Austrian leader in wood-based specialty fibers, Lenzing, is taking a significant stride in its commitment to sustainable energy sources with a strategic investment in a new wind farm. Partnering with Austrian electricity producer WLK energy, Lenzing has secured approximately 13 megawatts of wind power through a 15-year contract set to commence in 2025. This collaboration underlines the company's dedication to fostering a stable and diversified power supply, embodied by the establishment of the Engelhartstetten wind farm featuring 11 turbines with a total capacity of 45 megawatts.
Headquartered in Untersiebenbrunn, Lower Austria, WLK energy is a key partner in this venture. Lenzing's allocation of 13 megawatts is equivalent to the annual consumption of around 10,000 Austrian households. The groundbreaking ceremony on November 9 marked the initiation of this eco-friendly initiative.
Sustainable Energy Partnership and Lenzing's Commitment
Christian Skilich, a board member at Lenzing Group, underscored the importance of the partnership in driving Lenzing's decarbonization objectives. The generation of renewable electrical energy from wind, solar, and biomass stands as a fundamental element of the company's corporate strategy, forming the bedrock for sustained long-term commercial success. Collaborating with robust partners enables Lenzing to bolster its independence from the global energy market, thereby enhancing overall planning security.
This renewable energy commitment aligns with Lenzing's broader sustainability objectives. In 2019, the company set a target to reduce its CO2 emissions by 50 percent by 2030, aiming for carbon neutrality by 2050. Earlier accomplishments include the establishment of Upper Austria’s largest open-space photovoltaic plant in collaboration with Verbund, one of Europe’s largest hydropower producers. Lenzing has also secured photovoltaic energy contracts with Enery and Energie Steiermark. Additionally, the company recently introduced a groundbreaking real-time ocean shipment tracker, enhancing visibility into carbon emissions among its partners.
Navigating Market Challenges
However, Lenzing's renewable energy announcement comes in the context of broader market challenges. On November 3, the company disclosed ongoing efforts to address higher raw material and energy costs and sluggish demand. Despite reporting 1.87 billion euros ($2 billion) in revenue for the first three quarters of 2023, a 5.3 percent decline from the previous year, Lenzing Group CEO Stephan Sielaff highlighted the persistent challenges in relevant markets.
To navigate these challenges, Lenzing has implemented a comprehensive performance improvement program, expecting to generate 100 million euros ($107 million) in savings. This includes a strategic reduction of around 500 full-time roles, aligned with the company's commitment to efficiency and profitability. The board anticipates realizing 50 million euros ($53 million) in savings within the next fiscal year, demonstrating Lenzing's proactive approach to sustaining long-term success in a dynamic market landscape.