INSIDE EUROPE: Lenzing Building VSF Plant in China

The Lenzing Group will build a viscose staple fiber plant in China. The new production site, to be situated in an industrial park near the town of Nanjing in southeast Jiangsu Province, will have a capacity of about 60,000 ton/year fiber for textile and nonwovens applications. Lenzing will contribute key technology to the new site to assure high product quality standards as well as European environmental standards. Start-up is expected in the fourth quarter of 2006 after a construction time of about 18 months.

Lenzing has joined hands with Nanjing Chemical Fibre Co., Ltd. (NCFC), as the local partner for this new viscose fiber plant. Lenzing and NCFC will operate the new plant on a joint-venture basis, with Lenzing holding a majority of the shares. NCFC is China's seventh largest viscose fiber manufacturer and a stock listed company. Having NCFC as a partner will contribute essentially to a good market introduction and a smooth start-up of the enterprise. NCFC will also provide the necessary infrastructure for the joint venture.

"The availability of a Chinese production capacity is another important milestone on the road towards our presence in Chinese and Asian markets," says Lenzing Chairman Thomas Fahnemann. Up to now, the vigorously growing Chinese market has been supplied from production sites in Austria and Indonesia. Last year, Lenzing launched a sales company in Shanghai.

An intensive evaluation phase preceded the decision in favor of a local production site. "By manufacturing in China, we not only save on import duties but in the first place, we come closer to our customers on this important market," says Fahnemann.

With a VSF consumption of more than 800,000 tons, China is the world's most important market for viscose and modal fibers. During the past five years, the boom of the Chinese textile industry has resulted in double-digit growth rates, which are expected to continue in the future as well. After this fast growing period in the textile industry, Lenzing expects strong growth for nonwovens applications in China as well.