Lenzing Expands Production In Austria, Indonesia

Austria-based viscose fiber producer
Lenzing AG plans to invest 151 million euros (US$221.8 million) to expand capacity at its two
largest production facilities, located in Austria and Indonesia.

The company will invest $45 million euros (US$66.1 million) to add 15,000 tons of capacity
at its largest manufacturing facility in Lenzing, Austria, bringing the total capacity at that
location to 250,000 tons. At its Purwakarta, Indonesia-based PT South Pacific Viscose facility,
Lenzing will invest 106 million euros (US$155.7 million) to add a fourth production line to
increase capacity from 155,000 tons to 220,000 tons, as well as to improve infrastructure and
optimize production.

“The demand for Lenzing fibers, particularly in Asia, has recently been very positive,” said
Thomas Fahnemann, chairman of Lenzing’s Management Board. “In the medium term, we view the
continuing economic growth of the region, the rise in prosperity and its growing population as
indicators of very good market opportunities.”

Fahnemann said Asia is the company’s primary growth market, noting potential for additional
capacity expansion in that region, especially in China, where it opened a production facility last
year. Lenzing also plans to build a fiber-production plant in India.

Lenzing produces 560,000 tons of viscose fiber annually at six fiber production facilities
worldwide. With the announced expansions, along with a previously announced expansion at its
Tencel® facility in Heiligenkreuz, Austria, the company’s annual production capacity will total
660,000 tons.

January 23, 2008