The products manufactured in the new unit address the water, irrigation and gas networks.
The investment includes both new buildings and the acquisition of high productivity equipment. To achieve this, TeraPlast submitted an investment project within the state aid scheme.
“The Plastics division registered record results in 2020. For 2020 we estimate a net profit of EUR9 million, four times higher than in 2019, in the context of a turnover of EUR94 million. The increase of the market capitalization reflects this evolution. The projects submitted within the state aid scheme are worth EUR32 million in total and at maturity will generate an EBITDA of EUR8.6 million. By these projects we aim to outweigh the sale of the Steel division which last year contributed by EUR11 million to the consolidated EBITDA. We manufacture in Romania and contribute to even out the trade balance which in 2019 reached EUR17.28 billion. We will create new jobs and respond better to the market demand,” said CEO Alexandru Stanean.
TeraPlast will use the new production unit to manufacture polyethylene products for the Installation business line.
The manholes produced in the new factory ensure access for verification and monitoring of the sewerage networks for domestic water, rainwater and drainage. TeraPlast’s manholes can be used in industrial, residential and agricultural sewerage networks. The polyethylene pipes address the drinking water, general purpose water, natural gas, telecommunications, pressure drainage and irrigation networks.
The implementation of the project will be completed in February 2022 and will create 80 new jobs.
By this investment, TeraPlast commits to contribute to the state budget, by 2027, with salary rights, profit and local taxes in the amount equal to the requested state aid worth EUR4.9 million, in addition to the contributions of the current structure of the Plastics division.
In the first nine months of 2020, TeraPlast Group registered a turnover of EUR167.6 million, up 14% on the year. The group’s EBITDA increased by 46% in the same period, to EUR20.3 million, and the net profit reached EUR12.4 million.
For the whole 2020 financial year, TeraPlast Group estimates EUR225 million in turnover and EUR28 million in EBITDA. The consolidated net profit estimated for 2020 is EUR17 million, double compared with 2019.