Lenzing Restructures, Cuts Jobs, and Closes Plants Amid Profit Growth

Lenzing, the Austrian fiber manufacturer, is undergoing a significant strategic overhaul, signaling a new direction for the company. In early July, Georg Kasperkovitz hinted at these changes, which were confirmed last week with the announcement of substantial job cuts and the closure of two plants: one in Heiligenkreuz, Austria, and another in Grimsby, UK.

Amidst this restructuring, Lenzing released its financial results for the first six months of the year, revealing a more than twofold increase in net profit after taxes, reaching 35.6 million euros, up from 15.2 million euros in the same period last year. However, revenues saw a slight decrease of around 5%, falling to 1.27 billion euros from 1.34 billion euros previously. The company attributes this decline to a reduction in lower-margin fibers and decreased revenue from external pulp sales, as it prioritizes higher-margin products.

This strategic shift includes phasing out standard viscose fiber production in Indonesia, with the facility and its 1,400 employees up for sale. Lenzing cites the dominance of Chinese manufacturers in the textile fiber market, which dictates pricing, as a major challenge to profitable growth. The company plans to reduce the share of textile revenue from 45% to 30% while increasing the contribution from external pulp sales from 20% to 30%. Nonwoven applications, used in products like feminine hygiene items, will also grow in importance, with their share rising from 26% to about one-third.

"The results of the first half of 2026 show that our sales measures and consistent cost discipline are working. At the same time, they confirm the necessity and potential of our strategic realignment," stated CFO Mathias Breuer. The company has already achieved 200 million euros in savings and aims to reduce costs by another 120 million euros by the end of 2027. The "optimization of the production network" is also underway, with the Heiligenkreuz site, employing about 280 people, set to close by year-end. Lenzing is seeking a new owner for this facility, which has incurred operational losses for years and no longer fits the company's portfolio. Production in the UK is slated to cease by the end of 2027.

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The results of the first half of 2026 show that our sales measures and consistent cost discipline are working. At the same time, they confirm the necessity and potential of our strategic realignment.