petroleum, conserving water and energy and emitting fewer greenhouse gasses.