Textile industry – Lenzing boss: “Disturbing picture”
The textile fiber producer Lenzing is currently anything but well listed on the Vienna Stock Exchange. The mask scandal surrounding Hygiene Austria, a company operated jointly with the laundry manufacturer Palmers in Wiener Neudorf, which is being investigated for serious commercial fraud and illegal work, is seriously scratching the reputation of the Upper Austrian global corporation. The share price also went downhill on Thursday – at times by almost 7 percent. This means that the price drop for the ATX stock has increased to around 12 percent within a few days. At the presentation of the annual balance sheet for 2020, Lenzing also admitted that it was confronted with a not inconsiderable “image problem” due to the cause. Company boss Stefan Doboczky spoke of a “disturbing picture that is presented here”. He and technology director Stephan Sielaff assured that they had no knowledge of masks bought in China, which were then marketed under the false label “Made in Austria”, and of illegal work. “We only found out about it on March 3rd, the day the house was searched (Hygiene Austria, note),” said Sielaff. As the Lenzing manager further explained, important processes were located at the joint venture partner Palmers. There was data in his rooms to which Lenzing had no access. In any case, Lenzing was “unable to take over the” management control “at Hygiene Austria after the mask affair was exposed, according to Sielaff. Lenzing holds a majority stake of 50.1 percent in the joint company, the management of which, as reported at the beginning of the week, is now to be transferred to a chartered accountant. With 49.9 percent of the shares, Palmers is “only” the junior partner of the Upper Austrians. “Want transparency quickly” When Hygiene Austria was founded in spring 2020, Palmers board member Luca Wieser outlined the distribution of tasks between Lenzing and Palmers with the following words: “We have many years of experience in the manufacture and sale of textile products, Lenzing AG contributes its technological experience in the hygiene sector, the know-how regarding procurement and raw materials as well as knowledge in the field of plant construction. In this context, Sielaff emphasized that the “Made in Austria” promise for the production of the protective masks was in any case “not continuously guaranteed”. The remaining Hygiene Austria managing director, Tino Wieser, who was appointed by Palmers, had already admitted to having obtained some of the masks from China. “Lenzing is not Hygiene Austria”, emphasized CEO Doboczky. “But it goes without saying that Lenzing is required to make a contribution to the processing. And we will do that too.” In the group, Sielaff is now to take a close look at the disaster surrounding Hygiene Austria, after Stephan Trubrich was dismissed as managing director of the joint venture. “We want to ensure transparency here as quickly as possible,” said Sielaff. In economic terms, Hygiene Austria has not brought anything to its majority owner, except costs. “To date there has been no profit transfer towards Lenzing,” said Sielaff. What should happen to the majority stake in the future, the value of which is noted in the consolidated balance sheet at 4.5 million euros, the manager left open. “First we have to understand what happened.” Dividend canceled again Lenzing did not have much else to report on Thursday. In the Corona year, the group, which has around 7,400 employees worldwide, fell by 22 percent to 1.63 billion euros. Lenzing posted a net loss of 10.6 million euros (after 114.9 million euros profit in the previous year). According to Doboczky, there will be no dividend for 2020 either. For this year, the Lenzing boss expects an operating result that should be roughly at the level of the pre-crisis year 2019. For the textile and clothing industry as well as the hygiene and medical industry, he assumes an increasing demand for fibers.