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The Lenzing Group produces some of the world’s most innovative and sustainable man-made cellulose fibres used in everything from clothing and bedding to car seats and hygiene products.
Its products, which consumers would recognize as lyocell, modal and viscose, are not only good for the planet because they’re made from replenishable raw materials, but also claim to be softer, cooler and perform better in a workout than rivals such as cotton and polyester.
For textile manufacturers and clothing brands it sounds like an easy sell.
However, Lenzing and other man-made cellulose fibre makers continue to lag in global market share of fibre, at about 7%. That’s behind oil-based synthetic fibres used in polyester at 63%, or cellulosic fibres, which consist of cotton, at about 29%, and wool at just over 1% according to Lenzing.
The market for man-made cellulose fibres is poised to grow, as new uses for the material continue to evolve, but its higher price point remains a hurdle.
Thomas Riegler, Lenzing’s Chief Financial Officer, says its customers are often more focussed on price than quality. That leaves Lenzing with little choice but to reduce its operating costs, while at the same time promoting the merits of its materials as being worth the premium.
“We have a pull and push activity,” says Riegler. “We are not only selling advantages of our products to our direct customer, the spinner, but also the end consumer, to convince them about the functionality of the fibre … This is actually our challenge; to bring this message across.”
Lenzing began aggressively marketing its specialty fibres last year, particularly around its TENCEL® brand, which is the lyocell fibre.
The company is now the world’s leading producer of man-made cellulose fibres with a 21% market share in 2014. About two-thirds of its sales (63%) were to Asia, a share the company forecasts will grow to 70% by 2020.
Riegler says the company’s focus is on TENCEL®, which it describes as the most sustainable and versatile fibre with a broad range of applications in everything from clothing to medical and hygiene applications. It also invests heavily in research and development, and owns about 1,500 patent applications and granted patents in 63 countries, alongside more than 1,680 trademark applications and trademarks in 93 countries.
“All of our innovations have to do with sustainability and functionality, and giving sector specific applications,” says Riegler, citing other examples such as materials in shoes and biodegradable food packaging.
Lenzing also markets its products as more sustainable because they are made entirely from wood, a renewable resource, and in a zero-waster manufacturing process. That compares to clothing made from polyester, which requires oil, and cotton, which is produced using a lot of water and chemicals.
“Each strategic decision we make has a clear decision criteria of sustainability,” says Riegler. That’s even if it’s not the best return on investment.
“This is our advantage and differentiation,” he says. “Sustainability is our No. 1 priority.”