Lenzing Cranks up Fourth Line at South Pacific Viscose in Indonesia

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Lenzing AG, Lenzing, Austria, reports that its subsidiary PT. South Pacific Viscose (SPV) has officially started up its fourth production line at Purwakarta, Indonesia. At a cost of about $150 million, the new production line is the Group's biggest individual investment project in recent years. Its nominal production capacity of 60,000 metric tpy of viscose fibers for textile and nonwovens applications raises SPV's total annual capacity to 220,000 metric tpy and makes it Asia's biggest viscose fiber production site and the world's second-biggest producer, after the parent plant at Lenzing with 255,000 metric tpy of capacity.

Peter Untersperger, chairman of the Lenzing management board, notes that "Indonesia and the whole of Asia are Lenzing's single most important sales market. The extension of PT. South Pacific Viscose is another milestone for the Lenzing Group. It again marks our commitment to our customers in this part of the world. And it is, moreover, an essential part of our corporate strategy. With the completion of all current investment projects in 2012, about half of the Group's fiber production capacity of then 378,000 metric tons will be located in Asia. It is our goal to reach the million-ton production mark by successive expansion steps and more than half of our total cellulose fiber production will then be generated in Asia."

The new jumbo line took two years to complete and required the extension of existing industrial infrastructure, including a state-of-the-art 21 MW power station with multi-fuel fluidized boiler and attached steam turbine, a sulfuric acid plant with a daily capacity of 300 metric tons, a CS2 recovery plant, as well as process and waste water facilities. SPV consequently conforms to the latest environmental standards.

All in all, a total of about $500 million was invested in SPV. A debottlenecking program will be started along with the regular operation of line four to raise total production capacity by another 18,000 metric tons to 238,000 metric tpy.

Lenzing has been involved in SPV since 1983 and has been holding the industrial management since the start of production. The company raised its initial minority interest in successive steps to currently 90.56%. The remainder is being held by Indonesian shareholders.

Production capacity has been increased more than tenfold in successive stages from initially 20,000 metric tpy. SPV is an important supplier to the Indonesian textile industry, one of the biggest industrial segment of Indonesia. The site's staff of 1,656 makes the company one of the biggest employers in the region and a major contributor to its rise over the past 30 years.