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Lenzing Adds Pulp To Its Coffers

April 6, 2010

Acquisition of Biocel extends fiber capabilities

Lenzing has acquired a 75% share in Czech pulp producer Biocel Paskov A.S. The seller, Austria’s Heinzel Holding, will keep a 25% share in the company and manage paper pulp distribution. Biocel’s paper pulp production capacity is currently 280,000 tons per year and Lenzing intends to invest €50 million in capacity expansion as well as in measures to increase energy efficiency and recovery systems.

“The acquisition of Biocel is an important strategic step towards the Group's long-term extension of its vertical backwards integration,” said Peter Untersperger, chairman of the Lenzing management board. “The expansion and restructuring of the site into a swing capacity producer of pulp will enable us to flexibly adjust to given pulp market situations and to either produce dissolving pulp for our fiber production or paper pulp for external customers. The acquisition is part of a hedging strategy to protect Lenzing from the impact of high pulp price volatility.“

Although its primary business is cellulosic fibers, Lenzing has struck several deals in recent months to diversify its fibers portfolio These include a partnership with Litrax to make hybrid cellulose/bamboo fibers and a memorandum of understanding to develop and commercialize regenerated fibers with a company called Circle. Additionally, the company continues to expand its cellulose capacity with investments in China and Indonesia.

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