From the Sector

• Significant improvement in the third quarter after COVID-19-related slump on the fiber market
• Measures for structural earnings improvement with positive impact
• Strategic investment projects remain on track
• Hygiene Austria joint venture: Successful growth and continued focus on certified protective masks
• Lenzing wins the Austrian State Prize for Innovation with LENZING™ Web Technology

Lenzing – In the first three quarters of 2020, the Lenzing Group successfully responded to the extremely difficult market environment of increased pressure on prices and volume due to the COVID-19 crisis by implementing a broad package of measures and remains fully on track in terms of its strategy. The cooperation with partners along the value chains was intensified and Lenzing was agile and flexible in adjusting production volume to demand. In addition, Lenzing also intensified measures for structural earnings improvement to mitigate the effect of the pressure on fiber prices and demand for fibers, and reduced its operating costs significantly as a result.

Please read the attached document for more information

As the first composites trade show worldwide since the Covid-19-crisis, the China Composites in Shanghai (September 2 to 4, 2020) took up its activity. The show counted about 600 exhibitors and over 20 000 visitors, mostly Chinese locals, attended the exhibition.

Chinese Reach Group under the lead of its president Daniel He represented a large portfolio of European companies and their recent developments through their cooperation with Dr. Michael Effing´s AMAC/Germany, among them Airborne (NL), Textechno (D) and Conbility (D).

Daniel He describes the situation: „The Chinese market is picking up again; a price increase of 7% for glass fibers was announced right before the China Composites Show, on August 25th 2020, which was even leading to a temporary material shortage. Today, the most booming industries in China are wind energy, building and infrastructure and innovation for electric cars. Unlike the rest of the world, where the aircraft industry undergoes a deep decline, in China it takes up by 50 %, which is very promising. Furthermore, we expect half a year for a full recovery of the industry, while the China growth of 2020 is still expected to be between 2 and 4 %.“

Michael Effing replied: “Enabling the composites business between China and Europe is the aim of our cooperation with Reach and with our customers, which are active in digital automatization, testing equipment or cost optimization software. We are very happy to have been present in China through our representant Reach and are looking forward to bridge and overcome the Covid-19-crisis with our upcoming event in Germany, the Composites for Europe in Stuttgart in November and hope to be back to full global business speed at the JEC in Paris in 2021.“

• Fiber prices and demand under pressure
• Measures to protect employees, customers and suppliers and to keep plants operational implemented successfully
• Joint venture Hygiene Austria established for industrial production of protective masks in the fight against the COVID-19 pandemic – new distribution channel via shop.hygiene-austria.at
• Strategic investment projects progress according to plan – financing agreements for construction of pulp plant in Brazil concluded as planned
• Revenue and operating result in the remaining quarters of 2020 expected to exceed that of the second quarter

Lenzing – In the first half of 2020, the Lenzing Group faced a historically difficult market environment with increased pressure on prices and volumes resulting from the COVID-19 crisis. To counteract that, Lenzing intensified its cooperation with partners along the value chains and adjusted its production volumes and sales prices to market reality. The disciplined implementation of the sCore TEN corporate strategy and the focus on specialty fibers continued to have a positive impact.*

*Please read the attached document for more information

Protective masks for Europe
With FleeceforEurope and Lindenpartner, Düsseldorf-based Kloepfel Group purchasing consultancy and Berlin-based industrial consultancy Bechinger & Heymann Holding plan to manufacture and distribute up to 50 million protection class FFP1 through FFP3 respiratory masks a month exclusively for the European market from the beginning of fall. And the primary focus will be on quality.
With protective masks – including those used in operating rooms – this quality is provided above all by  virus-absorbing nonwovens. And these will be manufactured by ‘FleeceforEurope’ using an Oerlikon Nonwoven meltblown system.
But masks effectively protecting against infections can only be guaranteed with the right quality. A crucial factor in this is the inside of the mask. Because the nonwoven used in protection class FFP1 through FFP3 respiratory masks plays a decisive role.
Here, the meltblown technology from Oerlikon Nonwoven will be deployed. In a special, patented process, the fibers laid into a nonwoven fabric during manufacture are subsequently electrostatically-charged, before the material is further processed downstream.

European market for protective masks with a promising future
Those responsible at Oerlikon Nonwoven and FleeceforEurope, which will primarily focus on producing high-end nonwovens, and Lindenpartner, which will manufacture and distribute the protective masks, are certain of one thing: the market for protective masks has a very promising long-term future in Europe.
What has been commonplace in Asia for many years now will also become normal in Europe. People will be increasingly wearing face masks when venturing out, in order to better protect themselves against health risks such as the current pandemic and also against increasing environmental pollution in the form of  fine particles and exhaust fumes in the future. A

Medical face masks from a vending machine
Mask producer Lindenpartner has already secured supplies of nonwovens and will be producing face masks for the European healthcare sector over the coming weeks. To fight the coronavirus pandemic, Lindenpartner is planning to install 100 self-service face mask vending machines in Germany over the next four weeks, positioning them in publicly-accessible places such as shopping centers and airports, for example.

Staggered in terms of timing and with varying magnitude, the global spread of coronavirus is impacting the development of the regional economies in the core markets of the Manmade Fibers segment of the Swiss Oerlikon Group.
The sales markets for manmade fiber systems and equipment have been primarily located in China, India and Turkey for many years now. Together, these markets – above all China – make up the lion’s share of the project landscape at Oerlikon Manmade Fibers. And this is paying positive dividends at the moment. Because the production facilities of the major manmade fiber manufacturers in
China have been systematically fired up again over the past few weeks, with capacity utilization increasing consistently.

Going against the flow
The Segment CEO, Georg Stausberg explains the reason: “Long before the coronavirus situation developed, the major manmade fiber manufacturers in China had decided to reverse-integrate their production chains to include petrochemicals in order to expand their portfolios with targeted investments, to reduce their dependence on a ,single product’, to optimize their costs and ultimately to acquire greater control over margins in a global volume business”.
Similar processes and decisions – albeit not on the same scale as in China – have also
been detected at the large manmade fiber manufacturers in India and Turkey. Even though businesses in India and Turkey are presently still temporarily severely impacted by the coronavirus situation, their long-term commitment cannot however be questioned, as the company-internally-agreed plans will be systematically implemented moving forward.

Long-term investments of global market players
All this has recently resulted in increased demand for spinning and texturing systems – just like those supplied by total solutions provider Oerlikon Manmade Fibers with its
Oerlikon Barmag, Oerlikon Neumag and Oerlikon Nonwoven product brands.
“The investments in petrochemical systems are based on long-term strategic considerations and are resulting – even during the coronavirus pandemic – neither in short- and medium-term economic dips, nor in changed customer behavior. (...)”, states Segment-CEO Georg Stausberg.
As a result of Oerlikon Manmade Fibers delving into the digital age years ago, the segment has experienced the intensive and short-term benefit from all the measures, in part also in its processing of customer projects.