It was developed in Courtaulds Research in Coventry UK in the 1980's as a non-polluting route to the fibres which were expected to become increasingly important as the land used to grow cotton was switched to food production and the cheap oil for synthetic fibres ran out.
The 1990's scale-up to multi-factory production probably occurred a decade too soon, Courtaulds being unable to sustain the investment when the market for the fibre took longer to develop than the Stock Market expected.
Akzo Nobel bought Courtaulds in 1998 forming Acordis Fibres which they later sold to Private Equity in 1999 (CVC Partners). When the EU forbade CVC's attempt also to buy the Austrian cellulosics company Lenzing (2001), they broke up Acordis and regained their investment by selling Tencel Ltd to Lenzing (2004).
* "tencel" was originally chosen as the generic name for solvent-spun rayon and used as such until the US FTC decided it was too closely associated with Courtaulds PLC to be acceptable. Lyocell then became the generic name and Tencel became the brand name for Courtaulds lyocell fibre and the name of the Courtaulds Division producing it.
Since 2004, "Tencel" has been a Lenzing AG registered Trade Mark.