AFTER RELOCATING TO THE INDUSTRIAL PARK "Teraplast" wants to sell its real estate assets

• This year, the company is betting on the infrastructure segment

• Interview with Mr. Ştefan Bucătaru, president and CEO of the company

Reporter: Mr. president, how would you describe the year 2011, in terms of its overall environment and of what it meant for your company, "Teraplast". Also, what are your expectations for 2012?

Ştefan Bucătaru: We haven't seen any significant improvements in the economic environment in 2011. Liquidity on the construction market has remained low, because of the payment delays for the already developed public projects, a lack of financing from the banking institutions for private projects, as well as the degree of difficulty with which the institutions of the government have accessed co-financing for public projects. In 2012 we expect a slight recovery of the construction market, in particular on the environmental infrastructure segment, as these projects receive European financing, for which the absorption rate has been low until now.

Reporter: What were the main factors which had a negative effect on the results of the company?

Ştefan Bucătaru: Demand for construction materials is the main factor which influenced the company's earnings. Moreover, the fluctuation of the exchange rate of the leu against the Euro and the dollar also had a negative influence on the company's results. As market demand remained low, the cost increases generated by the evolution in the price of raw materials were only partially shifted to consumers through the selling price of the end products, which affected the profitability of the company.

Reporter: What market segments will you focus on this year?

Ştefan Bucătaru: In 2012, we are betting on the infrastructure segment, as well as on expanding our cooperation with the major DIY stores from the domestic and foreign markets.

Reporter: What other steps will you take this year to streamline your operations?

Ştefan Bucătaru: In 2012, "Teraplast" will continue its operational optimization process, with a higher emphasis on profitability, as well as on the development of business within the established parameters. In this context, we will make investments into converting some sectors of production which are contracting towards others which have seen growth and we will outsource some collateral lines of business in order to improve the cashflow and to accelerate the reduction of expenses. The management will also focus on the real estate assets which have become available due to the relocation to the Teraplast Industrial Park being completed, in order to partially support the investment program.

Reporter: "Teraplast" Bistriţa has announced that it has sold the division for the production of ceramic tiles. Are you considering selling off any other assets this year?

Ştefan Bucătaru: "Teraplast" is considering the sale of all the real estate assets which have become available in Bistriţa, after the relocation into the Industrial Park. Last year, the company has concluded contracts and pre-contracts for the sale of real estate assets amounting to 2.3 billion Euros. These financial resources, which will enter the company's coffers in the near future, we will provide additional financing for the projects to optimize the company's operations and increase its competitiveness.

Reporter: Do you have any ongoing projects financed with European funding?

Ştefan Bucătaru: Teraplast currently has a project under way which was co-financed through the European Social Fund, through the Human Resources Development 2007-2013 Sectoral Operational Program, "Invest in people!". The "Effective management, your company's guaranteed road to success!\" plans to achieve the training of the company's staff through improvement/specialization classes, which are intended for middle and top management and will expire in March 2012. The main goal of the project is to grow the culture of performance, by implementing an efficient management system focused on continuously improving processes.

Reporter: What is the state of the company's exports - divided across various lines of business and destinations?

Ştefan Bucătaru: Teraplast predominantly exports thermo-insulating joinery, PVC profiles, granules and corrugated pipes. The main countries to which it exports are Austria, Germany, Slovenia, Slovakia, Ukraine, the Republic of Moldova, Croatia, Bulgaria or Hungary.

Reporter: What are your predictions on how demand for "Teraplast" products will evolve this year and where it will come from?

Ştefan Bucătaru: We are predominantly betting on increased demand in the infrastructure segment, an evolution generated by the access to the European grants available for this sector. On the residential segment we expect a tepid growth. On the other hand we expect the non-residential segment to grow constantly in the next 12 months.

Reporter: Thank you!