Lenzing Group Builds Viscose Fiber Plant In India

With India its most successful market after China for viscose fiber, the Lenzing Group, Austria,
has entered into a cooperation agreement with the Modi Group to build a new viscose fiber plant
near Mumbai, India. A preliminary investment of US$200 million will cover the first phase of
construction, which is expected to take two years, with the first production scheduled for

The facility, located in an industrial park in Maharashtra State, will have first-phase
production of 80,000 tons of viscose fiber per year and will employ between 700 and 800 people.
Once completed, the new facility – Lenzing’s seventh production plant – will have more
than doubled the company’s total production capacity within 10 years. Modi Fibers Ltd. will
contribute the land and local experience to the joint project, while Lenzing will own the majority
share and bring its production and technical expertise to the project.

“After the successful start-up of our plant at Nanjing, China, this is the next logical step of
our expansion focusing on Asia,” said Thomas Fahnemann, chairman of Lenzing’s Management Board. “It
was above all the strong demand from Indian customers that facilitated our decision to produce
fibers locally in India.”

“We are happy to have found in Lenzing, the technological leader in viscose fiber production,
our long-term partner for the Indian textile and nonwovens industry,” said Satish Modi, chairman,
Modi Group.

A Lenzing branch office in India currently supports customers in that area, but the plant will
allow India-based companies to buy Lenzing Viscose® fiber without paying high import duties. In
addition, only one viscose supplier currently exists in the Indian fiber market, a situation that
hampers industry growth.

Lenzing Viscose® is used for classic, summer clothing with a soft, flowing look.

“With Lenzing, we expect a substantial improvement in the supply situation of the rapidly
expanding Indian textile and nonwovens industry with high-quality fibers,” Modi added. “Indian
industry will greatly benefit from this project.”

In related company news, Lenzing recenlty opened its second viscose fiber production plant in
Asia. Launched with an investment of 65 million euros (US$87.8 million), Lenzing (Nanjing) Fibers
Co. Ltd., China, is a joint venture with China-based Nanjing Chemical Fibre Co. Ltd., which holds
30 percent of the new facility’s shares. Lenzing holds the remaining 70 percent.

Lenzing (Nanjing) has a production capacity of 60,000 tons of viscose fiber per year, and
expansion is expected to occur as the market demands. The plant currently employs 540

May/June 2007