The first nine months of 2012 were characterized by full capacity utilization of all production facilities in Lenzing’s Segment Fibers and a new record level of fiber shipment volumes, but also declining fiber selling prices in the course of the year. Segment sales in the first three quarters of 2012 amounted to EUR 1,414.3 mn (Q1-3 2011: EUR 1,436.1 mn). Segment EBITDA totaled EUR 262.1 mn (Q1-3 2011: EUR 345.0 mn), whereas the segment’s EBIT amounted to EUR 187.3 mn (Q1-3 2011: EUR 275.9 mn). Specialty fibers accounted for 35.4% of segment sales. The average fiber selling prices in the first three quarters of 2012 equaled EUR 2.00 per kilogram, down from EUR 2.25 per kilogram in the prior-year period. In the third quarter of 2012 the average fiber selling prices equaled EUR 1.95 per kilogram, compared to EUR 2.04 per kilogram in the second quarter of 2012, and was accordingly at the lower end of our price guidance (EUR 1.95-2.00). The underlying reason for the price decline was the under-utilization of production plants operated by many cellulose fiber manufacturers in Asia, as well as the lower cotton price compared to the previous year.
The two business units, Textile Fibers and Nonwoven Fibers, performed well in a weak market environment, with total fiber sales of 589,304 tons, a new all-time
high level (Q1-3 2011: 524,173 tons). In the third quarter, sales amounted to 199,000 tons of cellulose fibers, also reaching the sales target (Q3 guidance of about 200,000 tons) in spite of the difficult market conditions. However, the decrease in the spot market prices for viscose fibers in China at the end of the third quarter led to a corresponding drop in the selling prices for standard viscose fibers in the Business Unit Textile Fibers. Selling prices for the specialty fibers Lenzing Modal® and TENCEL® were also not immune to the overall market trend prevailing as of the middle of the year. Nevertheless, they continued to be sold at an attractive price premium compared to
standard viscose fibers.
The sales volumes achieved by the Business Unit Nonwoven Fibers were gratifying. However, the generally low average fiber price level was also perceptible in the nonwovens market. Lenzing succeeded in further consolidating its dominant market position for wipes. Demand for TENCEL® fibers in the nonwovens segment remains strong, particularly in the USA. In September, the Business Unit Nonwoven Fibers introduced its new fiber TENCEL® Biosoft, the first hydrophobic and fully biologically degradable fiber to the Man-Made Fibers Congress held in Dornbirn, Austria. The substantial advantages of this product for wipes and hygiene products aroused considerable interest in the industry, which had previously relied on synthetic products for moisture-resistant fibers. Thus Lenzing has developed a natural and sustainable replacement for polyester based on a renewable raw material enabling, for example, feminine hygiene products to be produced using 100% TENCEL®.
From Lenzing Q3 Report 2012