The Lenzing Group has announced proposals to close its lyocell manufacturing facility in Grimsby by the end of 2027, placing 215 jobs under threat as part of a worldwide restructure aimed at streamlining operations and focusing on higher-value markets.
Global restructure targets Grimsby site
The Austrian-headquartered company, which operates production sites in the US, China, Indonesia and at Grimsby's Energy Park Way, said the closure is part of its new "Grow Nonwovens, Reset Textiles" strategy. The Grimsby plant specialises in producing lyocell, a plant-based textile made from wood pulp, widely known under the brand name Tencel. The facility originally opened under Courtaulds Fibers in 1998, marking nearly 30 years of manufacturing in the region.
Lenzing confirmed it will phase out production at its fiber plants in Heiligenkreuz, Austria by end of 2026 and in Grimsby, UK by end of 2027. The company said it will explore "strategic options" for the affected sites, including potential sale to new owners or other value-preserving solutions.
CEO cites market changes and long-term positioning
Georg Kasperkovitz, chief executive of the Lenzing Group, said: "With 'Grow Nonwovens, Reset Textiles', Lenzing is taking decisive steps to reposition the company for long-term success in a fundamentally changing market environment. By combining a streamlined premium product portfolio, improved competitiveness and a strong proprietary innovation pipeline, we are creating the foundation for profitable growth and a more focused, resilient Lenzing."
He added that the transformation will strengthen the main production site in Lenzing, Austria, and support a sustainably profitable and competitive future. For the affected sites, Lenzing is evaluating strategic options including divestment or other value-preserving solutions.
Employee impact and support measures
Should no viable outcome be achieved, Lenzing plans a structured and orderly wind-down, focusing on safety, supply reliability, and continuity for customers as well as social and environmental responsibility. For affected employees in Grimsby, the company will engage with employee representatives and relevant stakeholders regarding appropriate support and mitigation measures.
A spokesman for Lenzing confirmed that around 215 employees work at the Grimsby site and stated: "Lenzing will engage with employee representatives and relevant stakeholders regarding appropriate support and mitigation measures for the affected persons. At this point, it is too early to make definitive statements about the transition of employees within the business."
Recent investments and financial performance
The closure announcement comes five years after Lenzing Fibers Grimsby invested a reported £20 million in a new waste water treatment plant at the site. The company's most recent accounts, for 2024, show turnover fell from £117 million to £107 million, though the previous year's loss of £1.7 million was turned around into an operating profit of £19 million. Directors pointed to robust demand for its products while cautioning that cost pressures remained an ongoing concern.
Lenzing has already cut 267 jobs across several sites so far this year, generating annual savings of €25 million. The company stated its plan is designed to improve competitiveness, profitability and return on invested capital, positioning Lenzing for long-term growth in higher-value markets and to better serve the needs of brands and retailers in Western and Asian markets.
Global headcount reductions
Lenzing's global headcount is anticipated to be reduced by approximately 2,000 positions by the end of next year, from around 8,100 employees at the close of 2025. The company confirmed the cuts will primarily affect employees at the sites in Heiligenkreuz (Austria), Grimsby (UK), and Purwakarta (Indonesia). The consolidation proposals follow Lenzing having already reduced staff numbers earlier in the year, generating ongoing savings.
The announcement is set to deliver a devastating blow to the region's manufacturing sector, ending nearly three decades of production at the Grimsby site. The company said it will ensure a structured wind-down with a strong focus on safety, supply reliability, and continuity for customers.
