The Lenzing Group’s investment activities in 2022 continued to focus on the expansion of the Group’s internal dissolving wood pulp production, raising the share of specialty fibers, and implementing the climate targets in line with the corporate strategy.

Capital expenditure on intangible assets, on property, plant and equipment and on biological assets (CAPEX) decreased by 17.2 percent to EUR 698.9 mn. The continued high level of investment volume primarily reflects the completion of the pulp project in Brazil.

The new pulp mill, which has a nominal capacity of 500,000 tonnes per year, strengthens Lenzing’s self-sufficiency in dissolving wood pulp and consequently also its growth in the specialty fibers area in line with the company’s strategy. It is also one of the most productive and energy-efficient plants in the world and feeds surplus electricity into the public grid as renewable energy. Commissioning started to schedule in the first half of the year. The ramp-up phase was completed at the end of 2022 and the first volumes produced were successfully placed in the market. Lenzing holds 51 percent of the joint venture LD Celulose, which was established for the construction of the plant. The construction costs for this investment project in – the largest in Lenzing’s corporate history – amount to USD 1.38 bn. The financing was mainly provided by long-term debt funding. IFC, a member of the World Bank Group, and IDB Invest, a member of the IDB Group, are supporting the investment program. Export credit agency Finnvera and seven commercial banks also participated in the approximately USD 1.15 bn financing package.

In Thailand, the world’s largest lyocell production plant was opened in the first quarter of 2022. This will enable Lenzing to significantly increase its share of specialties and even better serve structurally growing demand for TENCEL™ brand lyocell fibers. Despite the pandemic-related challenges, the project was completed on time and within the planned budget, and the quantities produced to date have been successfully placed in the market. With a nominal capacity of 100,000 tonnes per year, the production plant is the largest of its kind in the world. The investment volume amounted to around EUR 400 mn.

Lenzing is currently investing more than EUR 200 mn in China and Indonesia to convert existing capacity for conventional viscose into capacity for environmentally responsible specialty fibers. In Nanjing, Lenzing is working on converting a line to modal fiber production. The product portfolio of the Chinese site will thereby consist entirely of specialty fibers. In Purwakarta, Lenzing is creating additional capacity for LENZING™ ECOVERO™ brand fibers. The Indonesian site will thereby become a pure specialty viscose supplier in 2023.

As part of these investments, both sites will be gradually converted to renewable energy. In the third quarter of 2022, conversion to green power was realized in China and in Indonesia. Both the new lyocell plant in Thailand, which will be operated on a carbon-neutral basis, and the investments in existing sites will help Lenzing achieve its ambitious climate targets. Lenzing aims to halve its carbon emissions by 2030 and achieve net zero by 2050.

In order to increase its independence from global energy markets and further reduce carbon emissions, Lenzing is also focusing to an even gretaer extent on electricity generated from renewable energies in Austria. During the reporting year, Lenzing commissioned several photovoltaic plants at its site in Upper Austria and signed a long-term electricity supply contract to finance a further plant.

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