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

  Disclosure announcement transmitted by euro adhoc. The issuer is responsible
  for the content of this announcement.
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

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
Börsen: Börse Berlin-Bremen / free trade
Wiener Börse AG / official dealing

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