From the Sector

Pedex GmbH, the Wald Michelbach based Perlon Group company was named as a finalist of the ‘Großer Preis des Mittelstandes 2018’ (award for small and medium sized companies) at the gala dinner on 15th September 2018. Together with 21 other finalists from the four competing regions Baden Wurtemberg, Bavaria, Hesse and Thuringia came out on top against 2436 nominated businesses.

The motto for this year’s competition -‘Building for the future’ – is the foundation of the unity within our society.
On 24th May, the Oskar-Patzelt-Stiftung, the founder of this award for small and medium sized companies asked for nominations of excellent medium sized companies for the competition, (nominations cannot come from the company itself.) Only 1 in every 1000 German companies make it onto the list of nominations – this year Pedex GmbH made it! The prize winners meet 12 regional juries and a final jury. The focus of the jury (made up of representatives from business and education) is on the company as a whole and its multifaceted role within society. To aid evaluation, the jury asked about the establishment and safeguarding of jobs and apprenticeships, innovation and modernisation, involvement in the local area as well as service and proximity to customers.

Germany’s most sought after business accolade.
In 2018, more than 7400 institutions from the 16 counties (12 competing regions) throughout Germany nominated a total of 4,917 small and medium sized companies as well as banks and local authorities for the competition, from which a short list of 742 was selected. No other business award in Germany carries such weight (and has now for more than two decades) as the one that the Leipzig based Oskar-Patzelt-Stiftung has been awarding since 1994. The prize doesn’t offer any monetary reward. For the businesses involved, it’s simply about honour, public recognition and approval of their performance, without financial incentive.

• 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.

Built on an island right off the Finnish capital Helsinki, the Nolla cabin represents an ecological alternative to cabin life.

This summer, living with minimal emissions will be put to the test. Neste is building a prototype of a cabin that has a minimal environmental impact in terms of both carbon dioxide emissions and concrete impact on nature. The Nolla (= zero) cabin, designed by Finnish designer Robin Falck, is located just outside Helsinki city center, on the Vallisaari island. The cabin has been built from sustainable materials and is designed for a simple lifestyle with minimal to no emissions, taking into account the surrounding nature in every respect.

Located on the idyllic island of Vallisaari in the Helsinki archipelago, the Nolla cabin encourages people to consider how modern solutions and innovations could enable sustainable cabin living. Vallisaari has been in a natural state for decades and is thus the perfect location for an urban cabin experience, located at a 20-minute boat ride away from the Helsinki market square. The ecological and mobile Nolla cabin will be in Vallisaari until the end of September, demonstrating a lifestyle that generates minimal to no emissions.

Placing the compact and mobile cabin on its private lot does not require a construction permit
and it has been designed to use building materials as effectively as possible. The cabin is the size of a small bedroom and can be assembled and transported without heavy machinery, leaving its environment nearly untouched. The Nolla cabin has been designed by Finnish designer Robin Falck, whose earlier design, Nido cabin, has been globally acknowledged.

The Nolla cabin introduces solutions, which enable minimizing cabin life emissions remarkably. The energy supply of the cabin is entirely renewable; electricity is generated by solar panels, whilst the Wallas stove, reserved for cooking and heating, runs entirely on Neste MY Renewable Diesel, made 100% from waste and residue. The Aava Lines raft operating between Helsinki city centre and Vallisaari will also run on Neste MY Renewable diesel that can reduce greenhouse gas emissions by up to 90%.

“With the Nolla cabin, we want to offer visitors the possibility to experience modern cabin life in the realm of nature, with minimal emissions. An ecological lifestyle does not only require giving up unsustainable commodities, but also discovering modern, sustainable solutions that can be used instead. This has been an essential part of the design process”, says Falck.

“Finns are known for spending time at their beloved summer houses. We wanted to explore sustainable solutions that could enable cabin life with minimal emissions. Shared and circular economy, as well as new technologies and innovations have made it possible to enjoy our cabins without harming or burdening the environment. Some of the solutions that have been used at the Nolla cabin are perfectly adaptable at any cabin”, says Sirpa Tuomi, Marketing Director at Neste.

The Nolla cabin is executed in collaboration with Fortum, Wallas and Stockmann and is part of the Journey to Zero project by Neste, which explores new ideas and aims to steer the world towards a cleaner future with fewer emissions.

Archroma, a global leader in color and specialty chemicals, will be presenting its innovative and sustainable denim solutions for manufacturers and brands at DenimsandJeans Vietnam 2018, on June 27 and 28.
From fiber to finish, Archroma offers a scope of possibilities for effects and colors, from the authentic roots of indigo to the most innovative and eco-advanced solutions. Archroma is a recognized leader in integrated solutions, offering best-in-class auxiliaries for bespoke process packages.
Visitors will be able to discover solutions designed to make denim in a more sustainable and responsible way, in particular:
DENISOL®, BRINGING INDIGO BACK TO ITS ROOTS - NOW ANILINE-FREE*
Archroma’s Denisol® range is a newly developed pre-reduced liquid indigo solution that is manufactured in Archroma’s award winning ‘zero liquid discharge’ manufacturing plant in Pakistan.

• Denisol® Indigo 30 liq is compliant with major official eco-standards and requirements from retailers, brands and fashion leading companies and helps to produce fabrics suitable for current eco-labeling such as bluesign® and GOTS.
• Responding to demands for a non-toxic alternative to the dyes that are used for the iconic and traditional indigo blue that consumers associate with denim and jeans, Archroma just announced the upcoming new Denisol® Pure Indigo 30.

ADVANCED DENIM, TOWARDS WATERLESS DENIM DYEING
Consider this: The water needed to produce one pair of jeans is said to be ~ 11'000 liters(1). With approximately 167 million pairs of jeans produced monthly(2), that is 1,837,000,000,000 liters of water consumed every month in the process! Based on the Denim-Ox and Pad/Sizing-Ox dyeing processes, Archroma’s multi-awarded ADVANCED DENIM, dyeing technology allows savings of up to 92% in water, 87% in cotton waste and 30% in energy, compared to a conventional denim dyeing process.
The technology has been adopted by brands like Patagonia and received the prestigious 2012 ICIS Innovation Award and Innovation with Best Environmental Benefit Award.

• Optisul® C, “soft colors” made easy
  Colors other than blue have been tricky to achieve in the past. With Optisul® C dyes, denim manufacturers can expand their color horizons with this range of six dyes especially designed to produce soft denim colors in continuous dyeing processes, as well as on coating and printing. Optisul® C affinity-free, sulfide-free dyes can easily be combined with each other to create garments suitable for wash-down treatments in a wide array of easily achievable and reproducible soft colors. They are suitable for GOTS and bluesign® approval.
• Diresul® RDT Ocean Blues, ocean-themed bright sulfur blue dyes
  Archroma’s Diresul® RDT Ocean Blues are a collection of vibrant, ocean-themed bright sulfur blue dyes. These best-in-class dyes and their auxiliaries bring out the best of indigo, improve workability, dyeing consistency and process safety.
  They can be combined with Denisol® Indigo 30 liq in bottoming/topping manufacturing routes for avant-garde blue styles. At the booth, Archroma will display an “illustration collection” of exciting indigo casts.
• Diresul® blacks & greys, a universe of greys and deep black and navies.
  Archroma’s dye portfolio of conventional and black Diresul® specialties allow to create a universe of greys and deep black and navies. From superficial to solid blacks for both extreme wash-down and stay black effects.

EARTHCOLORS, TRACEABLE FROM NATURE TO FASHION
As consumers increasingly aspire to functional, beautiful and meaningful clothing, brands and manufacturers are increasingly interested in the environmental impact of the denim industry. Archroma has placed sustainability at the heart of its innovation process to create products and processes that improve the industry’s sustainability.
The EarthColors patented range of “biosynthetic” dyes for cotton and cellulose-based fabrics, which are made from waste left over by the agricultural and herbal industry after extraction, such as almond shells, saw palmetto, or rosemary leaves. The latest NFC technology used on the end-product hangtags enables transparency and traceability through the supply chain to consumers.
The EarthColors allow to produce the earth tones that are coming strong: red, brown and green colors. They have been adopted by brands such as Patagonia, Kathmandu and G-Star, and won an OutDoor Industry Award 2017.

SOLUTION PACKAGES FOR SUSTAINABILITY
Brand owners and retailers around the world are taking action to evaluate the environmental impact of textile treatment, dyeing and finishing processes in response to consumer concerns.

Archroma recently introduced the ONE WAY Process Simulator, the last update of a calculation tool that supports its ONE WAY Sustainability Service introduced back in 2012. The new, online software can be used to mimic and compare products and processes, and thus calculate the ecological and economical profile of the final end-product.
Archroma’s portfolio of ZDHC MRSL-compliant chemicals and dyes is integrated into the ONE WAY calculation tool since 2013.
“Innovation and sustainability go hand in hand,” says Paul O’Prey, Head of Sales, Brand & Performance Textile Specialties, Archroma, Vietnam. “While developing new products and services, we always consider the environmental impact so they are as sustainable as possible. This can be seen in our innovative and eco-advance products, such as the water-saving ADVANCED DENIM and the aniline-free* Denisol® Pure Indigo.”

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.