Lenzing will invest EUR70m at its facility in Heiligenkreuz where it makes Tencel fibres

Lenzing will invest EUR70m at its facility in Heiligenkreuz where it makes Tencel fibres

Austrian cellulosic fibre producer Lenzing is to invest more than EUR100m (US$111.5m) in its production facilities in Europe, in a move that will see the company increase its capacity for speciality fibres by 35,000 tons by mid-2018.

According to Lenzing, the company will invest around EUR70m into its manufacturing facility in Heiligenkreuz, Burgenland – where it makes its Tencel fibres – and EUR30m in its production site in Lenzing.

Speciality fibres currently account for 41.7% of the company's revenue but under its new group strategy, Score Ten, Lenzing wants to increase this to 50%. The planned capacity expansion at the sites in Heiligenkreuz and Lenzing, as well as at the company's site in Grimsby, UK, are the first steps in this expansion programme.

"We will invest more than EUR100m over the next 20 months to expand production capacities for our high-quality botanic fibers, 70% at the Heiligenkreuz site and 30% at Lenzing", says Lenzing's CEO Stefan Doboczky. "Given the strong market demand this expansion will help our customers in their growth plans as well as expanding our global market leadership position for speciality fibres."

The company adds it expects to see an increase of around 10,000 tons of speciality fibre by the end of 2016.

In the main, the investment will be made throughout the remainder of 2016 and into 2017 and will create 25 new jobs at the Heiligenkreuz site.

Earlier this year Lenzing said it expects a strong increase in demand for its speciality fibres. The company offered a confident outlook for the year ahead after substantial increase in first-quarter earnings – its best since 2012.

Lenzing eyes expansion as Q1 profit soars

It has also recently signed  an exclusive agreement with Inditex to manufacture premium raw materials from textile waste as part of the Spanish fashion giant's commitment to the circular economy.

Inditex and Lenzing close the loop on textile waste

The 2016 Preferred Fibre & Materials Market Report, published last month by international non-profit organisation Textile Exchange, shows projected fibre growth over the five years from 2015 to 2020 is set to be led by cellulosic fibres, with a rise of 5-6% per annum.

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