EANS-Adhoc: Lenzing AG / Lenzing sets the course for future dynamic expansion of fiber production capacity

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Company Information

13.12.2010

The Lenzing Group, a world market leader in man-made cellulose
fibers, sets the course for the future dynamic expansion of its fiber
production capacity. The recently agreed expansion program includes
the construction of the first industrial-scale production plant for
TENCEL® fibers at the site in Lenzing/Upper Austria, the construction
of a fifth viscose production line at its Indonesian subsidiary PT.
South Pacific Viscose (SPV), as well as further capacity expansion
measures. These new expansion projects, in addition to those already
in progress, are expected to increase the Lenzing Group´s annual
fiber production capacity of currently nearly 700,000 metric tons by
approximately 25%. This would be a significant milestone in reaching
the strategic target of a production capacity of one million metric
tons of fibers by 2014. The total investment volume amounts to
approximately EUR 285 million.

Lenzing's CEO, Peter Untersperger, explains these latest decisions:
"This expansion program responds to the dynamic demand development
for man-made cellulosic fibers and is intended to further secure our
leading world market position. The structural changes in the global
textile fiber market, which are characterized by a tendency towards
rising cotton price levels and an ever-increasing volatility of
cotton quantities, as well as the increasing demand for man-made
cellulosic fibers in nonwovens, lead us to continue to expect strong
demand for Lenzing fibers over the next years. Moreover, the capacity
expansion program is intended to further secure our leading position
in the industry with respect to cost efficiency and market position."

First industrial-scale production site for TENCEL® fibers at the
Lenzing site in Upper Austria The decision to construct the first
production plant for TENCEL® at the facility in Lenzing/Upper Austria
represents a milestone for this site. The total investment will
amount to approximately EUR 130 million, with a planned annual
production capacity of approximately 60,000 metric tons. The plant
will be the world's first fully backwards integrated production site
for TENCEL® fibers, as it can be directly supplied with pulp from the
fully integrated pulp mill at the Lenzing site. The regulatory
approval procedures for the industrial-scale plant are expected to be
initiated shortly. TENCEL®, a high-grade specialty fiber, is used for
textiles as well as for nonwovens. The Lenzing Group is the world's
only industrial producer of TENCEL®.

The new investment program also includes the expansion of the TENCEL®
production site in Mobile/Alabama (USA). A total investment of almost
USD 30 million is expected to increase the site's annual production
capacity to approximately 50,000 metric tons. A production line that
was decommissioned by the site's previous owner will be modernized
and upgraded to meet the strong demand for TENCEL® fibers from the
nonwovens sector (wipes, baby care products) in North and South
America.

Fifth production line at SPV and expansion in Nanjing In response to
strong demand for Lenzing viscose fibers in Asia, Lenzing is planning
to increase capacity at its sites in Purwakarta/Indonesia (SPV) and
Nanjing/China. Lenzing will construct a fifth production line with a
total investment of approximately USD 130 million at SPV. It will be
designed as a "jumbo line" with a planned annual production capacity
of 80,000 metric tons, which is expected to increase SPV's total
capacity to 325,000 metric tons by 2013. The additional quantities
are expected to be mainly sold in the fast-growing Indonesian
domestic market.

At Lenzing´s site in Nanjing/ China, a second production line is
currently under construction, which is scheduled to almost double
current production capacity to 140,000 metric tons by mid-2011.
Lenzing has now decided to increase production capacity of this
site's second line to 160,000 metric tons immediately after start-up,
with a total investment of approximately USD 18 million. The
additional capacity is expected to be available from 2012 onwards.

Moreover, production capacity for specialty nonwovens fibers will be
expanded at the Lenzing site. An existing line will be upgraded at a
total investment of approximately EUR 17 million. This expansion
measure is in response to strong demand for Lenzing's nonwoven
fibers. This project is scheduled to be completed by mid-2012.

end of announcement euro adhoc
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ots Originaltext: Lenzing AG
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:

Lenzing AG

Mag. Angelika Guldt

Tel.: +43 (0) 7672-701-2713

Fax: +43 (0) 07672-918-2713

mailto:a.guldt@lenzing.com

Branche: Chemicals
ISIN: AT0000644505
WKN: 852927
Index: WBI
Börsen: Berlin / free trade
Wien / official market