euro adhoc: Lenzing AG / Joint Ventures/Cooperation/Collaboration / Lenzing Group: Decision for a new viscose fiber production plant in India

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Global Expansion

18.04.2007

Lenzing Group
Decision for a new
viscose fiber production plant in India

The Lenzing Group will build a new viscose fiber production plant in
India in cooperation with the Indian Modi Group. This decision was
announced by the chairman of Lenzing's management board, Thomas
Fahnemann, and the chairman of the Modi Group, Satish Modi, at the
signing of the cooperation agreement in Vienna.

Production capacity for textile and nonwovens viscose fibers of the
first construction phase of the new Lenzing plant will be 80,000
tons. The preliminary budget for investment, including working
capital, is at 200 million US dollars. The new plant with a staff of
700 to 800 will be located in an industrial park in Maharashtra State
about 45 miles south of Mumbai. Production is scheduled to start for
2010/11, after a construction period of two years.

Thomas Fahnemann comments the decision: "After the successful startup
of our plant at Nanjing/China, this is the next logical step of our
expansion focusing on Asia." India is seen as the second important
market for viscose fibers after China. Lenzing is currently
represented in India by a branch office, but Lenzing customers have
to pay high import duty on Lenzing fibers. "It was above all the
strong demand from Indian customers that facilitated our decision to
produce fibers locally in India", says Thomas Fahnemann.

Lenzing's partner is the Modi Group, one of India's most successful
conglomerates, with an annual turnover of about 1.2 billion US
dollars. "We are happy to have found in Lenzing, the technological
leader in viscose fiber production, our long-term partner for the
Indian textile and nonwovens industry", emphasized Satish Modi at the
signing.

The Indian viscose fiber market is currently supplied by a single
local producer, a situation that is not conducive to the development
of the industry. "With Lenzing we expect a substantial improvement in
the supply situation of the rapidly expanding Indian textile and
nonwovens industry with high-quality fibers. The Indian industry will
greatly benefit from this project.", says Satish Modi.

Moreover, Lenzing will open its global distribution network to Indian
customers and provide them with technical support and expertise.

Lenzing will hold the majority share in the new viscose fiber plant
and will bring its technical competence and production experience
into the new joint venture, Modi Fibers Limited will provide the land
and local experience.

The legal requirements for the construction and operation of the
plant have already been met.

Lenzing will build a state-of-the-art viscose fiber production plant
in India, using the latest fiber technology. Moreover, Lenzing's
closed chemical production cycles and chemical recovery systems, as
well as its modern exhaust gas and waste water purification systems
will set new standards for environmental protection in India.

Lenzing India will be the group's seventh production plant. The new
plant and future capacity expansion at the others sites will have
increased the group's total production capacity by the turn of the
decade to more than 660,000 tons of cellulose fibers, securing
Lenzing's position as global market leader.

With the completion of this project, Lenzing will have more than
doubled its number of production sites, as well as its production
capacity within a decade by means of organic growth, greenfield
projects and acquisitions.

end of announcement euro adhoc 18.04.2007 07:39:25
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ots Originaltext: Lenzing AG
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:
Lenzing AG
Mag. Angelika Guldt
Tel.: +43 (0) 7672-701-2713
Fax: +43 (0) 07672-96301
mailto:a.guldt@lenzing.com

Branche: Chemicals
ISIN: AT0000644505
WKN: 852927
Index: WBI
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