Lenzing, the Austrian leader in wood-based specialty fibers, has taken another step toward reinforcing its commitment to Earth-friendly energy sources by investing in a new wind farm.
The alliance with Austrian electricity producer WLK energy is for the purchase of approximately 13 megawatts of wind power over a 15-year contract that begins in 2025. The new wind farm in Engelhartstetten represents the Tencel maker’s long-term investment in a price-stable and diversified power supply.
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Based in Untersiebenbrunn (Lower Austria), WLK energy is one partner in the new wind farm, which will operate 11 turbines and produce 45 megawatts. Lenzing’s share of about 13 megawatts is roughly equal to the annual consumption of some 10,000 Austrian households. Groundbreaking took place Nov. 9.
Christian Skilich, Lenzing Group board member, noted how the new collaboration represents a significant contribution to Lenzing’s eventual decarbonization.
“The generation of renewable electrical energy from wind and solar power and from biomass is a cornerstone of our corporate strategy and the basis for long-term commercial success,” he said. “Together with our strong partners, we are also positioning ourselves even more independently of the global energy market and thus gain more planning security.”
In 2019, Lenzing was the first fiber manufacturer to set itself the goal of reducing its CO2 emissions by 50 percent by 2030 and becoming carbon-neutral by 2050. In 2022, Lenzing opened Upper Austria’s largest open-space photovoltaic plant in partnership with Verbund, Austria’s leading energy company and one of Europe’s largest producers of hydropower, and signed an electricity supply contract for photovoltaic energy with the green electricity producer Enery and Energie Steiermark. Earlier this year it announced the launch of a major industry development, a pioneering real-time ocean shipment tracker which improves the visibility of carbon emissions among partners.
Lenzing’s renewable energy announcement comes after the company on Nov. 3 said it’s working to revive cash flow, sales and margins to deal with ongoing higher raw material and energy costs and sluggish demand. The 1.87 billion euros ($2 billion) in revenue it reported for 2023’s first three quarters marks a 5.3 percent decline from a year earlier, signaling that the macro environment has yet to improve.
“The recovery that has been expected for the second half of the year in the markets relevant that are for us has so far failed to materialize,” said Stephan Sielaff, Lenzing Group CEO. “As a consequence, the measures we took at an early stage have proved all the more correct. We already launched an ambitious cost-cutting program at the end of 2022, which has delivered the expected results ahead of schedule.
“Building on this, we are currently implementing a holistic performance program with a focus on measures to boost profitability and cash flow generation as well as to leverage growth potential in the fiber markets through targeted sales activities,” he added.
Lenzing’s board expects the new performance improvement program will generate 100 million euros ($107 million) in savings, half of which should come in the next fiscal year. The company plans to eliminate “around” 500 full-time roles and save 30 million euros ($32 million) in the process. It will do this by cutting staff and opting not to backfill positions left vacant when employees leave or retire.
