From the Sector

ROICA™ experts showcase the world-first ROICA Eco-Smart™ Family that offers 2 responsible made yarns: a GRS (Global Recycled Standard) version 3 certified yarn and the world’s first yarn awarded Cradle2Cradle Material Health Gold Level Certificate and Hohenstein Environment compatibility certification.
ROICA Eco-Smart™ Family is a range of the world's first responsibly made premium stretch fibers, which create ROICA™ smart yarns that offer sustainable solutions with impressive certifications:

• Global Recycled Standard (GRS) certified by Textile Exchange - ROICA™ constructed with more than 50% pre-consumer recycled content.
• Cradle to Cradle Certified™ Gold Level for Material Health product and ingredients - ROICA™ yarn evaluated throughout the supply chain for lower impacts on human and environmental health. Striving toward eliminating all toxic and unidentified chemicals for a safe continuous cycle. Hohenstein Environment Compatibility Certificate - ROICA™ proudly breaks down without releasing harmful substances.

At the corporate level, ROICA™ has achieved the following certifications: Oeko Tex 100, ISO 14001:2004, ISO 9001:2008. Moreover, ROICA™ mills in Germany achieved the certification of ISO 50001:2001.
 

• 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.

• More than EUR 100 mn investment in sustainable production technology until 2022
• Lenzing is committed to improving the textile and nonwoven industries as a leader in sustainable fiber solutions
• UN-Sustainable Development Goals as guiding principles for Lenzing’s sustainability agenda
• All Lenzing sites strive to fulfill the EU Ecolabel standard by 2022

The Lenzing Group, producer of botanic fibers from wood, expands its environmental leadership commitment. As a leader in wood-based cellulosic fibers, Lenzing has particular responsibility and ambition to help raising the bar in sustainability in the textile and nonwovens industries. To fulfill this vision, Lenzing is continuing its ambitious roadmap by investing more than EUR 100 mn in sustainable manufacturing technologies and production facilities until 2022.
 
Lenzing’s circular operating models with closed loop production processes set the standard in the industry. In order to further extend the environmental leadership, a major part of this investment will focus on closed loop production technologies for the expansion of the sulfur recovery systems. The second area of investment will be in improving the effluent treatment units. In addition, Lenzing will upgrade its energy usage to more sustainable solutions reducing its greenhouse gas emissions due to the construction of a gas boiler at its site in China. This investment strengthens Lenzing’s sustainability leadership at its Viscose facility in Nanjing.
 
The investments underline Lenzing’s commitment to the United Nations Sustainable Development Goals (SDG) as guiding principles for its sustainability agenda. One of the most significant SDGs for the company is SDG 12: Responsible production and consumption.
 
Stefan Doboczky, Chief Executive Officer, comments: “The textile and the nonwoven industries face fundamental challenges related to sustainability. Lenzing is passionate to take a leadership role in addressing this and making the world a better place. Our holistic approach to sustainability underpins this scope. The new eco-investment program is a major step forward in our ambitions.”
 
“The United Nations Sustainable Development Goals are a universal call for a sustainable economy that protects the planet and ensures prosperity and well-being for all people”, states Lenzing Chief Commercial
Officer Robert van de Kerkhof. “With our REFIBRA™ technology, Lenzing is innovating to support a more circular, bio-based economy, contributing in particular to SDG 12”, he adds.
 
With the Lenzing Group sustainability targets announced in 2018, Lenzing strives to upgrade all its production sites to the ambitious European Ecolabel standard by 2022. As a result, Lenzing is one of the first companies to commit to a global sustainability-oriented manufacturing standard.

In line with the powerful global trend towards smarter fashion solutions, Iluna Group launches its Embroidery Division. Specialists in lace since 1985, the new Embroidery Division offers a complete and innovative product match in line with the modern expectations of brands and retailers. Staying true to Iluna’s DNA, the introduction of embroidery and guipure are all produced with only recycled materials.
IIn addition to the launch of the Embroidery Division, this season novelties include:

1. Of major interest today, the launch of velvet lace entirely made of sustainable materials including ROICA™ Eco-Smart family.

2. Within the Black Label collection, the Ultralight series is enriched with new multicolor floral galloons: here Iluna changes the color of the thread not only in the background, but also in the design, the same article reinvents itself in a variety of great visual impact.

3. Green Label collection, the Iluna dedicated range featuring a new responsible approach in respect of the planet and people, able to deliver innovation, beauty and quality, at 360°. In addition to the all over, jacquard, double jacquard and mesh offer, the line is also featuring new stretch Galloon laces fully made with GRS certified recycled materials, including the stretch thanks to the introduction of the unique ROICA™ sustainable yarn part of the ROICA™ Eco-Smart family.

4. ILUNA has strategically included in all their stretch laces only ROICA™ Eco-Smart family of sustainable yarns since some time.

5. ILUNA can also boast its new STeP (Sustainable Textile Production) certification by Oeko-Tex, a certification that clarifies and communicates the company’s sustainable production commitment. In addition to this, all products are Oeko-Tex 100 certified.

6. ILUNA has created the new e-shop offering its exclusive materials to smaller companies looking for added values as: creativity, innovation, made in Italy and responsibility.

7. The whole collection is also visible online at its web site, previous registration, and orders can be done directly online always aiming to customers care.

FILPUCCI GROUP proceeds along the path of commitment towards an ever more responsible innovation. The group takes part in the 83rd edition of Pitti Filati (June 27-29, 2018) with unique products, high-end knitwear and creative yarns, all resulting from the authentic Smart Innovation the company has been long committed to.
 
Research, style and fashion are key words for the world-renown Tuscan company, which unveils an always more responsible approach both at a corporate level and in terms of offer.
Here are some key elements to prove Filpucci’s relentless commitment:

• The GOTS (Global Organic Textile Standard) and OCS (Organic Content Standard) certifications obtained by the Filpucci dyeing plant add to the Clear to Wear (CTW) standard developed by Inditex Group and achieved in 2014 and to the Detox commitment, which was signed in February, 2016.
• Not only the best raw materials, but also an established knowhow in the fields of dyeing and finishing, always under the key concept of Responsible Innovation. This concept extends to each and every FILPUCCI collection and their ever-increasing offer, the roughly twenty innovative new items, the Woolen line of carded yarns and the real spearhead of premium fashion, the Collection. Among this season’s new offer: Baby Camel Re.Verso™, RWS- certified merino organic wool, Re.Verso™ cashmere, organic silks and FSC-certified viscose.
• The achievement of further certifications such as the FSC (Forest Stewardship Council) for viscose shows the care and respect towards the ecosystem as a whole, guaranteeing a product derived from a forest or a plantation forest in the respect of strict environmental, social and economic standards. The RWS (Responsible Wool Standard) finally guarantees the use of wool coming from livestock managed under rigorous criteria oriented towards the wellbeing of animals and the reduction of environmental impact.
• Filpucci Group is all about a constant vocation towards new generation values and a reliable, traceable and transparent manufacturing process, as shown by the Re.Verso™ circular economy supply chain, of which the group is a unique ambassador in the field of high-end/low-impact knitwear yarns.

With absolute quality always in mind, FILPUCCI GROUP represents a corporate model that has made of sustainability a real mission, embarking on complex paths that have brought great results with fashionable textile solutions lead by ethnical and sustainable values. Thanks to this, Filpucci’s products have become part of Patagonia Collections, an important acknowledging from the brand’s part, whose managers stated: “We are always on the hunt for the highest performing, lowest impact materials. We were thrilled to find Re.Verso ™ (95/5 transformed) Cashmere yarn from Filpucci. It allowed us to create a range of products with the insulative and soft properties of cashmere while adhering to our mission statement; build the best product, cause no unnecessary harm.”
FILPUCCI GROUP’s commitment is evident and it moves forward thanks to the passion towards responsible and innovative paths that contribute to turning the group into a reliable partner, symbol of quality and excellence.

Filpucci is also a C.L.A.S.S. (Creativity Lifestyle And Sustainable Synergy) partner.

This July at Interfilière, discover responsible innovation and well-being at the ROICA™ booth.

ROICA™ partners create innovative fabrics for the Modern Wardrobe. See, feel, imagine and learn why brands are choosing ROICA™, view the collection of superior functional fabrics that revolutionize the premium stretch market, thanks to advanced yarn solutions dedicated to specific needs of the contemporary consumer.

Spearheading the stretch market, ROICA™ elevates new standards for intelligent contemporary consumers. ROICA™ representatives will excite you as they demonstrate functionality, their advanced color technology system, and show you a fantastic range of stretch innovations from smart shapewear to soft compression that can enhance designs. Come visit the ROICA™ booth to learn about the ongoing commitment to responsible innovation and creativity. As you enter, you will experience 3 Modern Wardrobe concept zones that showcase:

1. ROICA™ Lifestyle – a beautiful selection of commercial lingerie, swimwear and nightwear items from leading brands that include ROICA™, embracing the ROICA™ Eco Smart family of yarns.

2. ROICA™ Innovation – an exciting area that shares our textile partners’ innovations to inspire endless possibilities. This area will showcase lingerie concept garments for brands that will spark ideas for AW 19/20.

3. ROICA™ Lab – the zone that navigates you toward the latest hi-tech Modern Wardrobe solutions. This zone hosts unmatched premium stretch performance designed to exceed contemporary business and consumer desires belonging to ROICA™ Eco-Smart family and ROICA™ Feel Good family .

ROICA™ Eco-Smart family, the world's first range of responsibly made premium stretch fibers creating ROICA™ smart yarns that offer sustainable solutions with prestigious certifications:

• Global Recycling Standard (GRS) Version 3.0 certified by Textile Exchange - ROICA™ Version 3.0 yarn constructed with more than 50% pre-consumer recycled content.
• Cradle to Cradle Certified™ Gold for product and ingredients - ROICA™ yarn evaluated throughout the supply chain for lower impacts on human and environmental health. Striving toward eliminating all toxic and unidentified chemicals for a safe continuous cycle. Hohenstein Environment Compatibility Certificate - ROICA™ proudly breaks down without releasing harmful substances.

ROICA™ partners featuring ROICA™ Eco-Smart family include:
Giemme, Iluna Group S.p.A, Maglificio Ripa S.p.A, M.I.T.I. Spa, Penn Textile Solutions, Sofileta, Tessitura Colombo Antonio Tintex Textiles

ROICA™ Feel Good family, a brilliant range of advanced stretch fibers that deliver personal performance and measurable wellness. Thus, providing freshness and comfort metrics perfect for travel, sport, leisure and more. The family now offers a premium innovation:

• ROICA™ CF, an innovative yarn that neutralizes odors thanks to an active ingredient interlocked within the yarn. This durable stretch yarn offers a fantastic property to every wearer.

ROICA™ partners featuring ROICA™ CF include: Maglificio Ripa S.p.A., TINTEX Textiles.

ROICA™ also presents the following families through our textile partners’ innovations within the ROICA™ Innovation area:

• ROICA™ Color Perfect family - advanced color technology system that delivers a perfect color match finish with an undetectable matte look for the stretch materials.
• ROICA™ Contour family - high performance stretch yarn control that delivers a calibrated form optimizing power, softness and comfort.
• ROICA™ Resistance family - innovations linked to durability and functions to match particular applications including heat and chemical resistance in make and wear.

• Deep Insights into the Multifaceted World of Cotton
• Quality, Innovation and Digitalisation are Crucial

From the 21st to the 23rd of March, the international cotton industry came together in the historic Bremen Town Hall, under the motto "Cotton Insights". More than 500 participants from almost 40 countries came to exchange views on the latest trends in the natural raw material as part of the conference organised by the Bremen Cotton Exchange in cooperation with the Fibre Institute Bremen. The 34th International Cotton Conference provided a varied, in-depth programme which addressed the current and burning issues within the industry.

Summarising his visit to the conference, Kai Hughes, Executive Director of the International Cotton Advisory Committee (ICAC) in Washington said “The Bremen Cotton Conference is unique because it brings the diverse world of cotton together in one place. It is always a great opportunity to learn about the latest innovations, talk to cotton merchants and get an overview of the industry".

Sustainability and Cotton
This year, the conference developed into a whole week of diverse events around the entire cotton supply chain. With the “SUSTAIN” event, which was organised in cooperation with the Weser-Kurier newspaper, it was possible to build a bridge between the issue of sustainability and the end consumer.
With the focus on Africa, the emerging continent, which also has a special significance for cotton, became the centre of attention.

In his opening speech, Henning Hammer, President of the Bremen Cotton Exchange, made it clear that sustainability is also of great importance during the Cotton Conference: "The three pillars of sustainability – the environment, the economy and social issues – were already playing a role in the cotton industry when the word sustainability was far from being on everyone's lips.
Many changes that are being demanded in the sense of responsible agriculture and responsible trade take their time, many are already in the starting blocks and a lot already exists. We have a very alert, active agricultural research worldwide."

The Keynotes
The keynote session, moderated by the journalist Lisa Boekhoff from the newspaper Weser-Kurier, gave participants an overview, with an informative analysis of the current cotton situation. Kai Hughes, executive director of ICAC, emphasised in his keynote address the need to provide credible facts and figures which should be the basis for the entire supply chain. The marketing of cotton and changing consumer habits in a globalised and digitalised world were the subject of lectures by Mark Messura, Cotton Incorporated and Robert Antoshak, Olah Inc. Eugen Weinberg and Michael Alt from Commerzbank took a look at the raw material from a stock market perspective.

Traceability and Digitalisation
Digitalisation is also a cross-cutting issue that runs through the entire supply chain of the cotton industry. In his opening speech, Prof. Axel S. Hermann, Head of the Fibre Institute Bremen, emphasised the importance of digitalisation for the industry. “It enables new approaches in cotton cultivation and textile processing, but also influences consumer behaviour and thus the necessary changes in the textile industry.” The focus is on the status quo of the implementation, as well as the opportunities and risks of digitally controlled, vertically integrated procurement and sales processes and the associated challenges at retail level.

Another current topic is traceability, which is also closely linked to sustainability. More and more buyers want to know whether their suppliers are meeting the promised sustainability criteria for their products, also textile products. Consequently, the conference presented various techniques for testing the authenticity of a cotton provided in the finished textile, such as DNA testing, fingerprint analysis technique, marker methods and block-chain processes.

Cotton Quality
In addition to current subjects such as digitalisation and traceability, questions of cotton quality have traditionally been an essential element of the Cotton Conference, which was further reinforced this year with the "Spinners Seminar". The spinning mill seminar, which was carried out by the Cotton Exchange and the Fibre Institute in cooperation with the ITMF and IVGT associations, far exceeded expectations.

More than 70 participants discussed the handling of impurities in supplied cotton in the manufacturing process.
In addition, in a high-level expert session, there was an exchange of the latest research results which determine the future of cotton production and the processing of cotton into innovative products.

What Keeps Consumers Up at Night?

Climate change appears to be a bigger concern for consumers than recent media reports may have indicated. In the ground-breaking, global, quantitative consumer survey, “The Key to Confidence: Consumers and Textile Sustainability—Attitudes, Changing Behaviors, and Outlooks”, commissioned by the OEKO-TEX® Association in commemoration of its 25th Anniversary, climate change ranked third on a list of sixteen modern day worries on the minds of today’s consumers.

“The Key to Confidence” online study was conducted earlier this year with a worldwide sample of more than 11,000 clothing and home textile consumers. Designed and administered by global brand and sustainability research expert, Ellen Karp of Anerca International, the extensive study explored a broad assortment of consumer attitudes about textile sustainability including harmful substances, the industry’s environmental impact, and the social welfare of textile workers.

Prior to answering questions about clothing and home textiles in particular, consumers responded to several queries to gauge their attitudes about sustainability in general. To understand the relative importance of climate change, consumers were asked to pick the top five issues that worry them most from a list of sixteen political, economic, personal, and global problems. “Terrorism” ranked first with 49% of consumers listing it in their top 5, “illness and disease” was second with 42%, and “climate change” rated third with 41%. “My personal finances” came in fourth at 37%. “Opportunities for my children in the future” and “the political leadership in my country” tied for fifth with 31% each.

“Climate change has become a significant issue for consumers,” Karp concludes. “Erratic weather patterns, mounting scientific data, escalating political debate, and first-hand experience with environmental degradation combine to make climate change more of an immediate threat than people considered it to be just a decade ago.”

“For twenty-five years, OEKO-TEX® has helped reduce the use of harmful chemicals and increase sustainable manufacturing practices in the global textile supply chain,” says Anna Czerwinska, Head of Marketing and Communication at OEKO-TEX®. “Our certified clients are industry leaders in the production of compliant, high quality textiles that are tested for harmful substances and responsibly made with respect for the environment and employees. They will be well positioned to capitalize on the growing consumer demands for sustainable textile products.”

A webinar with Ellen Karp presenting the research findings can be viewed at https://rebrand.ly/oekotexTKTCweb. To learn more about “The Key to Confidence: Consumers and Textile Sustainability—Attitudes, Changing Behaviors, and Outlooks”, please contact Trish Martin at t.martin@oeko-tex.com or Anna Czerwinska at a.czerwinska@oeko-tex.com. Read more about the OEKO-TEX® portfolio of testing, certification, and label products at: www.OEKO-TEX.com