Letter from the
Chief Executive Officer
Dear Reader,
It is my great pleasure to welcome you. Introducing a report of this kind so soon in my tenure as Chief Executive Officer means that all the credit and recognition for the results outlined here goes to others, primarily to Lenzingers, as we like to call our employees. Credit is also due to our customers, shareholders, suppliers and partners, who are with this company on its journey towards a model of prosperity and growth that protects and enhances the natural world. As part of that journey, our reporting has made the transition from print to digital. I hope you will like the functionality this provides, as well as approve of its reduced environmental impact. I invite you to explore the links and features you will find here, and I hope you enjoy creating your own experience according to your particular needs and interests.
My role at Lenzing has two aspects. I joined the Supervisory Board in May 2021, and took over as Chief Executive Officer on an interim basis in November. This allows me to combine detailed knowledge of the company with the clear eye of a new hire. I will continue to serve on the Supervisory Board once a permanent Chief Executive Officer is appointed, and whoever that person is, I am certain they will share the passion I have felt over many years for this industry, especially for its transformational potential in sustainability. With that in mind, allow me to express my thanks to my predecessor, Stefan Doboczky, for his service.
The Lenzing team in Prachinburi (Thailand), the largest lyocell plant in the world.
In the context of the ongoing COVID-19 pandemic that has caused so much loss and disruption, it’s hard to express my admiration for the way Lenzingers responded.”
Cord Prinzhorn
Chief Executive Officer
There is a human as well as an environmental meaning to sustainability, and it is that sense of the word I wish to address first. In the context of the ongoing COVID-19 pandemic, which has caused so much loss and disruption, it is hard to express adequately the admiration I feel for the way Lenzingers responded. In every location, in every function, in every team, the commitment and resilience shown by our people has been extraordinary. This is a business report so, naturally, you will read about strategic, financial and operational matters. But however impressive the numbers, however efficient the machines, however innovative the processes, it is the resilience and hard work of people – Lenzingers, and others – which results in our performance.
And, as you will see from the stories and numbers presented in this report, that performance has been excellent. This is in no small measure due to the loyalty of our customers. They faced the same challenging context as we did in 2021, yet continued to work with us commercially, in many cases in increasing volumes, and often encouraged and supported our focus on the shift from a linear to a circular economic model. And, as reported last year, we remain strategically on track despite all the challenges of operating during a global pandemic. This is evident throughout our production, brand, technology, community and sustainability work. It’s especially evident in the progress made on our key projects in Brazil and Thailand.
increase in revenue
The construction of such large scale projects in the midst of COVID-19 called for an unparalleled approach towards planning, recruitment, training and safety management. The utmost care was taken not only to safeguard our employees and contractors, but also their families. This was no small task considering the Prachinburi (Thailand) site will be the world’s largest lyocell plant of its kind once production begins. It’s also the first project of this scale that we’ve delivered outside Austria. Moreover, the plant in Brazil is our largest ever investment in the provision of sustainable raw materials for wood-based (cellulosic) fiber production. Both projects have run on time to budget, and both will be operational early 2022, which is an accomplishment we do not take lightly. Despite the challenges that our people faced on site in Brazil and Thailand, they delivered on our strategic vision and promise.
invested in Brazil and Thailand
Our pulp mill in Indianópolis (Brazil) will have a significant impact on the decarbonization of our business.
We continue to benefit from a steadily growing fiber market as people along the entire value chain seek, and adopt, more sustainable solutions. The renewable origin of our products and our dedication to sustainable innovation make us the ‘go-to’ manufacturer for growing numbers of customers and partners. We are very proud of the steady stream of accolades we receive for our environmental credentials. In 2021, these included Platinum status for CSR from EcoVadis; a Sustainability Champion AA rating on the MSCI ESG listing; and a Triple A listing from global environmental non-profit CDP, for leadership in climate change, water security and forests. We are one of just 14 companies world-wide to be awarded a Triple A listing by CDP, but that is not something to celebrate. We want – and expect – many more companies to join us.
These, and other awards, show that Lenzing is a company completely committed to the reduction of our environmental footprint. Our goal of becoming climate-neutral by 2050 requires investment, intelligence and ingenuity, qualities that are woven into the headline events of our 2021 story. For example, our EUR 200 mn investment in Asia which, among other things, includes our Nanjing site that will rely on natural gas rather than coal as a power source. It also puts our Purwakarta facility in Indonesia at the leading edge of reducing CO2 emissions through the use of biogenic fuel. We introduced the first carbon neutral lyocell fiber for the nonwovens industry, with VEOCEL™ Lyocell fibers certified as having a net-zero carbon footprint under the CarbonNeutral Protocol.
We invested more than EUR 23 mn in a state-of-the-art wastewater treatment plant at our site in Grimsby, United Kingdom. We expanded fiber identification technology to TENCEL™ branded fibers as part of an ongoing campaign for greater supply chain transparency. At our Lenzing, Austria site, planning started on Upper Austria’s largest ground-mounted photovoltaic plant, which will generate nearly 5,500 megawatt hours per year. We also built a new air purification and sulfur recovery plant – the result of EUR 40 mn invested since 2019 – which takes us another step closer to meeting our climate targets.
2021 saw the development of exciting new partnerships. For instance, we teamed up with world-class pulp producer Södra to develop more ways of giving waste a new life. Like us, Södra are champions of post-consumer textile recycling, and we are working together to drive change at every stage of the textile value chain. We also began a collaboration with Orange Fiber, an Italian company which has patented the pulp production process for citrus by-products. This allows us to upcycle waste materials in our products, such as creating the first TENCEL™ branded lyocell fiber made of orange pulp and wood sources. Our innovation in sustainability is visible at the end of the product lifecycle, as well as the start. An investigation by scientists at the Scripps Institution of Oceanography in California has provided further evidence of the biodegradability of our fibers. The study showed that clothing made from wood-based fibers biodegraded in sea water within 21 days, compared to clothing from synthetic fibers which showed no biodegradation after more than 210 days.
These and other partnerships Lenzing is building are generating value for the planet while, at the same time, making a positive impact on our commercial results. I am convinced there is a great future to be built on sustainability and the circular economy model for Lenzing as a business. This matters first and foremost because of the contribution it makes to the quality of the natural environment, on which all life depends, as well as the growth and prosperity it offers shareholders, employees and customers. There is so much more I could mention here from the pages of Lenzing’s 2021 calendar, and from our plans for 2022 and beyond. However, now it’s time to hand over to you.
These and other partnerships Lenzing is building are generating value for the planet while, at the same time, making a positive impact on our commercial results. I am convinced there is a great future to be built on sustainability and the circular economy model for Lenzing as a business. This matters first and foremost because of the contribution it makes to the quality of the natural environment, on which all life depends, as well as the growth and prosperity it offers shareholders, employees and customers. There is so much more I could mention here from the pages of Lenzing’s 2021 calendar, and from our plans for 2022 and beyond. However, now it’s time to hand over to you.
Thank you for reading. Stay safe and well, and be sure to visit our main site at Lenzing.com to find out more about us and what we do.
Sincerely yours,
Cord Prinzhorn
Cord Prinzhorn