From the Sector

• The world’s leading exhibition for additive manufacturing takes place in Frankfurt am Main every year
• With 26,919 visitors, Mesago, organiser of Formnext in Frankfurt, reported a new record with numbers up by 25% on the previous year.

This year Perlon was amongst the 632 exhibitors from 32 countries for the first time, which, represented by Pedex GmbH from Wald-Michelbach, was a co-exhibitor on a stand for companies from the German region Hesse (Hessen Trade and Invest GmbH - HTAI). Some visitors were surprised to discover that the world leading manufacturer of synthetic filaments is also active in the 3D printing filament field. That the Perlon Group, known innovation and market leader in many fields of application, with its decades of experience in the development and manufacture of filaments, has entered into the 3D printing market was well received.

The fact we actually entered the market 6 years ago, was only known to a few experts in the field. In this time, Pedex GmbH had been producing a wide range of performance filaments for a well-known German 3D printer manufacturer, who since then has distributed exclusively under its own brand. The decision, to out ourselves as producer and supplier was taken in summer 2018. This new direction has two main aims, firstly to establish ourselves in the market as a manufacturer of Perlon® 3D printing filaments, producing both small batches and high volume on an industrial scale for professional applications, but secondly and most specifically to continue along the path as a toll manufacturing partner with long-term contracts on an industrial scale.

As a partner with universities/institutions and member of various research networks, we are close to the quickly advancing developments in this field, which is why we were really pleased to welcome Dr. Andreas Baar and Dr (Ing) Thomas Neumeyer onto our stand. They are both members of RESOPT3D (Netzwerk für ressourcenoptimierten 3D-Druck), Germany’s strongest user network for 3D technologies.

Together with Conspir3D in Rheinheim and its owner Jan Giebels, who 10 years ago was a co-founder of the company German RepRap, we were able to forge a partnership to distribute Perlon® 3D printing filaments. With his support we could competently advise trade visitors about filaments and 3D printing as a collective proactive team.

Next year, Formnext will take place from 19th to 22nd November 2019 for the first time in exhibition halls 11 and 12 at the Exhibition Centre in Frankfurt am Main. This will be a debut exhibition for the USA which will be exhibiting as first partner country at Formnext. The USA has a long tradition in the field of additive manufacturing and is one of the most important international exhibiting nations.

Emphasis on Process, Third-Party Validation and Outcome-Based Testing

Canadian Linen and two U.S. AmeriPride Services Inc.’s locations have recently earned have earned the Hygienically Clean Food Safety certification, reflecting their commitment to best management practices (BMPs) in laundering as verified by on-site inspection and their capability to produce hygienically clean textiles as quantified by ongoing microbial testing. The company’s Canadian Linen and Uniform Service facilities in these locations have earned the Hygienically Clean Food Safety certification:  

• Alberta: Edmonton and Lethbridge
• British Columbia: Victoria and Vancouver/Burnaby
• Manitoba: Winnipeg
• Nova Scotia: Halifax
• Ontario: Etobicoke, London, North York and Ottawa
• Quebec: Quebec City
• Saskatchewan: Regina and Saskatoon

The recently-certified U.S. AmeriPride laundries are located in Vernon, Calif. and Durant, Miss.  
The certification confirms the laundry’s dedication to compliance and processing garments and linens using BMPs as described in its quality assurance documentation, the focal point for inspectors’ evaluation of critical control points (CCPs) that minimize risk. The independent, third-party inspection must confirm essential evidence that:

• Employees are properly trained and protected
• Managers understand legal requirements
• OSHA-compliant
• Physical plant operates effectively

In addition, these facilities each passed three rounds of outcome-based microbial testing, indicating that their processes are producing Hygienically Clean garments and other reusable textiles with diminished presence of harmful bacteria. To maintain their certification, laundry plants must pass quarterly testing to ensure that as laundry conditions change, such as water quality, textile fabric composition and wash chemistry, laundered product quality is consistently maintained.
This process eliminates subjectivity by focusing on outcomes and results that verify textiles cleaned in these facilities meet appropriate hygienically clean standards and BMPs for animal processing, dairies, fruit/vegetable, bakeries, grain and other food and beverage industry segments.
These Vernon, Calif. and Durant, Miss. locations of the AmeriPride chain join these laundries who have previously received the Hygienically Clean Food Safety certification:

• Tuscumbia, Ala.
• Bakersfield and Fresno, Calif.
• Twin Falls, Idaho
• St. Cloud and Minneapolis, Minn.
• Amarillo Texas

Hazard Analysis and Critical Control Points (HACCP) practices are examined in the Hygienically Clean Food Safety inspection process, evaluating the plant’s techniques for:

• Conducting hazard analysis
• Determining CCPs, monitoring their control, correcting them if not under control
• Validating and verifying HACCP system effectiveness
• Documenting and record-keeping to show ongoing conformance

On-site inspections also evaluate practices relevant to handling and processing textile products used in food manufacturing/processing establishments for adherence to U.S. Food and Drug Administration (FDA) and Centers for Disease Control and Prevention (CDC) directives. Introduced in 2014, Hygienically Clean Food Safety brought to North America the international cleanliness standards for laundering garments and other textile products for food manufacturing used worldwide by the Certification Association for Professional Textile Services and the European Committee for Standardization.
Twelve of the company’s U.S. locations have achieved the Hygienically Clean Healthcare certification:

• Little Rock, Ark.
• Phoenix and Watkinsville, Ga.
• Twin Falls, Idaho
• Topeka, Kan.
• Bemidji and Minneapolis, Minn.
• pringfield, Mo.
• Omaha, Neb.
• Roswell, N.M.
• Memphis, Tenn.
• Lubbock, Texas

The company’s Canadian Linen and Uniform Service facility in Lethbridge, Alberta, is also Hygienically Clean Healthcare-certified.
In January 2018, Philadelphia-based Aramark Corp. announced the completion of its acquisition of AmeriPride, making AmeriPride a wholly owned subsidiary. Aramark’s uniform rental and career apparel business is headquartered in Burbank, Calif.

"Datacenter in a box" is the new powerful, flexible and secure IT infrastructure solution for the textile industry of the future

Remscheid/Berlin – Oerlikon Manmade Fibers Segment Industrie 4.0 solutions for the production of polyester, nylon and polypropylene are based on the digitalization of the production landscape and the intelligent processing of the flood of data generated in this way. In the future, the segment will offer its customers a new powerful, flexible and, above all, secure IT infrastructure. The "Datacenter in a box" was presented for the first time at the OpenStack Summit in Berlin, Germany, to a broad specialist audience. The compact datacenter works on the basis of the open operating system OpenStack, which enables virtual computing in a secure private cloud environment.

Externally, the datacenter looks unspectacular: The box contains standard hardware such as server rack, network components, batteries for reliability, monitoring sensors and a few more things. But what counts are the inner values. The Open Source software OpenStack consists of many different services and allows the virtualization of a large pool of computing, storage and network resources in a flexible, scalable private cloud. This brings two central advantages: On the one hand, virtual operation reduces costs and simplifies configuration, adaptation and expansion of the IT infrastructure today and tomorrow. On the other hand, long-cherished wishes for high data protection are fulfilled, because a private cloud maintains secure, highly encrypted data connections away from the World Wide Web.

"The functional diversity of a cloud, operation and hardware in one's own four walls at the same time – our customers immediately understood these advantages" reports Mario Arcidiacono, specialist for Business Intelligence & Data Warehouse at the Oerlikon Manmade Fibers Segment. The IT architecture also guarantees infrastructure management without downtime, the system and virus protection are automatically kept up to date at all times. Another major advantage is the scalability of the hardware and software, which can be adapted to changing requirements.

OpenStack Summit: Project example with yarn manufacturer from Vietnam presented

With these trump cards and a project example, the Group segment confidently presented itself to a genuine specialist audience in mid-November. At this year's OpenStack Summit in Berlin, where thousands of cloud professionals met, Oerlikon Manmade Fibers Segment CEO Georg Stausberg presented the customer installation at Century Synthetic Fibre Corporation, which supplies many well-known sporting goods manufacturers. The Vietnamese producer of high-quality yarns not only uses the new datacenter, but also the connection to the new "Common Service Platform (CSP)" of the Oerlikon Manmade Fibers Segment as well as an innovative new dashboard solution in prototype status. In this case, the digital instrument panel supports employee communication during shift changes in the yarn factory and introduces agile methods into the work process. The board visualizes the progress of central key figures and operating parameters from the current production process. Based on this, the employees of the successive shifts can now exchange important process and quality information and possible instructions for action within a few minutes in a structured stand-up meeting. "For the customer this means an immediate improvement of the processes, and he can significantly increase the efficiency and quality of his employees' work," assures Joerg Gross, Senior Manager in the IT-architecture team at the Oerlikon Manmade Fibers Segment.

New IT-basis for the Plant Operation Center (POC) already successful established on the market

The fixed connection to the "Common Service Platform (CSP)" of the Oerlikon Manmade Fibers Segment plays a pioneering role in such solutions. This enables services and software updates to be provided smoothly, quickly and automatically. In this way, service applications can transform collected data into instructions or automated commands to secure and improve processes. For example, the secure availability of management solutions such as the Plant Operation Center (POC) for process monitoring can be increased and possible errors can be rectified very quickly. The new digital solution AIM4DTY (AIM = Artificial Intelligence Manufacturing), which was unveiled at the ITMA ASIA + CITME 2018 in Shanghai, China, a few weeks ago, can also be implemented in this way. AIM4DTY uses methods of machine learning, determines probable causes of errors in texturing and helps to improve quality during production.

Launch at ITMA Barcelona 2019

The Oerlikon Manmade Fibers Segment offers such remote-supported services on request. Data will therefore only be transferred to the “Common Service Platform (CSP)” with the customer's consent. In addition, all data is processed in accordance with the new European General Data Protection Regulation (GDPR) and all other international data protection standards. Against this backdrop, the Oerlikon Manmade Fibers Segment plans to provide its datacenter with graded or customer-specific solutions: from complete service to provision with customer training for its own operations. After initial practical experience with several pilot customers, the segment intends to launch its offering on the market next year and officially present it to the textile industry at ITMA 2019 in Barcelona, Spain.

Decline in revenue due to lower prices for standard viscose, less favorable currencies and lower production volume

• Pressure on prices for key raw materials remains high
• Positive impact due to focus on specialty fibers and further optimization of the product mix
• Expansion project in Mobile temporarily mothballed
• Acquisition of the remaining 30 percent of Lenzing (Nanjing) Fibers Co. Ltd.

The Lenzing Group recorded a solid business development in the first three quarters of 2018. The decline in revenue and earnings compared with the same period of the previous year was essentially based on a mix of lower prices for standard viscose, more unfavorable exchange rates and price increases for key raw materials. The Lenzing Group’s strategic orientation with a focus on specialty fibers had a positive impact in this environment.

Revenue decreased by 5.2 percent to EUR 1,636.2 mn over the comparative period of the previous year. Apart from the high starting base, this was primarily attributable to the expected challenging market environment for standard viscose, less favorable exchange rates and lower production volume. EBITDA (earnings before interest, tax, depreciation and amortization) recorded a decline by 26.8 percent to EUR 290.6 mn due to price increases for key raw materials and higher energy and dissolving wood pulp prices. The EBITDA margin dropped from 23 percent in the first three quarters of the previous year to 17.8 percent. EBIT (earnings before interest and tax) fell by 36.2 percent to EUR 190.3 mn, leading to a lower EBIT margin of 11.6 percent (01-09/2017: 17.3 percent). Net profit for the period dropped by 39 percent from EUR 219.3 mn in the previous year to EUR 133.8 mn. Earnings per share equaled EUR 5.06 (01-09/2017: EUR 8.12).

“The Lenzing Group is currently operating in a challenging environment. Against this background, we are satisfied with the solid business development and the corporate strategy sCore TEN has a positive impact. The new production line in Heiligenkreuz started up successfully and customers’ feedback has been positive,” says Stefan Doboczky, Chief Executive Officer of the Lenzing Group. “While many viscose producers are faced with a very tense profit situation, we are well positioned due to our specialty strategy and still expect a satisfactory full year”, Doboczky adds.

Key strategic measures were implemented during the first three quarters of 2018 in line with the sCore TEN strategy. The start-up of new capacities for lyocell fibers in Heiligenkreuz, the production start of LENZING™ ECOVERO™ fibers at the Nanjing site and the investment in another pilot line for TENCEL™ Luxe filaments are important steps to accomplish the goal of increasing the share of specialty fibers in total revenue.

Project in Mobile temporarily mothballed
Due to the decision to temporarily mothball the lyocell expansion project in Mobile, Alabama (USA), in view of the buoyant US labor market and trade tensions between the major trading blocks, the implementation of the expansion plan for specialty staple fibers will be slowed down. The Lenzing Group will put all its effort to readjust the execution of its growth plan to meet strong market demand for its lyocell fibers. This includes an increased focus on the lyocell expansion project in Prachinburi (Thailand).

Advancing forward solutions
Regarding the capacity expansion for specialty products such as TENCEL™ Luxe filaments and LENZING™ ECOVERO™ viscose fibers, Lenzing is still on track. After the introduction of TENCEL™ Luxe branded lyocell filament yarns in the previous year, Lenzing continues to drive innovations in the area of the value chain. In September, the company also announced the successful development of the LENZING™ Web Technology, a new technology platform focusing on sustainable nonwoven products, which will lead to new market opportunities for the industry. Following several years of research and development work and investments totaling EUR 26 mn, the pilot plant at the headquarters in Lenzing has been successfully put into operation.

Largest dissolving wood pulp line worldwide
At the end of June, the Lenzing Group and Duratex, the largest producer of industrialized wood panels of the southern hemisphere, announced that they had agreed on the terms and conditions to form a joint venture to investigate building the largest single line dissolving wood pulp plant in the state of Minas Gerais (Brazil). This decision supports the self-supply with dissolving wood pulp and the growth in specialty fibers. The joint venture is investigating the construction of a 450,000 t dissolving wood pulp plant, which is expected to become the largest and most competitive single line dissolving wood pulp plant in the world. The final investment decisionto build the dissolving wood pulp plant is subject to the outcome of the basic engineering studies and the approval by the respective supervisory boards.

Acquisition of Chinese operation
At the beginning of November the takeover by the Lenzing Group of the remaining 30 percent of its Chinese subsidiary Lenzing (Nanjing) Fibers Co. Ltd. (LNF) from its state-owned joint venture partner NCFC was completed. After closing of the transaction, the Lenzing Group will hold 100 percent of LNF. The acquisition will have a negative impact on net profit of approx. EUR 21 mn for the fiscal year 2018. The purchase of the shares supports Lenzing’s strategic growth as a producer of specialty fibers from the renewable raw material wood in China and worldwide. It paves the way to setting up further production lines for specialty fibers. Lenzing wants to convert LNF into a specialty fibers hub over time.

Expansion of capacities
CAPEX (investments in intangible assets and property, plant and equipment) rose by 35.5 percent year-on-year to EUR 174.1 mn in the first three quarters of 2018. This is primarily attributable to capacity expansions in Heiligenkreuz and the expansion of the existing dissolving wood pulp plant in Lenzing as well as the investments made so far in Mobile.

Outlook
Demand development on the global fiber market remains positive. Lenzing expects wood-based cellulosic fibers to continue to grow at a higher rate than the overall fiber market. In a challenging market environment the Lenzing Group expects solid results for 2018, albeit lower than in the outstanding last two years.

For 2019, Lenzing expects standard viscose markets to remain under pressure because of an ongoing oversupply and very high raw material prices. Lenzing’s specialty fiber business is expected to continue the very positive development.

The above-mentioned development reassures the Lenzing Group in its chosen corporate strategy sCore TEN. Lenzing is very well positioned in this market environment and will continue its consistent focus on growth with specialty fibers.

Chomarat has specialized in scrim reinforcements for construction materials for more than 50 years. Now, it has invested in a new pilot production line to develop its next generation of reinforcements. Unique in the market and designed entirely by CHOMARAT’s teams, this technological innovation was born by the Group’s body of technological know-how. Conceived for the development of next generation cement board and roof-waterproofing reinforcements, the machine is versatile for developing materials for new markets. The new line will become operational in early 2019 at CHOMARAT’s construction plant in Anderson, South Carolina, USA.

A technological innovation for higher performance
The new pilot line will enable CHOMARAT to accelerate its development projects focusing on cost, performance and sustainability. The Group’s goal is to launch a new generation of laid scrim reinforcements for construction materials, with incomparable performance. “We are working on all the parameters (technological, chemical formulations, textile fibers) to optimize the performance of CHOMARAT scrims, such as protecting glass against alkali in cement or increasing impact resistance and water repellency. We plan to stay in front of economic and environmental challenges facing the construction market,” explains Raphaël PLEYNET, Director of Composites & Construction Europe at CHOMARAT.

“This pilot scrim line is a key element in the Group’s global innovation and development strategy. The technological developments achieved on this equipment will enable us to lead through innovation, meet the challenges to come for construction materials, and enhance our value to the market” adds John LEATHAM, Director of Sales and Marketing at CHOMARAT North America.

Combining expertise from textile and chemical-formulation technologies
The scrims designed and developed by CHOMARAT are reputed for their advantages: dimensional stability, laminating quality with other materials (film or veils), excellent mechanical performance, and very good protection against the alkalinity of cement. “CHOMARAT’s knowhow in laid-scrim manufacturing is based on the combined expertise in textile and chemical-formulation technologies. With this new pilot technology, CHOMARAT will be able to build on these two advantages and propose even better-performing materials!” concludes Philippe SANIAL, Director of Research & Technologies at CHOMARAT.

ERIC PIERREJEAN, CEO OF JEC GROUP

Mr. Eric PIERREJEAN, who joined the company in January, has been appointed Chief Executive Officer, succeeding to Mrs. Frédérique MUTEL. He will be in charge of the further development of the company after two decades of growth under Mrs. MUTEL leadership, dedicated to the development and the promotion of the composite materials industry. Before joining JEC Group, Eric PIERREJEAN was Division General Manager at Comexposium from 2011 to 2017. Prior to this, he spent much of his career in sales and marketing positions, spending more than 15 years in the automotive sector (BMW Group, Land Rover) as well as in the sports goods industry (Nike).

ADELINE LARROQUE, EVENTS DIRECTOR FOR EMEA

Mrs. Adeline LARROQUE joins JEC Group as Show Director JEC World and EMEA Events with more than 15 years of Global work experience as she has worked in several countries such as USA, UK, China, India, Qatar and UAE where she has developed a strong skill set in exhibitions and events management. After a successful experience at Reed Exhibitions France and China managing numerous exhibitions in the Aerospace, Material, Security, Maritime, Logistics, Construction and Medical industries, she then worked for Qatar Tourism Authority as Head of Exhibitions driving growth for the Doha Jewellery Show, Qatar Motor Show and Women Fashion exhibitions. Lately, she worked for the Events division of the Daily Mail Group supervising the Abu Dhabi International Petroleum Exhibition and Conference as Event Director.

The DyStar Group has released its 2017 – 2018 Sustainability Performance Report. Into its eighth edition, the report marks the progress of the global company that aspires to become the world’s most sustainable and responsible supplier of colorants, specialty chemicals, and services in the textile industry, but has also embarked on the business with food dyes and chemicals through its recent acquisition in USA.
The latest DyStar’s Sustainability Performance Report is the first of their reports prepared in accordance with the most trusted and widely used reporting framework – Global Reporting Initiative (GRI) Standards: Core Option.

The 2020 Target
2017 marks the seventh year of DyStar’s journey towards reducing the production footprint by 20% for every ton of production by the year 2020. This goal encompasses the resources used for production including energy, water, and raw materials as well as addresses their corresponding outputs – greenhouse gas (GHG) emissions, waste and wastewater. Results across most key performance indicators were positive, with four of the six 2020 targets being successfully met or surpassed.
In terms of the energy consumption and GHG emission, DyStar is farther from its original desired target primarily due to the impacts from three newly acquired production sites. However, intensive efforts are underway to ensure that the company’s less efficient acquisitions are provided the essential support to align with the rest of the company. DyStar is optimistic that all six targets are achievable by 2020.

Creating Responsible Products & Services
As part of DyStar’s long-term goal to imbed sustainability across the industry, they will also be focusing on expanding its sustainability services. This includes the opening of more Texanlab offices, an ISO 17025 certified, specialized testing laboratory across South Asia to provide end-to-end solutions throughout the whole supply chain.

Stepping Up on Cooperation with NGOs
Increasingly, DyStar is strengthening their partnerships with the Non-Governmental Organizations (NGOs). The 2017 report features an in-depth guest interview with the NGO China Water Risk, on how can suppliers like DyStar can be a role model in creating sustainable fashion.
To encourage and facilitate sustainable practices among its suppliers, DyStar also conducts sustainability-related supplier surveys. For instance, DyStar is cooperating with the Institute of Public & Environmental Affairs (IPE), one of the most established Chinese NGO, to expand the framework of their supplier questionnaire. In recognition of its efforts, DyStar received top ranking in the CITI transparency list for industrial chemicals from IPE, placing them well ahead of many other industry peers.

Embracing Diversity, Engaging Communities
Also, to help meet clients’ demand and demonstrate its responsibility and care in the food and beverages industry, DyStar is implementing a supplier diversity program to support businesses in the USA that are at least 51% owned by minority groups, women, veterans and people with disabilities.
Highlighting DyStar’s commitment to the communities they operate in, the company encourages volunteerism among employees, and for the year of 2017, DyStar employees devoted a total of 205 volunteer hours towards community projects, which also served as a meaningful collective experience for employees to form closer bonds.

Working Together Towards Long-Term Solutions
As an industry frontrunner, DyStar and its leaders are committed to driving sustainability across the
industry. However, significant challenges remain, and the stakeholders of this industry need to work together to derive long-term solutions. CEO of DyStar Group, Mr. Eric Hopmann emphasized, “It is imperative for the entire industry to improve collectively, not individually, and our ability to do so may determine the long-term profitability of the industry as a whole. It is my belief that effective partnerships coupled with stronger support and incentivization from leading companies within this industry could be key to creating a new – and much needed – equilibrium.”

To access DyStar’s sustainability reports, visit http://www.dystar.com/sustainability-reports/.

• Trade tensions among major economies elevate project risk
• Buoyant US labor market increases threat of substantial project cost overrun
• Lenzing will reassess this decision on an ongoing basis
• Intensified focus on lyocell expansion project in Prachinburi (Thailand)

Lenzing’s Managing Board concluded today to temporarily mothball the lyocell expansion project in Mobile, Alabama (USA). The rising likelihood of increasing trade tariffs, paired with the potential surge in construction costs due to the buoyant US labor market, have increased the risk profile of this project. Consequently, Lenzing will put all its effort to readjust the execution of its growth plan to meet strong market demand of its lyocell fibers. This includes an increased focus on the lyocell expansion project in Prachinburi (Thailand). Lenzing will reassess this decision on a regular basis but no substantial additional lyocell volumes, over and above the successful 25.000 tons expansion in Heiligenkreuz (Austria), will be added to the market in 2019 and 2020 by Lenzing.

Lenzing continues to be fully committed to implement its sCore TEN strategy and remains on track for the specialty expansions such as TENCEL™ Luxe filaments and LENZING™ ECOVERO™ viscose fibers, however this decision will slow down the implementation of the lyocell specialty staple fiber growth.

• Decline in revenue due to volatile standard viscose prices and currencies
• Prices for key raw materials still high
• New production line in Heiligenkreuz in start-up phase
• Backward integration into dissolving wood pulp to be strengthened via joint venture in Brazil

Lenzing – The Lenzing Group generated solid results in a challenging market environment in the first half of 2018. The decline in revenue and earnings compared with the first half of the previous year, which was the best half-year in the company’s history, was based on a mix of volatile prices for standard viscose and price increases for key raw materials, coupled with currency effects. The Lenzing Group’s strategic orientation with a focus on specialty fibers had a positive impact in this environment and is increasingly bearing fruit. The corporate strategy sCore TEN is being implemented with great discipline in order to expand the company’s offering of specialty fibers and even more extensively support customers and business partners.

Revenue declined by 6.4 percent compared with the first half of the previous year to EUR 1,075.4 mn. This decrease is primarily attributable to less favorable currency exchange rates. EBITDA (earnings before interest, tax, depreciation and amortization) decreased by 28.1 percent to EUR 194.8 mn, especially due to price increases for key raw materials and higher energy prices. The EBITDA margin fell from 23.6 percent in the first half of 2017 to 18.1 percent in the first half of 2018. EBIT (earnings before interest and tax) declined by 37 percent to EUR 128.7 mn, leading to a lower EBIT margin of 12 percent (H1 2017: 17.8 percent). The net profit for the period dropped by 39.3 percent from EUR 150.3 mn in the previous year to EUR 91.3 mn. Earnings per share equaled EUR 3.44 (H1 2017: EUR 5.55).

“So far, the financial year 2018 proved to be as challenging as expected, and market headwinds were clearly noticeable. In this market environment, we are satisfied with the solid results we report. We are proud that with our corporate strategy sCore TEN and the focus on growth with specialty fibers we show big steps in the right direction. The recently announced joint venture with Duratex is another important step in executing this corporate strategy,” says Stefan Doboczky, Chief Executive Officer of the Lenzing Group. “We will continue to implement our strategy with great discipline and are convinced that this will steadily improve the long-term profitability of Lenzing,” Doboczky adds.

Largest dissolving wood pulp line worldwide

In June, the Lenzing Group and Duratex, the largest producer of industrialized wood panels of the southern hemisphere, announced that they had agreed on the terms and conditions to form a joint venture to investigate building the largest dissolving wood pulp plant (single line concept) in the state of Minas Gerais, (Brazil). This decision supports the self-supply with dissolving wood pulp and the growth in specialty fibers, defined in Lenzing’s sCore TEN strategy. The joint venture will investigate the construction of a 450,000 t dissolving wood pulp plant, which is expected to become the largest and most competitive single line dissolving wood pulp plant in the world. The final investment decision to build the dissolving wood pulp plant is subject to the outcome of the basic engineering studies and the approval by the respective supervisory boards.

Even stronger focus on sustainable products

As a pioneer in sustainable fiber solutions, the Lenzing Group is committed to higher standards in the textile and nonwoven sectors. More than EUR 100 mn will be invested in sustainable manufacturing technologies and production facilities by 2022 in order to realize this vision. In line with the Group’s specialty strategy, another two milestones were set in the first half of 2018: Lenzing announced an investment of up to EUR 30 mn in another pilot line for the production of TENCEL™ Luxe filaments at the Lenzing site. In addition, the company also introduced the environmentally friendly process for the production of LENZING™ ECOVERO™ branded viscose fibers at its Chinese site. Both decisions contribute to better meeting the strong demand for environmentally compatible products.

Expansion of capacities

CAPEX (investments in intangible assets and property, plant and equipment) rose by 60.8 percent year-on-year to EUR 117.2 mn in the first half of 2018. This is primarily attributable to the capacity expansions in Heiligenkreuz (Austria) and Mobile, Alabama (USA) and the expansion of the existing dissolving wood pulp plant in Lenzing. The company is pressing ahead with these projects as well as with planning work on the construction of the next state-of-the-art lyocell production facility in Prachinburi (Thailand).

New brand identity

With the new positioning of its master brand and its product brands, the Lenzing Group started a new phase of branding and brand communication in the first half of 2018. Lenzing decided to carry out a new brand strategy in order to sharpen its company and product profile as a sustainable innovation leader for customers and partners along the value chain as well as for consumers. The most important pillar of this new brand strategy is a brand architecture with a focus on fewer brands and a strong message to consumers. With the TENCEL™ brand as an umbrella brand for all specialty products in the textile segment and the VEOCEL™ brand as the umbrella brand for all specialty fibers in the nonwoven segment as well as the new master brand, which was presented in March, Lenzing showcases its strengths in a targeted manner.

Outlook

The International Monetary Fund expects a further acceleration in global economic growth to 3.9 percent for 2018. However, growing protectionist tendencies in the political arena represent a source of uncertainty. Export-oriented companies in the Eurozone are faced with additional challenges from the currency environment.

Developments on the fiber markets should remain positive, but with continuing volatility. The rising demand for cotton should support prices despite the increase in production. Polyester fiber prices have stabilized after the increase in previous years.

The wood-based cellulosic fiber segment, which is relevant for Lenzing, should see further strong demand. After years of moderate capacity expansion in the viscose sector, significant additional volumes will enter the market in 2018 and 2019. As a result, standard viscose prices will remain under pressure. The Lenzing Group is very well positioned in this market environment with its corporate strategy sCore TEN and will continue its consistent focus on growth with specialty fibers.

The Lenzing Group still sees challenging market conditions for the second half of 2018. In addition to the price pressure on standard viscose, the prices of some key raw materials such as caustic soda are still at a very high level and exchange rates continue to be volatile. Our specialty fibers are expected to continue their very positive development. In this context, the Lenzing Group is satisfied with the earnings development to date, but underlines its estimate that the results for the year 2018 will be lower than the outstanding results in the last two years.

The Perlon Group is making great strides on its journey towards the future and is therefore vigorously implementing the measures required to achieve its aim. This aim (known internally as ‘strategy 2020’) provides for the next level of globalisation and the sustainable growth of the market leader in the production of synthetic filaments. Through the extensive relocation of existing; and the generation of additional production capacity, the requirements have been accomplished and will thus directly serve increasing demand in the main volume markets. Part of this strategy, is the integration of one of the four German sites into the remaining three, this will then strengthen those sites and support the expansion of the factories in the USA and China.

The key to this success is a highly qualified and motivated personnel, engaged and focussed project staff and lastly but by no means least, loyal customers all of whom welcome this future direction and support us, their longstanding business partner. Important milestones are being reached with minimum disruption to the daily business in spite of a continuingly healthy order book

Important Milestones have so far been

• Implementing the newly built finished goods warehouse and a production line for PMC-Monofil at Hahl Inc, the production site in Lexington, SC
• Completing the building of the production hall with integrated admin building and starting to fit out the interior of the new production site in Haining, China. This is on schedule for the fixed opening date of 29 November 2018.
• Implementing an additional production line for PMC-Monofil into the Munderkingen site in Germany. Furthermore the planning for the transfer of an additional production line has also been finalised.
• Completion of the plant layout in the Industrial park in Bobingen (Germany) to allow for the transfer of several production lines from their current homes in Dormagen and Recytec in Munderkingen (Perlon’s recycling business).

With the help of a tailwind from the targets achieved thus far, Florian Kisling (Perlon CEO) and his team are looking forward with optimism to the additional transformation and the finalisation of this mammoth ground breaking project. They are already thinking ahead to the subsequent project ‘2020+’.