How Lenzing is Investing in Innovation and Capacity Expansion Amid Lyocell Market Lift
As the focus on sustainability in the fashion and textile industry grows, it’s supporting market growth for lyocell fiber.
According to a report from Credence Research, the global lyocell market was $1.3 billion in 2022, and it is projected to expand to $3.43 billion by 2032, representing a 10.2 percent compound annual growth rate in that period. While this figure also includes applications like nonwoven hygiene products and specialty paper, the report notes that the demand for staple fiber—primarily used for apparel and home textiles—is specifically seeing a demand lift.
“As the industry continues to expand, lyocell fiber is expected to play a crucial role in meeting the global demand for eco-friendly and high-quality textile materials,” says the report.
The report notes that with growing regulations, the industry will be looking for more sustainable options. With increasingly stringent corporate sustainability goals, lyocell can help meet carbon-neutral targets. Additionally, emerging markets are seeing a boost in consumer awareness of sustainability, driving downstream demand. Per the research, Asia-Pacific is the fastest-growing market for lyocell as disposable incomes increase.
Lyocell has a number of environmental benefits that are contributing to its growing popularity. For one, it’s made from natural wood pulp, a renewable resource. Because of its botanical origins, lyocell is also biodegradable. Lenzing’s TENCEL™ Lyocell has been certified by TUV Austria to be fully biodegradable in soil, freshwater and marine environments and compostable in home and industrial conditions.
Another sustainability aspect in lyocell’s corner is its closed loop production process, which recycles solvent used. In the case of TENCEL™ Lyocell, more than 99 percent of the solvent is reused.
Helping TENCEL™ communicate about its sustainable attributes, Lenzing launched a rebrand for the fibers in 2024. The new positioning and brand identity centers around “Nature. Future. Us.”
In addition to sustainable attributes, lyocell has properties including high tensile strength, moisture management, breathability and a soft hand feel that make it attractive. It adds a luxurious feeling to fabrics while also being comfortable to wear.
Fiber makers are also propelling demand through the introduction of new fiber types. Since lyocell is man-made, producers can change up fiber properties to fit different market needs.
In the denim industry specifically, Lenzing Group has seen mills and brands increasingly opt for TENCEL™ Lyocell. This is partly due to the work that the company has done in fiber innovation.
For instance, matte TENCEL™ addressed one hurdle that was limiting the adoption in denim: sheen. Some denim makers didn’t want a shiny look, so we created matte TENCEL™ to help them achieve a flatter look while still taking advantage of lyocell’s softness and comfort.
The report notes that setting up manufacturing facilities for lyocell is more expensive than opening factories for conventional fibers, and there are added costs tied to raw materials. Lyocell requires high-quality wood pulp, and there is also limited availability for responsibly sourced wood. Despite these cost challenges, the report notes that advances in manufacturing are making the fibers more efficient and cost effective to produce, while also improving quality.
Helping to meet the growing demand for lyocell, Lenzing Group has increased our lyocell production capacity through investments like our plant in Thailand, which opened in 2022. The factory in Prachinburi has an annual production capacity of 100,000 tons.
“The demand for our wood-based, biodegradable specialty fibers under the TENCEL™, LENZING™ ECOVERO™ and VEOCEL™ brands is growing very well,” said Robert van de Kerkhof, member of the managing board, in 2022 regarding the Thailand opening. “In Asia in particular, we see huge growth potential for our brands based on sustainable innovation. With the production start of the lyocell plant in Thailand, Lenzing reached an important milestone in its growth journey, supporting our ambitious goal to make the textile and nonwoven industries more sustainable.”