The Lenzing Group will be implementing cost reduction measures

Lenzing to implement cost reduction measures

10:44 AM, 30th May 2014
The Lenzing Group business news

LENZING, AUSTRIA: The Lenzing Group will be implementing additional cost reduction measures, due to the very unsatisfactory development of prices on the global market for viscose fibers. The Management Board informed employees at the facilities in Lenzing about the necessity of further measures to secure the long-term competitiveness of the Lenzing Group. In relation to this, the Management Board announced a wide-ranging review of the Group strategy, the results of which should be available by the end of 2014.

As noted in the report on first quarter of 2014, extensive measures were already successfully implemented within the framework of the cost optimization programme “excelLENZ 2.0.” With this program, it was possible to prevent layoffs in Lenzing, despite the staff reduction measures already carried out. Nevertheless, in light of the current level of fiber prices, the savings of more than €60 - 80 million for 2014 are still not enough to ensure the long-term profitability of cellulose fibers production at the European facilities. The targeted cost reductions of up to €160 million by 2016 must also be increased due to the market development.

“In light of the structural changes in competitive conditions, our goal is to lead the Lenzing Group back to its previous competitiveness. Further cost optimization is an inevitable part, but – within the framework of strategic restructuring – we will also decide to which products we can manufacture over the long run at which sites with the highest levels of quality and at optimized costs. There can be no taboos. Everything must be looked at,” said Peter Untersperger, CEO, Lenzing.

 

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