The collapse in demand from the fashion industry is hitting Upper Austria’s Lenzing Group, which produces fibers for the global textile industry. The austerity program and staff reductions are already underway. Now main owner B&C Holding is looking for a strategic partner who can take over the shares.
In general, partners are possible for all three main investments of the domestic B&C Holding, which emerged from the industrial division of Bank Austria. These are Semperit, the aluminum producer Amag and Lenzing. Reason, says CEO Wolfgang Hofer: “The global economy is more uncertain than ever. We must prepare for weaker growth in the longer term. This requires the right strategy and shareholder structure. In the interest of sustainable development and securing locations in Austria, strategic partners with long-term participation are preferred.”
There are no concrete negotiations yet, but they are now open for discussions. It is conceivable that the majority of the shares could be sold from the current more than 50 percent to a minimum of 25 percent plus one share, so that B&C can continue to have a say in important decisions.
Two billion euros invested in new factories
The biggest problem child is Lenzing, in which B&C owns 52.3 percent. Global demand for textiles and therefore fiber sales is weak and is recovering only slowly. Lenzing therefore had to massively devalue its production locations last year and recorded a net loss of 563 million euros with a turnover of 2.5 billion euros. At the same time, the Upper Austrians have invested two billion euros in new factories in recent years (Brazil, Thailand). A stricter savings program will come into effect at the main factory in Lenzing and at the second local factory in Heiligenkreuz; Within the entire group, more than 800 jobs have been cut, and according to Chairman of the Supervisory Board Cord Prinzhorn, that may not be enough.
Things are improving at industrial rubber producer Semperit and Amag, both of which have adapted to the changed situation in a timely manner, praises CEO Wolfgang Hofer. Overall, B&C is well positioned and has strong capital. They recently invested in the Innbruck startup ‘Parity QC’, which is involved in quantum computer research.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
