Lenzing will set up a new production facility in Thailand. Thai production volumes would be around 90,000 tons a year. Thailand is one of the few countries with free trade agreements in the Asean region as well as with China and India. This will enable Lenzing to supply to customers worldwide. Lenzing expects 2018 earnings to be lower than in the last two years, partly due to increased commodity prices and strong competition on the fiber market.
The company has halted a project in the US partly due to rising tariffs between the United States and China, where much of the project’s production was destined. Chinese textile exports to the United States now face a 10 per cent tariff, with the possibility tariffs might increase and China would respond with counter-duties. Lenzing’s assessment is that products such as its Lyocell fiber may be affected.
Lyocell, a fiber produced from wood, is one of the group’s top-sellers. Lenzing remains on track for specialty expansions such as Tencel Luxe filaments and Lenzing Ecovero viscose fibers. No substantial additional lyocell volumes, over and above the successful 25.000 tons expansion in Austria, will be added to the market in 2019 and 2020 by Lenzing.