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Lenzing Group continues massive expansion of its production capacities

Within the next two years viscose fiber production capacity will be increased by 65,000 tons from currently 155,000 tons to 220,000 tons per year by the construction of a fourth production line, improvements in infrastructure and by debottlenecking. Total investment is budgeted at EUR 106 mill. Lenzing will also invest an additional EUR 45 mill. to increase capacity at the largest production site in Lenzing (Austria) from the current level of 235,000 tons annually to 250,000 tons in the future.

"The demand for Lenzing fibers, particularly in Asia, has recently been very positive. In the medium term we view the continuing economic growth of the region, the rise in prosperity and its growing population as indicators of very good market opportunities" reasons Thomas Fahnemann, chairman of the Lenzing management board. Cellulose fibers manufactured by the Lenzing Group increasingly demonstrate their advantages in the competitive field of the fiber industry: They are made from the sustainable resources wood and pulp and their ecologically friendly carbon foot-print is increasingly appreciated by customers in Asia as well. High comfort of wear makes cellulose fibers the indispensable component for the growth sector function wear. Rapidly rising living standards and the expanding health and hygiene infrastructure in the emerging markets also lead to a significant rise in the demand for cellulose nonwoven fibers.

"Asia is and will remain the most important growth market for our products" says Thomas Fahnemann. The start-up of viscose fiber production in Nanjing (China) in 2007, the production site in Indonesia and the high export volumes of specialty fibers from Austria to Asia make Lenzing one of the major suppliers in this region. "With continuing good market conditions the further expansion of our Asian production capacity, especially in China, is a conceivable option" Thomas Fahnemann adds.

Seventy percent of the total investment now allocated to SPV will go to the new production line and the remainder to the expansion of infrastructure and the optimization of existing facilities. The project will also make an important contribution to internal raw material supply at high environmental standards.

The future launch of the new production line in Indonesia, together with the planned expansion project at the TENCEL® production site Heiligenkreuz (Austria), which was approved earlier in 2007, and the increased capacity at the plant in Lenzing will push up the nominal capacity of the Lenzing Group from currently 560,000 tons of cellulose fibers to 660,000 tons per year. Lenzing operates six cellulose fiber production sites globally, a further site in India is in the planning stage.

Further inquiries:

Angelika Guldt
Corporate Communications
Phone: +43 (0)7672 701-2713
e-mail: a.guldt@lenzing.com