Lenzing AG is considering a $30 million, 63-job expansion of its Axis plant.

Officials of the Austrian synthetic fiber maker say demand is expanding, and that technical advances are opening new markets for lyocell, a fabric made from dissolved wood pulp spun through jets.

Kevin Allen, president of U.S. subsidiary Lenzing Fibers Inc., said that the company’s board could approve plans before year’s end. He said a Lenzing plant in England and one in Austria are competing for the work.

Tuesday, the Mobile County Industrial Development Authority approved $2.67 million in tax breaks meant to aid the Axis bid. That amount includes a $1.23 million waiver of sales taxes on equipment and construction costs, as well as a $1.44 billion waiver of non-school property taxes over 10 years.

“By the IDA approving these abatements today, they can make a really strong case,” said Claudia Zimmerman of the Mobile Area Chamber of Commerce.

The Axis plant, which now has 110 employees, has run on a reduced basis for the past decade, as U.S. demand fell for its silky but strong fabric — sold under the Tencel name.

The factory opened in June 1992, with the former Courtaulds PLC investing $234 million. At one time, it employed as many as 175 people, but the plant was shuttered for a time. When it reopened with fewer employees, two lines were left idle.

A Courtaulds rayon plant, which once had 1,000 workers, was adjacent to the plant. Courtaulds’ successor Acordis closed the rayon plant in 2001.

The future has brightened for lyocell, though. Along with pulp supplier Weyerhaeuser Co., Lenzing has developed a new method to make nonwoven lyocell fabric. Nonwovens are frequently used for items such as personal care wipes.

In addition to the new market, cotton prices have been rising worldwide. Lenzing officials have said that they believe fabric made from wood will be an attractive alternative to cotton because the cotton competes for acreage with food crops such as corn and soybeans.

Earlier this month, the company announced an investment plan worth 120 million euros ($162 million), aimed at strengthening production at Grimsby, England, and two Austrian plants.

The company said Tuesday that the three months ended Sept. 30 were its best quarter ever, with pre-tax profit rising 63 percent to 60.8 million euros ($81.9 million). Sales rose 48 percent to 464 million euros ($625 million).

“We see our market as improving quite significantly,” Allen said.

He said that because the two lines have been idle in Axis for so long, much of the equipment is outdated and needs to be replaced. Documents submitted to the authority say Lenzing would spend $24 million of its planned $30 million on equipment.

The changes would boost production by two thirds, from 30,000 to 50,000 metric tons. Allen said some lyocell would be exported to Asia for clothing uses, but most is expected to be used in the United States.

“I would say the majority is going to go into the personal care market,” he said.  Source Blog.al.com

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