AMID SHRINKING COSTS, Profit of "Teraplast" Bistriţa increased 41% in 2010

• The company expects the price of raw materials to increase this year, as well as the infrastructure sector to grow due to the need to absorb European grants

"Teraplast" expects the price of raw materials to follow an upward trend this year. According to the company, "this process is the result of the rising prices of commodities derived from oil, ethylene and propylene on the domestic market".

The company also expects the infrastructure market segment to grow this year, due to the need to absorb European grants available for this segment. "If we do not accomplish as many environmental infrastructure projects as possible in 2011, we will miss our chance to modernize our water and sewer grids using grants", the press release states. The company also expects a modest growth on the residential segment, at best in the second half of 2011, and it expects the non-residential sector to post a slight growth starting in the first half. "There are already signs that major non-residential projects will be unfrozen this year", the press release adds.

At the end of 2010, the turnover of "Teraplast" Bistriţa had increased 13% to 212.3 million lei, up from 188.2 million lei in the previous year. The company"s net profit increased 41% last year, from 7.7 million lei to 10.9 million lei, mostly due to cost cutting, since price was the determining factor in purchasing decisions.

The company had an operating profit of 11.2 million lei, up 4% from 10.8 million lei in 2009. On the financial side, the company cuts reduced its losses over 20 times, from 2.7 million lei to 13,000 lei.

Last year, the company invested 18.9 million lei, almost half of the investment expenses of 2009, which amounted to 37.4 million lei. The investments mostly went towards the development of the Teraplast Industrial Park of the town of Sărăţel, in the county of Bistriţa, as well as towards expanding the system portfolio.

According to the press release, the company spent 26 million Euros on its relocation, between the beginning of the plants of Sărăţel and the effective relocation. "Given the latest technology and adequate production capacities, we plan to expand the development of the Teraplast systems, so we can offer complete solutions to our customers and partners", said the managing director of the company, Florin Urîte. "It was a difficult year, especially since banks withheld funding for private projects, as well as due to the trouble that state institutions had in accessing co-financing for public projects. In spite of all this, we succeeded in getting good financial results, meeting our budget targets set in the beginning of the year, and even more, we succeeded in relocating all our production capabilities of Bistriţa to the town of Sărăţel", the aforementioned source said in the communiqué.

The company saw its receivables increase last year, as the payment terms lengthened, as well as due to market liquidity, as the state budget was slow in allocating public funds for public works. Thus, at the end of 2010 receivables amounted to 68.5 million lei, up 33.5% higher than in 2009, when they amounted to 51.3 million lei.

Teraplast is part of the Teraplast Bistriţa Group, which also includes subsidiaries Plastsistem and Politub.

The main shareholders of the company are Dorel Goia (34.26%), SIF Banat-Crişana (10.48%) and the chairman of the Board of Directors, Emanoil Viciu, (10.15%).