The Fibers Division comprises all business activities of the Lenzing Group with the different generations of wood-based cellulosic fibers.
Specialty fibers are Lenzing’s great strength. The objective is to generate more than 75 percent of fiber revenues from business with wood-based specialty fibers such as lyocell and modal fibers by 2024. The focus of this strategic target was the start-up of the new state-of-the-art lyocell plant in Thailand with a nominal capacity of 100,000 tonnes. Production starts in the first quarter of 2022.
Moreover, Lenzing is investing more than EUR 200 mn in production sites in China and Indonesia to convert existing capacities for standard viscose into capacities for environmentally compatible specialty fibers. In Nanjing, Lenzing is working on converting a line to TENCEL™ modal fibers. The portfolio of the Chinese fiber plant will thereby consist entirely of specialty fibers by the end of 2022. As part of the investment in Purwakarta, Lenzing will bring its entire viscose production up to EU Ecolabel standards. The site will thereby become a pure specialty viscose supplier as of 2023.
In addition to the new lyocell plant in Thailand, which is designed to be carbon neutral, investments at existing sites are also in line with Lenzing’s targets to reduce carbon dioxide emissions per tonne of product by 50 percent by 2030, and to be climate neutral by 2050.
With the repositioning of its product brands, the Lenzing Group has been sending a strong message to consumers since 2018. With TENCEL™ und LENZING™ ECOVERO™ as umbrella brands for all specialty products in the textile segment, VEOCEL™ as the umbrella brand for all specialty nonwoven products, and LENZING™ for all industrial applications, the company showcases its strengths in a targeted manner. Lenzing continued to enhance the visibility of its brands in 2021 through targeted communication measures.
The revenue of the Fibers Division reached a level of EUR 1.9 bn in 2021, 69.4 percent of which was attributable to textile fibers and 30.6 percent to fibers for nonwovens and special applications. Fiber sales volume increased by 15.5 percent in 2021 to approximately 909,000 tonnes (2020: approximately 787,000 tonnes). The share of specialty fibers in fiber revenues decreased to 72.3 percent (2020: 76.2 %) as a consequence of the recovery in standard viscose prices. The division’s earnings (EBITDA) amounted to EUR 214 mn, while operating earnings (EBIT) stood at EUR 107.4 mn.
Textile fibers
The market for textile fibers performed very well in 2021, although significant differences in demand for standard viscose and specialty fibers were discernible in some cases.
Prices for standard viscose were very volatile. High energy, raw material and logistics costs coupled with poor availability of containers further affected the economic attractiveness of standard viscose fibers.
In contrast, the wood-based specialty fibers business recorded stable and high demand in all major producing textile markets such as China, India, Pakistan, Bangladesh and Turkey, as well as for all Lenzing product groups (TENCEL™ lyocell and modal fibers, LENZING™ ECOVERO™ fibers), driven by growing demand for high-quality and sustainably produced fibers from retailers and fashion brands.
Lenzing also presented a variety of new fiber innovations in 2021, which help make its partners’ product ranges more sustainable.
In February, Lenzing launched TENCEL™ brand modal fibers with Indigo Color technology. The single-stage spun-dyeing process used here enables indigo pigments to be incorporated directly into the fiber. Compared to conventional indigo dyeing processes, this ensures better color fastness with significantly lower resource consumption. The product has been awarded the EU Ecolabel. This label is awarded to products that meet high environmental standards throughout their life cycle.
To meet demand for more recycling solutions in the textile and apparel industry, in September Lenzing presented carbon-neutral TENCEL™ fibers enhanced by REFIBRA™ recycling technology. The carbon-free lyocell and modal fibers of the TENCEL™ brand generated significant growth in interest among customers and partners along the value chain in 2021. These fibers represent an important step taken by Lenzing and its partners on their joint path to carbon neutrality.
In October, Lenzing expanded its product range to include matt TENCEL™ lyocell fibers. These provide a matt appearance to garments, in contrast to the typical sheen of TENCEL™ lyocell fibers. Feedback from fashion brands and retailers was very positive, leading to good initial sales figures.
In addition to environmental protection, transparency also represents a great challenge for the textile industry. To address the issue, Lenzing expanded its fiber identification system to include TENCEL™ lyocell and modal fibers in 2021. With this step, the company once again underlined its commitment to a transparent textile value chain.
In addition, Lenzing offers an innovative solution based on blockchain technology in collaboration with TextileGenesis™ to ensure traceability along the textile value chain. As of December 31, 2021, more than 600 different partner companies have been successfully integrated into the platform. Thanks to the innovative Fibercoin™ technology of the TextileGenesis™ platform, Lenzing is able to issue digital tokens in direct proportion to physical fiber deliveries. These track deliveries along the value chain and act as a kind of digital twin. The feedback from leading fashion brands and retailers is positive.
Lenzing also made very good progress in the development of the lyocell filament business under the TENCEL™ Luxe brand. TENCEL™ Luxe filaments have been registered with The Vegan Society™ since 2021. The independent certificate proves that the wood-based filaments are manufactured entirely without animal testing or animal components. In 2021, more fabrics were developed as sustainable and vegan alternatives to silk fabrics for outerwear, footwear, activewear and traditional Indian clothing. Leading fashion brands and designers have already incorporated some of these developments into their collections. Lenzing also optimized the operation of its second pilot plant in 2021 and received approval for a project to eliminate capacity bottlenecks in December as a consequence of the positive market trend.
In addition, Lenzing further expanded the awareness and visibility of its TENCEL™ and LENZING™ ECOVERO™ brands in 2021. In the first half of the year, Lenzing reached more than 400 million consumers worldwide with brand activation at Earth Day (#checkwhatsgood), the Oscars (with Red Carpet Green Dress and TENCEL™ Luxe) and #FeelsSoRight. New co-branding initiatives in collaboration with partners such as Zara, PULL&BEAR, Zalando, Massimo Dutti, Camper, H&M and Esprit have greatly increased visibility in the market. The TENCEL™ eShop was opened in February 2021. It now includes ten brands, including Levi’s®, H&M, Esprit, Jack & Jones, J.Crew, Mara Hoffman and West Elm. It is the world’s first e-commerce portal from a sustainable fiber producer. It was featured in Vogue magazine and has reached over 20 million people to date. The portal now has more than 100,000 page views from an international audience and is continuing to grow. To further raise awareness for sustainable fashion, Lenzing implemented the #MakeItFeelRight campaign from June to December. By the end of the year under review, 510 million consumers in nine countries had been reached.
Nonwoven fibers
The nonwoven fibers business continued to comprise an important strategic pillar for Lenzing in the second year of the pandemic. Higher demand for hygiene products as a consequence of COVID-19 also had a positive impact on demand for nonwoven fibers in the first half of 2021. The high level of stocks worldwide weakened this effect somewhat in the second half of the year.
Lenzing’s nonwoven fibers business also continued to benefit from the long-term global trend toward more sustainable, biodegradable materials, supported by new regulations in the markets. The company welcomes the issuance of the guidelines for the implementation of the Single-Use Plastics Directive (EU) 2019/904, which came into force on June 5, 2019. In this directive, the EU Commission specifies which products fall within its scope, thereby providing clarity in the EU member states’ joint fight against plastic waste pollution. Lenzing’s wood-based and biodegradable nonwoven fibers, such as those under the VEOCEL™ brand, offer a sustainable and innovative solution to this man-made problem. The Single-Use Plastics Directive also provides for uniform labeling requirements for certain products on either the packaging or on the product itself from July 3, 2021. These include feminine hygiene products and wet wipes for personal and household care that contain plastics. With its VEOCEL™ brand, Lenzing provides consumers with clear guidance for their purchasing decisions: products bearing the VEOCEL™ brand logo on their packaging follow stringent certification criteria. This assures consumers that the fibers of the labeled product are biodegradable and contain 100 percent cellulosic material.
With the #ItsInOurHands environmental initiative, the VEOCEL™ brand is specifically raising consumer awareness of issues such as sustainable materials, as well as climate and environmental protection. In 2021, the initiative achieved a global reach of more than 70 million, again also increasing the visibility of the VEOCEL™ brand. With the “It’s In Our Hands” school project, the brand is also involved in the “Citizen Science” area, which aims to raise awareness among students aged 10 to 16 concerning the importance of sustainable materials in everyday products. The launch took place in the fall of 2021 in the USA, Germany and Austria.
With the “Nature re-imagined” campaign, Lenzing placed an even greater focus on its particularly environmentally compatible lyocell process in its advertising activities in 2021. The process developed by Lenzing enables more than 99 percent of the solvent to be recovered in a closed loop and to be always fed back into the production process. With VEOCEL™ brand lyocell fibers, Lenzing thereby offers customers in the nonwovens sector a sustainable fiber that also features special properties in terms of quality.
As part of the “Climate Care” campaign, Lenzing launched the first carbon-neutral cellulosic fibers on the global nonwovens market in the second quarter. The launch of fibers certified as CarbonNeutral® products in accordance with the CarbonNeutral Protocol guidelines represents a further milestone on the joint journey of Lenzing and its partners towards carbon dioxide neutrality. This new offering in the VEOCEL™ brand portfolio is the result of targeted measures to reduce specific product emissions. By utilizing renewable energies, low carbon dioxide raw materials and energy sources, efficient production methods, and carbon dioxide offsetting via verified climate protection projects, it is possible for the first time to offer fibers for nonwoven fibers with a carbon-neutral footprint.
The hydrophobic LENZING™ Lyocell Dry fiber is a further product innovation from the year under review. This combines the benefits of standard lyocell fiber with the ability to repel moisture and liquid. Unlike conventional cellulosic fibers, water cannot penetrate the fibers, with the water instead forming beads on the surface. The fiber thereby makes it possible to tap further application areas that were previously largely dependent on petroleum-based fibers.
With a focus on information and education as well as innovative new products, the company succeeded in expanding its global brand presence and network of co-branding partners in 2021: in the USA, the VEOCEL™ brand cooperates with well-known brands such as Coterie and Neutrogena, and in China with Kotex, a brand of US hygiene products manufacturer Kimberly-Clark. In Turkey, the VEOCEL™ brand joined the multimedia campaign of Turkish hygiene products manufacturer DeepFresh.
Co-products of fiber production
The Lenzing Group produces LENZING™ sodium sulfate as a co-product at all locations where viscose or modal fibers are manufactured. This is used in the detergent and glass industries and for the production of food and animal feed. Sales volumes at the Lenzing site increased by 12 percent year-on-year in 2021.
Since 2019, Lenzing has produced and marketed LENZING™ calcium sulfate, a further co-product reporting a constant trend level. Sales volumes already amounted to 16,000 tonnes in 2021.
