Mobile – Lenzing has postponed the expansion of its lyocell facility in Mobile, Alabama due to the likelihood of new trade tariffs together with higher construction costs which it says have increased the ‘risk profile’ of the project.
Instead, Lenzing says it will devote resources to the expansion of its lyocell project in Thailand and confirms that although it remains committed to the continued expansion of its specialty Tencel ‘Luxe’ filament and ‘Ecovera’ traceable viscose as part of its ‘sCore’ environmental strategy – the decision would slow down the implementation of its speciality lyocell growth.
Lenzing has said it will temporarily mothball its lyocell expansion project in Mobile, Alabama due to ‘trade tensions’ between the US and other major economic regions coupled with a buoyant US labour market, which it says elevate the overall financial risk of the project due to higher construction costs.
“Lenzing will reassess this decision on a regular basis but no substantial additional lyocell volumes, over and above the successful 25,000 tons expansion in Heiligenkreuz (Austria), will be added to the market in 2019 and 2020 by Lenzing,” said the company.
However, Lenzing did say it would put all its effort to ‘readjust’ the execution of its growth plan to meet strong market demand of its lyocell fibres. “This includes an increased focus on the lyocell expansion project in Prachinburi (Thailand),” it said
The company will reassess this decision on an ongoing basis and states that it’s still fully committed to implement its ‘sCore TEN’ strategy and remains on track for the specialty expansions such as Tencel Luxe filaments and its Ecovero traceable viscose, but noted that the postponement of its Alabama expansion would also “slow down the implementation of its lyocell specialty staple fibre growth.”