LENZING: weak fibre prices prompt greater efforts to cut costs
REACTING to the continued weakening of the average world price for viscose fibres, Lenzing is placing even greater emphasis on its efforts to lower costs. This year, it expects to cut its costs by EUR 90m, one third more than originally budgeted. The announcement was made as the company revealed that its first half consolidated sales had declined by 4.3 per cent in like-for-like terms against the same period a year earlier, to EUR 900m. This was despite operating at full capacity to achieve record shipments in volume terms and caused EBIT to decline by 56.1 per cent to EUR 32.4m.
With world cotton prices promising to remain weak in months to come, prices for standard viscose are unlikely to improve soon. This situation underlines the importance of the new Tencel jumbo production unit reported upon here last week.