en.Wedoany.com Reported - Austrian fiber manufacturer Lenzing AG has announced plans to gradually cease production at its fiber plant in Heiligenkreuz, Austria, by the end of 2026, and to close its Grimsby, UK, plant by the end of 2027. This optimization of its production footprint is part of the company's new strategy, "Grow Nonwovens, Reset Textiles," which aims to grow its nonwovens business, reset its textiles business, and further strengthen its pulp division.
Lenzing stated that this transformation will strengthen selected core production sites, including its flagship plant in Lenzing, Austria, while ensuring a stable and reliable supply for customers. In parallel with the plant closures, the company is evaluating strategic options for the affected plants, including potential divestments or other value-preserving alternatives. Should no viable outcome be achieved, a structured and orderly wind-down will be implemented, with a focus on safety, supply reliability, customer continuity, and social and environmental responsibility.
Chief Executive Officer Georg Kasperkovitz stated that with "Grow Nonwovens, Reset Textiles," Lenzing is decisively repositioning the company for long-term success in a changing market environment. By integrating a streamlined premium product portfolio, enhancing competitiveness, and leveraging a strong proprietary innovation pipeline, the company is laying the foundation for profitable growth and a more focused, resilient Lenzing. He added that this transformation will strengthen the main Lenzing production site in Austria and support its path toward sustainable profitability and a competitive future.
The strategy aims to improve competitiveness, profitability, and return on invested capital amid changing market conditions for man-made cellulosic fibers. While reshaping its textiles business, Lenzing plans to place greater focus on nonwovens applications, supported by its proprietary technologies, including TreeToTextile, LENZING™ nonwovens technology, and advanced filament solutions. As part of the strategy, Lenzing also plans to achieve significant organic growth in its nonwovens business by 2030.
The company has committed to investing €23 million ($26 million) to expand nonwovens capacity at its Austrian plant and to upgrade its production facility in Mobile, Alabama, into a specialty nonwovens site. In the textiles segment, the company will focus on differentiated premium segments and strategic customer partnerships, while continuing to reduce its exposure to commodity textile products such as standard viscose.
The transformation also includes an enhanced performance program targeting savings of €120 million by the end of 2027 compared to actual 2025 costs, including the previously announced €45 million in personnel cost savings. Lenzing stated that the program is expected to deliver an EBITDA uplift of approximately €150 million, with a medium-term EBITDA margin target of 20–25% and a leverage ratio below 2.5x.
Lenzing's global workforce is expected to be significantly reduced from approximately 8,100 employees (7,700 full-time equivalents) at the end of 2025 by the end of 2027. The reductions will primarily affect employees at the Heiligenkreuz, Grimsby, and Purwakarta, Indonesia, plants, as well as the previously announced group-wide reduction of 600 positions in sales, general, and administrative (SG&A) functions. For affected employees in Heiligenkreuz, the existing social plan applies, while in Grimsby, discussions on support measures will be held with employee representatives and stakeholders. Employee-related efficiency measures for the Indonesian operations are planned for the third quarter of 2026.
Kasperkovitz acknowledged the impact on employees and stated that he fully understands that the gradual wind-down is a difficult but necessary decision. He emphasized that taking responsibility for employees is of utmost importance, and constructive discussions are currently underway with employee representatives regarding the existing social plans and necessary measures under applicable local frameworks. To support the transformation, Lenzing plans to strengthen its financial structure through a capital increase of up to €300 million (subject to shareholder approval), new financing agreements of up to €300 million, and an extension of existing debt maturities to 2030. The company stated that this refinancing package will provide the financial flexibility needed to execute its strategy while strengthening its long-term financial position.
