Lenzing AG has begun construction on a production facility that will manufacture 67,000 tons a year of the specialty fiber Tencel near its headquarters at its namesake town in Upper Austria.

This story first appeared in the July 3, 2012 issue of WWD. Subscribe Today.

Lenzing said it will invest about 130 million euros, or $164 million at current exchange, in the new factory, making it one of the largest individual industrial investments in Austria currently. The project will be accompanied by considerable infrastructure investments and once put into operation, the Tencel plant will generate 110 “highly qualified jobs in Lenzing in the long term, as well as a large number of other jobs in the region,” the company said.

The company said Monday that it had been granted a legally binding building permit by the Office of the Provincial Government of Upper Austria following successful completion of an environmental impact assessment process.

“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,” said Friedrich Weninger, a member of the management board of the Lenzing Group and chief operating officer responsible for the fiber business. “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.”

The new Tencel facility is of major strategic importance to the Lenzing site because it brings it together with production of Lenzing Modal and Lenzing FR, expanding the location’s position as the main specialty fiber production site for the Lenzing Group, the company said. 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, the firm added.

Tencel fibers are used in the textile industry and for nonwovens, from women’s outerwear and activewear to home textiles such as quilts and bed linen, and cosmetics, hygiene and medical products. The fibers are already being manufactured at plants in Heiligenkreuz, Austria; Grimsby, England, and Mobile, Ala. The Mobile site is also undergoing an expansion to increase its production capacity, bringing the current nominal production capacity of Tencel to 150,000 tons a year.

Lenzing specializes in man-made cellulose fibers from classic viscose to modal and lyocell fibers and has been recognized for its sustainable management and environmental processes. It had sales last year of 2.14 billion euros, or $2.69 billion, producing 705,100 tons of fiber and employing 6,593 worldwide.

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