Austrian Lenzing Group is planning to open a facility to produce Lyocell fibres in Thailand, the company announced on June 29. Plans are to design the plant for a capacity of up to 100,000 tonne of the cotton-like cellulose fibres annually. For this purpose, Lenzing is establishing a subsidiary in Thailand and purchasing a commercial property in an industrial park in Prachinburi East of Bangkok. In the coming months, the required permits and licenses, as well as technical planning, will be finalised, the company statement said, adding that “a definitive decision on constructing the new production plant will be made in the first quarter of 2018,, and, in this case, completion is scheduled for the end of 2020. The company’s board of Directors already approved the project, Lenzing Group stated.

In particular, the factory will produce Tencel fibres, an environmentally friendly botanic fabric regenerated from wood cellulose and a Lenzing trademark. It is used in textile production throughout Asia, for example by the world’s largest fashion company Inditex (known for its label Zara), as well as by jeans maker Levi Strauss. For Lenzing Group CEO Stefan Doboczky, choosing Thailand’s Eastern Seaboard to set up a production facility was a “logical next step” to provide fabric to the many textile and garment producers within ASEAN, such as Cambodia, Vietnam and Indonesia, as well as in China. Furthermore, Prachinburi provided good infrastructure, room for expansion and energy supply from renewable sources, he added.

The company will invest around $500 mnin the facility, Doboczky noted. “The expansion to Thailand represents the next consistent step in the implementation of our strategy of increasing the share of speciality fibres and expanding our geographical footprint. With Asia accounting for 70 per cent of total Lenzing Group revenue, it is logical that we will construct the next production plant for Tencel fibres in Asia,” he said.