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Lenzing Plans China Adventure

NEW YORK — Looking to establish a presence in the Chinese textile market, Lenzing AG will build a rayon plant in the rapidly developing nation through a joint venture with Nanjing Chemical Fibre Co.<BR><BR>The plant is set to open during the...

NEW YORK — Looking to establish a presence in the Chinese textile market, Lenzing AG will build a rayon plant in the rapidly developing nation through a joint venture with Nanjing Chemical Fibre Co.

The plant is set to open during the fourth quarter of 2006 near the town of Nanjing in the Jiangsu province. It will be able to churn out about 60,000 tons of rayon staple fibers annually.

Austrian-based Lenzing started a sales company in Shanghai last year. Lenzing is the majority partner in the joint venture and will add its technological expertise to the facility to ensure quality and meet European environmental standards.

NCFC, which is China’s seventh-largest rayon producer, will help ease the plant’s entry into the market and provide infrastructure.

“The availability of Chinese product capacity is another important milestone on the road toward our presence in Chinese and Asian markets,” Thomas Fahnemann, chairman of Lenzing, said in a statement.

The move will help Lenzing save on import duties and bring it closer to its customers in the market, said Fahnemann.

China, with its growing textile business, consumes 800,000 tons of rayon fiber annually and has shown double-digit growth rates over the last five years, said the firm.

The upward trend in consumption can only be expected to continue following the Jan. 1 expiration of the global quota system, which long regulated trade in textiles and other categories.

This story first appeared in the January 18, 2005 issue of WWD.  Subscribe Today.