Lenzing AG is refining its global strategy in response to ongoing challenges in the global textile and nonwovens markets as well as geopolitical changes. This strategy includes prioritizing higher margin fibers including Tencel, Veocel, Lenzing and Ecovero, a gradual withdrawal from lower-margin commodity segments and the potential sale of its Indonesian production site. Additionally, the company will seek growth not only in established applications such as denim, home textiles, and menswear, but also through expansion in hygiene, packaging, filtration, medical, and industrial applications. Production capacities will be selectively shifted from textile to nonwoven applications in order to capture the growing demand for renewable nonwoven fibers. Application driven innovation through strategic partnerships with customers will be pursued with greater intensity by strengthening Lenzing’s application innovation centers.

“For us, 2025 is the year of continued execution. We have demonstrated that we can increase our profitability even in a challenging environment. It is important to further strengthen the agility, resilience and cost position of Lenzing with the aim of long-term value creation in order to reinforce the company’s position as global market leader in sustainable cellulosic fibers,” says chairman of the managing board and CEO Rohit Aggarwal. “We are building on our strength as an innovation leader while optimizing our structures and processes to realise cost savings and further strengthen our competitiveness.”

In the first half of 2025, the company achieved continued increase in earnings and profitability with strong cash flow generation. Despite this positive development, Lenzing anticipates that the global environment will remain volatile and uncertain. Trade conflicts, subdued consumer sentiment, rising costs, and increasing competition from Asia continue to shape a challenging market environment. The company’s refined strategy prepares it to succeed in challenging market conditions: leaner, more agile, more resilient – with any market recovery as an upside.

The weak market recovery (e.g. due to tariff uncertainties), low generic fiber prices in China, and rising costs in personnel, energy, and raw materials require additional measures to ensure long-term competitiveness. To further strengthen operational efficiency, Lenzing plans to reduce costs with a series of efficiency measures including a headcount reduction at its Austrian headquarters to make administrative areas  leaner and more efficient. At the same time, the company will strengthen its international presence in Asia and North America, moving closer to its customers in key textile and nonwoven markets. This internationalization move will result in another headcount reduction at the Lenzing site of approximately 300 employees by end of 2027, with both measures leading to total annual savings of more than EUR 45 mn, latest fully effective before end of 2027.

To strengthen competitiveness and lasting site profitability in Austria, the comapny will invest €100 million at its Lenzing and Heiligenkreuz sites by the end of 2027. Heiligenkreuz will strengthen its global leadership position as the most environmentally friendly production facility of specialty fibers and the hub to drive innovation through targeted investments in new technologies. At the Lenzing site, further investments with strategic partners are in preparation to support Lenzing’s premiumization strategy.