Lenzing Acquires Tencel

Lenzing AG, Austria, producer of Lyocell® and other man-made cellulosic fibers, has acquired
lyocell producer Tencel Ltd. and its entire group of companies from Corsadi BV, The Netherlands.
Financial details of the deal were not disclosed.

Tencel has a total annual lyocell production capacity of 80,000 tons from its Mobile,
Ala.-based plant in the United States and its Grimsby-based plant in England. Lenzing’s annual
lyocell capacity at its plant in Heiligenkreuz, Austria, totals approximately 40,000 tons.

“The acquisition marks a milestone for the Lenzing Group,” said Thomas Fahnemann, chairman of
Lenzing’s Managing Board. “We are tripling our lyocell capacity and thereby reaching the critical
size that is necessary for a sustainable and profitable lyocell operation. With Tencel®, the brand
name, we are taking over a most successful brand, together with its international marketing team.”

“This deal represents a great opportunity for the Tencel organization to see through the
development of lyocell fiber technology into the cellulosic fiber of the 21st century,” said Mike
Proctor, Tencel’s acting CEO. “Our coming together with Lenzing signals a commitment to our core
competence in cellulosic fibers, and it offers our employees, customers and suppliers long-term
confidence in the future.”

According to Lenzing, the acquisition will allow it to be more flexible in using the
available capacities, as well as to optimize its response to market and customer influences.

In addition, Fahnemann said, “We expect major stimuli for our development work from the broad
mutual exchange of experience and technology that has now become possible.”

Earlier this year, Lenzing reorganized its corporate structure into market-oriented business
units, which the company says will facilitate the integration of Tencel with its Lyocell business

June 2004