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Expansion into carbon fiber production

Another joint venture with the Lenzing Group for the production of carbon fibers, yet to be concluded, is being planned.

"Expanding into the new business field of carbon fibers opens additional and attractive growth potential for our business unit Plastics" is the reason given by Thomas Fahnemann, chairman of the Lenzing management board, for this strategic decision. The high strength of carbon fibers (four times higher than that of the best steel alloys) makes them the promising construction material of the future. The use of carbon fiber in the aviation, automotive and shipping industries will rapidly increase in the future. Market analyses expect annual growth rates of about 10% for the coming years.

The new generation of airplanes, such as Airbus A380, Boeing 787 and Airbus A350 is an important example. The carbon fiber demand of the wind power industry for their new rotor blades spanning almost 200 feet is high as well. Carbon fibers are also used in sports, such as for golf clubs, hockey sticks, tennis rackets, as well as for kayaks and bicycles. The racing yachts of the America's Cup are now fully carbon manufactured and carbon fibers are also gaining more and more ground in the production of standard yachts for materials under high stress, such as masts. The automotive industry, too, increasingly opts for this innovative construction material. Previously only used in premium and super sports cars, carbon fibers are already today spreading into the construction of special parts for cars of the upper middle segment.

"Already today, the global production capacity in operation is unable to meet current demand. Especially the high-quality carbon fiber sector lacks capacity, which we will create in the next years. The partner we have won, SGL Carbon, is moreover the global leader in carbon fiber production, whose expertise in the market, as well as in production and sales makes it the ideal complement to the fiber expertise of Lenzing and Kelheim Fibres" says Thomas Fahnemann. Kelheim Fibres produces high-strength acrylic fiber specialties marketed under the brand names Dolan and Dolanit. The existing facilities for the production of specialty polymers will be brought into the joint venture.

European Precursor GmbH will start operations in the course of 2007. In the medium term up to fifty million euros are expected to be invested into the capacity expansion for the production of primary materials and fibers. These activities in the new business field carbon fibers are intended to generate a significant sales contribution in the double-digit million euro range for Lenzing's business unit Plastics. The expansion into the carbon fiber business is the second strategic growth step of Lenzing Plastics in recent months, after the takeover of the German plastics producer Hahl Group.

Further inquiries:

Mrs. Angelika Guldt
Corporate Communications
Phone: +43 (0)7672 701-2713

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