EANS-News: Lenzing AG / Lenzing Site: Construction Start of the New TENCEL® Production Facility

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Company Information

Lenzing (euro adhoc) - - Investments of EUR 130 mn in Upper Austria
- Expected completion in about 24 months
- 110 new jobs

Following the successful completion of the environmental impact
assessment process for the new TENCEL® production plant in
Lenzing/Upper Austria nine months after the formal filing of the
project, Lenzing AG was formally granted a legally binding building
permit by the Office of the Provincial Government of Upper Austria.
Construction work has now commenced on the new production facility
which will manufacture 67,000 tons p.a. of the specialty fiber
TENCEL® in Upper Austria in the future. Construction time has been
calculated at 24 months.

Lenzing AG will invest approximately EUR 130 mn in the new factory,
making it one of the largest individual industrial investments in
Austria at the present time. This project will be accompanied by
considerable infrastructure investments. Moreover, once it is put
into operation the TENCEL® production plant will generate 110
additional highly qualified jobs in Lenzing in the long term, as well
as a large number of other jobs in the region. The planning and
construction of the facility also leads to a corresponding value
creation.

Specialty fiber site in Lenzing "With the TENCEL® plant the fiber
technology of the future and the latest generation of man-made
cellulose fibers is returning to our corporate headquarters in
Lenzing. The Lenzing pilot plant was the place where 20 years ago the
first marketable lyocell fibers in the history of the Lenzing Group
were produced. They are now marketed around the world under the
TENCEL® brand name", says a pleased Friedrich Weninger, Member of the
Management Board of the Lenzing Group and Chief Operating Officer
responsible for the fiber business.

The new TENCEL® facility is of major strategic importance to the
Lenzing site due to the fact that TENCEL® will also be produced on
the premises in addition to the specialty fibers Lenzing Modal® and
Lenzing FR®. Thus the facility in Lenzing will further expand its
position as the main specialty fiber production site for the Lenzing
Group. The geographical proximity to the European growth market for
TENCEL®, the attractive energy costs as a consequence of the
company's own on-site power generation capabilities as well as the
availability of a sufficient pool of qualified personnel and the
closeness to the TENCEL® pilot plant were the main reasons underlying
the decision to locate the new plant in Upper Austria.

TENCEL®: The fiber of the future TENCEL® fibers are used in the
textile industry and for nonwovens. The production process is
particularly environmentally compatible, and is characterized by the
practically complete closed cycle of the solvent in use. Lenzing
continues to be the only industrial-scale supplier of TENCEL®. The
fibers are already being manufactured at the plants in
Heiligenkreuz/Burgenland, Grimsby/U.K. and in Mobile/Alabama/USA.
However, up to the present time production lines with an annual
capacity of not more than 20,000 tons have been used. The current
nominal production capacity of TENCEL® in the Lenzing Group totals
approximately 140,000 tons p.a., which will be increased to 150,000
tons p.a. thanks to the expansion program now being implemented at
the Mobile/Alabama site.

New applications are continually being developed. The optimal
moisture management of the TENCEL® fibers makes it attractive for use
in high quality home textiles such as quilts and bed linen, but also
in ladies' outerwear and activewear. TENCEL® is also designed for
sensitive segments such as cosmetics, hygiene and medicine, for
example in wound dressings and baby wipes. TENCEL® is even used in
the technical segment, for example to enhance the strength of
plastics or to manufacture electro-technical components. The latest
technical application is TENCEL® powder. It is deployed as a moisture
regulator in foam mattresses and as additives to building materials,
amongst other uses.

Further inquiry note:
Lenzing AG
Mag. Angelika Guldt
Tel.: +43 (0) 7672-701-2713
Fax: +43 (0) 7672-918-2713
mailto:a.guldt@lenzing.com

end of announcement euro adhoc
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company: Lenzing AG

A-A-4860 Lenzing
phone: +43 7672-701-0
FAX: +43 7672-96301
mail: a.guldt@lenzing.com
WWW: http://www.lenzing.com
sector: Chemicals
ISIN: AT0000644505
indexes: WBI, ATX, Prime Market
stockmarkets: free trade: Berlin, official market: Wien
language: English