The Lenzing Group said it will invest more than €100 million over the next 20 months to expand production capacities for its wood-based specialty fibers, which are used by many outdoor and athletic apparel brands.
About 70 percent of the sum will be used to expand capacity to make Tencel fiber at the company’s factory at its Heiligenkreuz site in Burgenland, Austria, and the remainder at its production site in Lenzing, said 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 specialty fibers,” he said.
Lenzing has set the target of increasing the share of specialty fibers as a proportion of its total revenue to 50.0% by the year 2020. Specialty fibers currently account for 41.7% of revenue.
The planned capacity expansion of 35,000 tons of specialty fibers will take place at the sites in Heiligenkreuz and Lenzing, as well as at the site in Grimsby, Great Britain. The company said it expects 10,000 tons of that fiber capacity to be available by the end of this year, with the balance following in 2017.
Lenzing AG decided to start its investment program for specialty fibers at its existing sites in Austria and the U.K. as it allows fast capacity ramp-up.