From the Sector

• Revenue up 9.4 percent to EUR 1,726.6 mn
• EBITDA improvement of 23.9 percent to EUR 397.1 mn
• Retail bond of EUR 120 mn redeemed – Lenzing with net liquidity as at end of September
• State-of-the-art application innovation center opened in Hong Kong

Lenzing – The Lenzing Group generated a substantial increase in revenue and earnings in the first nine months of the 2017 financial year compared to the prior-year period. The company is continuing the implementation of its Group strategy sCore TEN in order to further expand the offering of specialty fibers and be even closer to its customers and business partners.

Consolidated revenue climbed 9.4 percent year-on-year to EUR 1,726.6 mn. This increase is mainly attributable to higher prices for all three fiber generations. Consolidated earnings before tax, depreciation and amortization (EBITDA) rose 23.9 percent to EUR 397.1 mn, corresponding to an EBITDA margin of 23 percent, up from 20.3 percent in the prior-year period. Earnings before interest and tax (EBIT) increased by 34.6 percent to EUR 298.4 mn, resulting in a higher EBIT margin of 17.3 percent (Q1-3 2016: 14 percent). The profit for the period improved by 35.3 percent to EUR 219.3 mn, and earnings per share rose 36 percent to EUR 8.12 per share. In September Lenzing redeemed the retail bond of EUR 120 mn. At the end of the reporting period the Group had net liquidity of EUR 16.9 mn.

“In the first three quarters of 2017, we successfully captured value in a very positive market environment and we continue to implement the sCore TEN strategy with great discipline. The opening of our new application innovation center in Hong Kong is an important step to boost our regional innovation capabilities. We were particularly proud to launch TENCELTM Luxe as a sign of Lenzing’s ongoing commitment to innovation and sustainability”, states Stefan Doboczky, Chief Executive Officer of the Lenzing Group. “After three excellent quarters we are confident to deliver substantially better operating results in 2017 compared to 2016, but at the same time we do expect more headwinds in 2018.”

Focus on customer intimacy

In September 2017, the Lenzing Group opened a new application innovation center (AIC) in Hong Kong, thus setting a further milestone in strengthening its innovation offering to all partners along the value chain. New applications for Lenzing fibers will be developed and tested at the new facility, among them applications for recent innovations such as the TENCELTM Luxe branded lyocell filament, the RefibraTM branded lyocell fiber and the EcoVeroTM branded viscose fiber.

Furthermore, new sales and marketing offices were opened in Turkey and South Korea in the first half of 2017. The direct contact to customers and well-equipped showrooms featuring products made of LenzingTM fibers serve as the basis for providing even better customer support.

Investment program in progress

The Lenzing Group aims to increase the share of specialty fibers as a percentage of revenue to 50 percent by 2020. Following the capacity expansion initiatives in Heiligenkreuz (Austria) and Mobile, Alabama (USA) which are both underway, Lenzing announced its intention to construct the next plant to produce TENCEL® fibers in Thailand.

A new era of sustainable production

In October 2017, the Lenzing Group presented a new product, TENCELTM Luxe, at an exclusive event held in Paris. The TENCELTM Luxe branded filament yarn represents Lenzing’s entry in the filament market. This fiber will support the Lenzing Group’s path towards becoming a true specialty player in the market for botanic materials derived from the sustainable raw material wood.

The launch volumes of TENCELTM Luxe are being produced at the Lenzing site. The basic engineering for a commercial scale plant was commenced.

Outlook
Demand development on the global fiber market remains positive within the context of a generally friendly macroeconomic environment. Lenzing expects wood-based cellulose fibers to grow at an even higher rate than the overall fiber market. After three excellent quarters, the Lenzing Group will achieve an operating result in 2017 that is significantly better than 2016.

For 2018, Lenzing sees a number of somewhat opposing factors that limit visibility regarding fiber price developments. Overall market demand is expected to remain high. However, the Group expects a substantial increase on the supply side, especially for viscose but also for cotton. Price trends for selected key raw materials, especially caustic soda, are difficult to predict. Against this background the Lenzing Group expects a much more challenging market environment for standard viscose during the upcoming quarters.

The above-mentioned development reassures the Lenzing Group in its chosen corporate strategy sCore TEN. The Group initiated its transformation from a volume-oriented viscose player to a value-oriented specialty fiber player at the end of 2015, and will continue the disciplined implementation of its business strategy.

 

 

 

 

 

 

 

 

 

 

• Huntsman continues to inject its leading edge innovation in bangladesh to support textile industry with sustainable practices

Singapore - In a signing ceremony, Huntsman Textile Effects announced that it has extended the partnership and collaboration agreement with Viyellatex Group for another two years. The agreement will see the Viyellatex Group continuing to use Huntsman as its preferred and sole supplier for industry leading dyes, chemicals and dying auxiliaries. This partnership, now in its 17th year reinforces the recognition of Huntsman as a trusted and preferred supplier for the Viyellatex Group. Under this agreement, Huntsman will support Viyellatex’s Group of mills to streamline operations and optimize processes, train technical staff, and make recommendations to help improve yield and productivity. This strategic cooperation will enable Viyellatex Group to continue to achieve operational excellence.

“We are extremely pleased and proud of this continuing partnership with the Viyellatex Group. As a global leader in the transition to a more sustainable textiles sector, we are pleased to join hands with one of the country’s leading exporter of ready-made garments (RMG) and a supplier to leading international brands, commented Chuck Hirsch, Vice President, Sales and Technical Resources, Huntsman Textile Effects. “This cooperation agreement will also help Viyellatex Group to maintain its leading edge in the textile industry by leveraging on Huntsman’s R&D capabilities, innovation and focus on sustainability, while continuing to comply with the stringent requirements of its export customers around the world,” continued Mr Hirsh.

Speaking on the occasion Mr. David Hasanat, Chairman of Viyellatex Group said, “Viyellatex Group is the leading company in the area of sustainable apparel in Bangladesh. This continuing support and technical expertise from Huntsman will help us be more competitive in this increasingly challenging market. It will help us to comply with the stringent product demands from our global customers and better equip us to face challenges from the operational and environmental aspects.” He continues, “Viyellatex Group places strong emphasis on sustainability by minimizing energy usage, adopting waste and water recycling, and using only organic materials and environmentally compliant chemicals and dyes and Huntsman is the perfect partner in this regard as they share this vision.” “We are pleased to be conferred Preferred Supplier Status from Viyellatex Group, partnering with one of the leading apparel groups in Bangladesh” , said Mr. Dheeraj Talreja, Commercial Director - South Asia, Middle East & Africa of Huntsman Textile Effects. “This partnership is a great testament of our customers’ trust and confidence in Huntsman’s quality, proven expertise, products and service delivery,” he continued.

In conjunction with this signing ceremony and as an active supporter of Bangladesh’s textile industry, today Mr Hirsch also hosted a customer seminar for more than 500 customers and prospects in the country’s capital, to provide them with leading edge technologies to help them be more sustainable with competitive value-add to customers.

Huntsman Textile Effects holds regular seminars and workshops and also collaborates with textile mills and apparel manufacturers to adopt new technologies and processes that conserve resources, reduce waste and improve productivity.

Bangladesh’s textile industry is the nation’s largest export sector. The ready-made garment (RMG) sector is worth US$28.14* billion in 2016-2017, with more than 4,300 garment factories employing about 4 million people and accounting for 80.7% of the country’s total exports. To remain internationally competitive, local textile mills and RMG factories increasingly have to demonstrate that they operate in a socially and environmentally sustainable way.

Lenzing – The Lenzing Group aims to substantially increase its share of specialty fibers as a proportion of total revenue. Following the expansion drive already underway in Lenzing and Heiligenkreuz (both in Austria), Grimsby (Great Britain) and Mobile, Alabama (USA), the Supervisory Board of Lenzing AG approved the proposal of the Management Board yesterday to build the next state-of-the-art facility to produce lyocell fibers in Thailand. For this purpose, Lenzing is establishing a subsidiary in Thailand and purchasing a commercial property in Industrial Park 304 located in Prachinburi near Bangkok. In the coming months, the required permits and licenses as well as technical planning will be finalized. A definitive decision on constructing the new production plant will be made in the first quarter of 2018. Completion is scheduled for the end of 2020.
The selection of Industrial Park 304 in Prachinburi was based on its excellent overall infrastructure, outstanding expansion opportunities and the sustainable biogenic energy supply. Similar to the plant in Mobile, the planned production facility will be constructed on the basis of the latest state-of-the-art technology and feature a capacity of up to 100,000 tons annually. This site will strengthen the worldwide lyocell network of the Lenzing Group and enable its global customers to source TENCEL® branded fibers from Europe, North America and Asia.

Composites use in Building and Construction will be highlighted at JEC newest event dedicated to this specific Composites Industry next month in Chicago, IL, USA. The numerous and diverse benefits that these innovative materials bring to the Building Industry will help overcome the coming challenges such as, urbanization, increase of natural disasters (floods, storms, tsunamis, earthquakes…), along with the decrease of non-renewable raw materials and the high standard levels set by the society in terms of lightness and fluidity. Composites Materials bring answers and opportunities to tackle those issues in sustainable, durable and reliable manners. Solutions like ease of fabrication (Owens Corning), structures durability (Biteam), anti-seismic reinforcement (DowAksa), use of end-of-life products such as recycled bottles of water (Premier Composites Technologies), aerial forms (Optima Projects Ltd) or again energy saving (Armageddon Energy).

Following its strategy to address every Composites End-user, the JEC Innovation Awards will reward these 6 Composites Innovators in Building & Construction that will change the way we build.
If the majority of submissions relied on glass fibers, which is common in the Construction field, we see an increased interest in carbon fibers, especially for structural applications. And similarly to all sectors of the composite industry, thermoplastics are gaining in importance in Construction. Therefore, to promote the growing use of composites as a construction material, 6 categories are awarded, covering a large panel of applications and possibilities.