The Lenzing Group, market leader in cellulose fibres, is to invest in further capacity expansion and modification of its sites in Lenzing (Austria) and Nanjing (China).

The production capacity of the Nanjing site will be more than doubled to 140,000 tons per year with an investment of 55 million Euros over an 18 month to two year period and the Lenzing site will switch production from standard viscose fibres to modal fibres within the next fifteen months at an investment of 23 million Euros.

Peter Untersperger, Chairman of the Lenzing management board, commented on the company’s latest decisions: “The investment is a continuation of our consistent expansion policy. The value of the Lenzing site as the world's biggest producer of special cellulose fibres will grow and the doubled capacity at the Nanjing site will meet the fast-growing demand for standard cellulose fibres in Asia.”

The new program complements Lenzing’s current fibre capacity expansion program with a total investment of 120 million Euros, launched in December 2009. The expansion in China and the full operation and subsequent debottlenecking of the fourth line at the Indonesian subsidiary PT. South Pacific Viscose (SPV) scheduled for May 2010 will raise the Asian production capacity of the Lenzing Group to 378,000 tons per year, equivalent to half of Lenzing's global fibre production capacity. As a consequence the new investment program will increase Lenzing fibre production to about 770,000 tons per year. A further viscose fibre production site is being planned in India.

Lenzing says there are numerous reasons for expanding modal capacity and downsizing viscose capacity at the Lenzing site. Friedrich Weninger, management board member for the fibre business says: “Modal has very much turned out to be a global export success over the past years, particularly in Asia. The project will develop and secure our special fibre strategy for the Lenzing site. Integrated pulp production there enables optimized and decisive control of the production quality parameters from beech to fibre required for special fibres and the site's expertise in modal production spans decades. In additon, remodelling will be comparatively fast and cost-efficient.”