Lenzing successfully opens world’s largest lyocell plant in Thailand

Prachinburi (Thailand) – The Lenzing Group, the world’s leading supplier of wood-based specialty fibers, is pleased to announce the successful completion of its key lyocell expansion project in Thailand. The new plant, the largest of its kind in the world with a nameplate capacity of 100,000 tons per year, started production on schedule and will help to even better meet the increasing customer demand for TENCEL™ branded lyocell fibers. For Lenzing, the pro-ject also represents an important step towards strengthening its leadership position in the specialty fiber mar-ket and into a carbon-free future.

The construction of the plant located at Industrial Park 304 in Prachinburi, around 150 kilometers northeast of Bangkok, started in the second half of 2019 and proceeded largely according to plan, despite the challenges arising from the COVID-19 pandemic. The recruiting and onboarding of new employees has been successful. Investments (CAPEX) amounted to approx. EUR 400 mn.

“We are very proud of this achievement. Our sincere thanks go to the entire Lenzing team and especially to our staff in Thailand but also to many external stakeholders, who joined forces in times of a global pandemic to make this key project reality. To deliver such a huge project in time and at budget is an outstanding achieve-ment given the challenges of the global pandemic”, said Cord Prinzhorn, CEO of Lenzing Group.

Robert van de Kerkhof, Member of the Managing Board, agreed with him and added: “The demand for our wood-based, biodegradable specialty fibers under the TENCEL™, LENZING™ ECOVERO™ and VEOCEL™ brands is growing very well. In Asia in particular, we see huge growth potential for our brands based on sus-tainable innovation. With the production start of the lyocell plant in Thailand, Lenzing reached an important milestone in its growth journey, supporting our ambitious goal to make the textile and nonwoven industries more sustainable.”

Worldwide expansion of lyocell production

Pollution of the environment – especially marine pollution – is one of the biggest problems of our time. The fashion industry has an extremely negative impact on the environment with its fast fashion business model and the growing consumption of fossil resources. The lyocell production process is the most modern method for producing fibers from wood. It has been successfully applied on an industrial scale for about 30 years and is particularly environmentally responsible. The underlying idea of the lyocell process is to dissolve and pro-cess the pulp in a closed loop without any chemical derivatisation.

Lenzing will continue to expand its production capacity for lyocell fibers in line with its sCore TEN strategy, which aims to generate 75 percent of its fiber revenue from eco-responsible specialty fibers such as TEN-CEL™,
LENZING™ ECOVERO™ and VEOCEL™ fibers by 2024. The Thailand site offers space for several produc-tion lines. The investment in the first phase already includes general infrastructure that would benefit future expansion. However, Lenzing will continue to look for opportunities to expand lyocell production in other parts of the world too.

Target of a zero-carbon future

“Investments in Thailand and other Lenzing sites around the world support us not only along our transfor-mation towards becoming a supplier of eco-friendly specialty fibers but also in implementing our ambitious climate targets, thus further increasing our company value”, said Cord Prinzhorn.

In 2019, Lenzing made a strategic commitment to reducing its greenhouse gas emissions per ton of product by 50 percent by 2030. The target is to be climate-neutral by 2050. Due to the established infrastructure, the site in Thailand can be supplied with sustainable biogenic energy and contribute significantly to climate pro-tection.

Together with the key project in Brazil and the substantial investments at the existing sites in Asia, Lenzing is currently implementing the largest investment program in its corporate history (with more than approx. EUR 1.5 bn). Lenzing will continue to drive the execution of its strategic projects, which are to make a significant con-tribution to earnings from 2022.