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Fiber Company Stops Plant Expansion Plans

They stopped because of trade tensions and a tight labor market.

Antonius Mertens, @AntoniusMertens

MOBILE, Ala. (AP) — An Austria-based fiber production company has backed away from plans to expand a plant in a city in southwest Alabama.

Lenzing passed on expanding its plant in Axis, Alabama, because of trade tensions and a tight labor market, reported. The plan halted the $300 million expansion that would have brought more than 150 jobs to the area.

Alabama Secretary of Commerce Greg Canfield described the decision as "unfortunate and unexpected."

Bill Sisson, president and CEO of the Mobile Area Chamber of Commerce, said the Chamber was "very disappointed" and that Lenzing is "a good corporate citizen that provides hundreds of high-paying jobs."

Lenzing operates a factory in Axis, north of Mobile, where it manufactures Tencel, a fiber made from wood for use in textiles. In late 2016 the company announced plans to invest an expected $293 million in an expansion that would use newer, more efficient production methods and would vastly expand capacity.

Mobile County Commissioner Merceria Ludgood, who'd celebrated the expansion, said the move showed how "national decisions have local consequences" and that federal trade policy was putting hard-won economic gains at risk.

Lenzing said it would "reassesses this decision on an ongoing basis." The announcement of the expansion in 2016 was celebrated by the state, the Mobile Area Chamber of Commerce and the Mobile County Commission, among others.

Ludgood, whose district includes Axis, said the situation should serve as a warning.

"The loss of jobs is particularly disappointing for the community," she said. "I am also disappointed for the local Lenzing team that worked so hard to bring this expansion to the Axis plant. This is a reminder for us that national decisions have local consequences and for us this means the loss of good paying jobs for the citizens of Mobile County. I sincerely hope the trade issues will be resolved soon, allowing the expansion to resume."

Sisson hopes there is an ease in trade tensions.

"The tariff situation continues to evolve and requires constant attention," he said. "Our trade team continues to monitor and will report to the business community. Our hope is these issues will soon be resolved with the least amount of impact."

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