Lenzing Suspends US Lyocell Project
Austrian fibers producer Lenzing has decided to temporarily mothball its lyocell expansion project in Mobile, Alabama, USA.
The company said the rising likelihood of increasing trade tariffs along with a potential surge in construction costs from a buoyant US labor market have increased the risk profile of the project.
Lenzing originally intended to invest $293 million to build a 90,000 t/y Tencel fiber plant at Mobile, with completion due in the first quarter of 2019.
As a result of its decision, Lenzing said it will now focus its efforts on readjusting its growth plan to meet strong market demand for lyocell fibers. This includes an increased focus on its expansion project in Prachinburi, Thailand, which the company announced in June 2017. A new plant, designed to produce up to 100,000 t/y, is scheduled for completion at end 2020.
The company said it will reassess its decision on an ongoing basis although stated that it will add no substantial volumes for lyocell in 2019 and 2020, over and above the previously announced 25,000 t/y expansion in Heiliigenkreuz, Austria.
Lenzing added that it remained on track with its expansions for specialty fibers Tencel Luxe and Ecovero. In May 2018, it announced a €30 million investment in a further pilot plant at Lenzing for Tencel Luxe along with the start of production in China for its Ecovero viscose fibers.
The Austrian group is aiming to raise specialty fibers’ share of its revenue from 42% currently to 50% by 2020.