Austrian cellulose producer Lenzing Group is investing €27 million ($31 million) to expand short-cut lyocell production in Mobile, Alabama, completing a €50 million nonwovens capital allocation alongside €23 million in Austria. Executed under its ‘Grow Nonwovens. Reset Textiles.’ restructuring plan, this expansion offsets conventional apparel capacity reductions - including planned site wind-downs in Austria and the UK, plus divestment negotiations for its Indonesian viscose operations - by scaling custom cellulosic alternatives to fossil-based synthetics. 

Margin expansion amid textile restructuring

In the first nine months of 2026, Lenzing’s adjusted EBITDA margin rose to 18.3 per cent on €1.93 billion in revenue, supporting full-year adjusted EBITDA guidance of €430 million to €460 million. The third quarter marks a key milestone in our repositioning, with stable earnings proving our efficiency measures are working, says Georg Kasperkovitz, CEO. By exiting low-margin commodity textiles while advancing premium lines like Tencel Modal Micro Air, Lenzing is insulated from spot apparel volatility.

Apparel supply chain implications

For fashion brands, Lenzing’s reallocation signals tighter commodity viscose supply alongside expanded technical innovation. Regional spinning mills adopting Lenzing’s specialty Tencel fibers have already recorded 12 per cent lower processing waste and higher yarn yields, demonstrating how upstream specialty engineering directly lowers apparel manufacturing costs.

Bio-refinery expansion and sustainable fiber leadership

Established in 1938 in Austria, Lenzing Group manufactures wood-based cellulosic fibers and biorefinery products under Tencel, Ecovero, and Veocel for global apparel, home textile, and hygiene markets. Holding 1.11 million tons in nominal fiber capacity and €2.60 billion in 2025 revenue, Lenzing targets 20 to 25 per cent EBITDA margins from 2027 onward.