Austrian fibres producer Lenzing plans to invest more than 1 billion euros (895.4 million pounds) in expanding production in coming years, and in a first step will build a 400 million euro facility in Thailand, it said on Wednesday.

The company, which makes cellulose fibres used in textiles, said construction work for the plant 150 km (93.2 miles) east of Bangkok will start in autumn. Production is expected to start in late 2021 and will reach a volume of around 100,000 tonnes per year.

Lenzing halted a planned U.S. expansion in September, blaming rising tariffs between the United States and China, where much of the project's production was destined. The group mothballed a $322 million project in Alabama to focus on setting up a production facility in Thailand.

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"The expansion, that has now been approved underlines Lenzing's commitment to improving the ecological footprint of the textile industry worldwide," said Chief Executive Stefan Doboczky.

Lenzing has a strong focus on sustainability with its fibres made of cellulose, a natural component of wood. It said it plans to halve its 2017 CO2 emissions by 2030 and to not emit CO2 net by 2050.