The Austrian manufacturer will phase out production at its fibre plants in Heiligenkreuz, Austria, by the end of 2026 and Grimsby, UK, by the end of 2027.
The production footprint optimisation forms part of the company’s new “Grow Nonwovens, Reset Textiles” strategy, which includes growing its nonwovens business, resetting its textiles operations and further strengthening its pulp division.
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Lenzing said the transformation will strengthen selected core manufacturing sites, including its flagship site in Lenzing, Austria, while ensuring a stable and reliable supply for customers.
Alongside the closures, Lenzing is evaluating strategic options for the affected sites, including potential divestments or other value-preserving solutions. Should no viable outcome be achieved, the company plans to implement a structured and orderly wind-down, with a focus on safety, supply reliability, customer continuity, and social and environmental responsibility.
CEO Georg Kasperkovitz said: ” “With “Grow Nonwovens, Reset Textiles”, Lenzing is taking decisive steps to reposition the company for long-term success in a fundamentally changing market environment. By combining a streamlined premium product portfolio, improved competitiveness and a strong proprietary innovation pipeline, we are creating the foundation for profitable growth and a more focused, resilient Lenzing.
“At the same time, this transformation will strengthen our main production site in Lenzing, Austria, and support a sustainably profitable and competitive future for the site.,”
The strategy hopes to improve competitiveness, profitability and return on invested capital as market conditions for man-made cellulosic fibres continue to evolve.
Lenzing plans to sharpen its focus on nonwovens applications while reshaping its textiles business, supported by proprietary technologies including TreeToTextile, LENZING™ Nonwoven Technology and advanced filament solutions.
As part of the strategy, Lenzing also plans substantial organic growth of its nonwovens business by 2030.
The company has already committed €23m ($26m) in investments to expand nonwovens production capacity at its site in Austria and is also upgrading its Mobile, Alabama, production facility into a specialty nonwovens site.
Within textiles, the company will focus on differentiated premium market segments and strategic customer partnerships while continuing to reduce its exposure to commodity textile products such as standard viscose fibres.
Sharpened performance programme and refinancing
The transformation also includes a sharpened performance programme targeting €120m in cost savings compared with 2025 actuals by the end of 2027, including €45m in previously announced personnel cost savings. Lenzing said the programme is expected to deliver an EBITDA uplift of approximately €150m, with a medium-term EBITDA margin target of 20-25% and a leverage ratio below 2.5x.
Lenzing’s global workforce is expected to decrease significantly from approximately 8,100 employees (7,700 FTE) at the end of 2025 through to the end of 2027. The reductions will primarily affect employees at the sites in Heiligenkreuz, Grimsby and Purwakarta, Indonesia, as well as the previously announced reduction of 600 SG&A positions across the Group.
For employees affected in Heiligenkreuz, an existing social plan applies, while discussions will take place with employee representatives and stakeholders in Grimsby regarding support measures. Workforce-related efficiency measures are also planned for the Indonesian operation during the third quarter of 2026.
Kasperkovitz acknowledged the impact on employees, adding: “We are fully aware that phasing out production at plants is a difficult but necessary decision that affects our employees. It is important to me that we act responsibly toward our employees also in this situation. We are currently engaged in constructive discussions with employee representatives regarding the necessary measures under the existing social plans and applicable local frameworks.”
To support the transformation, Lenzing intends to strengthen its financial structure through a capital increase of up to €300m, subject to shareholder approval, alongside new financing agreements of up to €300m and the extension of existing debt maturities to 2030.
The company said the refinancing package will provide the financial flexibility needed to execute its “Grow Nonwovens, Reset Textiles” strategy while strengthening its long-term financial position.
