Lenzing Stock Analysis: Lenzing has joined the global secular trend of sustainability with its textile business, and is now creating wood-based fibers made of viscose, modal, lyocell, and filament yarn. The source for all of these fibers is cellulose, which is the natural component of wood that can be extracted through pulping and then placed under high pressure in combination with solutions of sodium hydroxide and sodium sulfide. What’s the allure of cellulose for textiles? It’s completely biodegradable so as Lenzing puts it: “at the end of the life cycle, our fibers can become part of our ecosystem again”.

Lenzing is very particular about which products it uses, sourcing more than 99% of its wood from completely sustainable forests. The company also uses a closed circle of water, chemicals and energy, and even has its own sewage treatment plants to reuse water in manufacturing. Green energy is another secular trend, Lenzing utilizes the leftover wood from its pulping to create thermal energy and electricity. In this way, Lenzing is able to carry out its production with little use for external sources of energy.