By  on May 26, 1994

LONDON -- Courtaulds PLC continues to turn up the volume on Tencel, the cellulosic fiber it introduced commercially nearly two years ago.

The latest move is a plan to build a $130 million Tencel plant in Europe within two years in order to increase the company's worldwide capacity of the fiber to 150 million pounds.

Sipko Huismans, chief executive, said Wednesday the group has identified four potential sites for the first full-scale Tencel facility in Europe: two in the U.K. -- at Grimsby, which currently has a pilot Tencel plant, and Derby -- Spain and Germany.

Huismans said he expects to select the site by the end of this year, which would enable the European plant to come onstream by the end of 1996.

With the opening of the European plant, Huismans predicted that sales of the fiber could be $375 million to $400 million by the end of 1996.

By that time, Huismans added, Courtaulds probably will have authorized the investment for the first Tencel plant in the Far East, either a full-scale plant in China or a smaller facility in another Asian country that would operate until the company believes the infrastructure in China could support a larger factory.

Courtaulds has already established a major Tencel presence in the U.S., through its Courtaulds Fibers operation. Courtaulds Fibers currently produces Tencel at a $90 million plant in Mobile, Ala., that was opened in July 1992 and has a capacity of about 40 million pounds.

Last November, Courtaulds announced plans to invest $134 million in expanding the plant to increase Tencel production to 100 million pounds. The expansion, which began in January, should be completed by the end of August 1995.

Sales of Tencel last year, the Mobile plant's first full year of operation, were $120 million to $150 million, Huismans said. Gordon Campbell, Courtaulds's director for fibers and chemicals, said Tencel sales are equally split among the U.S., Europe and the Far East and are concentrated in the higher-priced end of the apparel market.

"Our target is to get to about 300 million pounds a year early in the next decade, with 100 million pounds each from the U.S., the Far East and Europe," Huismans said.

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