Longtime textile industry veteran Rohit Aggarwal took the reins of the Austrian fiber producer Lenzing at the beginning of September as the company seeks to steady itself from global economic headwinds.
Aggarwal “always had a huge amount of respect” for the company and its sustainability goals during his more than two decades in the textile industry. So when the opportunity came to step into the chief executive officer’s role, “it was a no-brainer,” he joked.
Much of his remit is to “future-proof” the company, as the apparel sector grapples with slower consumer demand amid the cost-of-living crisis, but at the same moment brands need to step up their use of sustainable materials.
Part of the work will be to increase Lenzing’s profile among consumers. “I don’t think we are fully recognized,” he said.
Lenzing is a supplier of regenerated cellulosic fibers for the textile and nonwovens industries — but probably better known to consumers as the maker of Tencel and Ecovero-trademarked fibers. Their process has up to 50 percent lower water impact and CO2 emissions when compared with generic viscose, the company claims.
“We have got to make sure that the understanding of the value proposition and what the brand stands for is articulated more clearly. Some of the brands that we work with, they understand it, and their design teams understand it, but does it get naturally transmitted to a consumer understanding and making choices? We’ve got more work to do that.
“When [a consumer] spots a label or a co-branded product which has ‘Tencel’ on it, it should give them an instant feeling that this is a far more sustainable product,” he said.
Increased consumer awareness and demand for better materials puts Lenzing in a position to grow.
“It is also a key driver for Lenzing in being able to not just sell a fiber, but actually help brands get the message out, which helps the industry, and because some of these are really brands that shape the narrative for the consumer, when they start to talk about it, it just become more real.”
DVF x Lenzing Ecovero fibers.
The company is continuing to strengthen its pipeline of partnerships with brands, and already has some high-profile fashion products in the bag.
Diane von Furstenberg launched the first pieces of a long-term partnership with its spring 2024 collection, and will continue to use the company’s fibers in its seasonal and core collections. Lenzing has also partnered with smaller sustainable brands such as Twothirds, and worked with Scandi sustainable superstar Ganni, which uses the company’s Ecovero viscose.
Lenzing has two teams devoted to promoting the company’s fashion proposition, one working with established sustainable brands and another reaching out to brands that are figuring out that journey. Part of that team’s work with brands is “to help them understand the value proposition from a fashion perspective,” including at a product level, as well as how it can help them reach specific sustainability targets.
The calls have been increasing since he’s stepped into the C-suite, with brands sending a clear message: “We need more, and we need it fast, because the world is just now suddenly catching up to the challenge” of sustainability, he said. Brands are increasingly concerned about the sustainability of their materials and reducing their carbon emissions, both due to consumer demand and coming regulations.
“For us it’s a great thing, because that’s our core offering,” he added. The company is increasing its production capacity, and is building a new billion-dollar plant outside of São Paulo along with joint venture partner Duratex that will produce 500,000 tons of pulp per year.
It’s a strategic shift for the company. “The approach would be that we are no longer just a fiber user, supplier, innovator, but can be a total solution provider,” he said.
It’s been a busy two months for Aggarwal. Just two days after he started, Lenzing revealed that Brazilian group Suzano, the world’s largest producer of cellulose pulp, took a 15 percent stake in the company. A month later, Lenzing said it had taken a minority stake in Swedish textile producer TreeToTextile to scale up production.
The first results since took on the role, earlier this month showed that revenue climbed 5 percent year-on-year in the first nine months of the 2024.
The company is continuing to look for potential investments with both established producers and innovative start-ups, much of that based in Europe. Start-ups in the region are rooted in sustainability and prepared to scale up as new regulations over the next five years. Brands will have to adapt, and quickly.
“People are sensing it. People know there’ll be opportunities. It’s matter of not if, but when and how,” he said. “In Europe, in many ways, the thought leadership is way ahead right now from other regions as far as the textile value chain is concerned.”
A Lenzing facility.
Lenzing itself is ahead of its own sustainability targets, Aggarwal said. Converting six of its production sites to 100 percent renewable energy has had a “massive impact.”
The company’s traceability bonafides also strengthen its market position for brands.
“I say very proudly, we’re the only ones that can go from the source of the tree all the way to the end of the life cycle,” he said. A major issue for brands is that they often don’t fully know their supply chains and lose visibility the further down they dig. While these are big changes for brands, they will have systemic ones for the overall industry.
“I’ve been in the industry for some time, and I keep hoping that something will catalyze the speed [of change],” he said. “But then I realized that the road we are on is a one-way street, and it’s only a question of how fast we can move on that street.”
