Crisis Delays Teraplast Scheduled Investments

Bursa: How is Teraplast affected by the financial crisis? What steps will you take to cut costs?

Florin Urite: Lack of liquidities is the most obvious effect of the financial crisis. Consequently, demand has been decreasing. In this context, Teraplast will maintain a low leverage, so that the Group may rapidly obtain the resources necessary to benefit from expansion opportunities. Our objective is to become a top player in Central and Eastern Europe. Generally speaking, we are focused on a restrictive and pragmatic approach to cash flows, optimized production capacity and careful evaluation of all financing sources.

Bursa: What can you tell us about investments on foreign markets?

Florin Urite: Regional expansion and, implicitly, the increase of our sales on foreign markets are important components of our medium-term strategy. Ukraine, Serbia and Bulgaria are the main markets we intend to tap in the next 2-3 years.

Bursa: How would you comment on the depreciation of TRP shares on the capital market? Does this depreciation reflect the company"s actual status?

Florin Urite: The increase or decrease of the Teraplast quotation on the Bucharest Stock Exchange does not reflect and does not influence the development of our company"s financial indicators. The fluctuation of Teraplast shares on BVB has been in line with the rest of the market. That is, there were some declines, too.

Bursa: What is the status of the project to rectify investments in order to relocate and expand production capacities?

Florin Urite: The investment programme announced in the first half of last year has been slightly modified. Some of the investments scheduled for last year have been postponed for this year. The rescheduling was done in such a way as not create a major impact on the technical and economic parameters targeted for 2008. For instance, we postponed the construction of an administrative building, because the current location is optimal. On the other hand, the relocation of the production capacities is in full progress and we do not anticipate any financing problems for these projects because we are using our own capital plus solid collateral, which makes us confident that we are eligible for borrowing.

Bursa: What can you tell us about the buyback of TRP shares from the Stock Exchange?

Florin Urite: We have just signed an agreement with BT Securities, which will broker the buyback of Teraplast shares from the Bucharest Stock Exchange. The Board of Directors is to decide the actual start of the buyback process. The Extraordinary General Meeting of Teraplast Shareholders held on 11 December 2008 approved the buyback of up to 4.5 million shares from the capital market. On the same occasion, the shareholder also decided that the maximum buyback price should be 0.89 RON/share. The funds will come from the company"s reserves, other than the legal reserves. The buyback period will be up to 272 days from the start of the process.

Bursa: What will be your strategy for this year compared to 2008? What are your objectives for 2009?

Florin Urite: Our main objectives for 2009 are to finalize the relocation of the Teraplast factories from Bistrita to Saratel, where we are currently developing a 22 hectare industrial park. We also plan to diversify our product portfolio and to develop our Windows Division. The Teraplast commercial strategy for the Windows Division is to tap all segments of the PVC market: residential, office and construction projects, both through our dealers and a proprietary sales network with operational sites in the main cities. We currently have six showrooms, in Targu Mures, Bistrita, Cluj, Brasov, Oradea and Baia Mare. This year, we plan to be present in most of the important cities in Transylvania, Banat and Moldavia.