Annual Report 2009

Transcription

Annual Report 2009

Annual Report 2009
Think constructively
Annual Report
Contents
Teraplast – leading supplier of integrated systems and solutions for the construction and
installations field
4
Highlights of 2009
6
Statement of the President of the Managing Board
7
Members of the Managing Board
8
Statement of the Chief Executive Officer
9
Members of the Executive Board
10
Business Environment
12
Company Overview
Achievements 2009 and strategy 2013
15
Business units – Teraplast's Systems
16
Corporate activities
23
Human Resources
24
IT – Information Technology
25
Research and Development
26
Marketing
27
Corporate Social Responsibility (CSR) and Public Relations (PR)
Environment Protection
30
Activity of the Managing Board
32
Administrators Report
35
Financial Highlights
36
Risk management
38
Subsequent events
Teraplast's participations
Teraplast shares
39
40
Independent auditor's report and financial statements
Balance sheet
48
Profit and loss account
Statements of cash flow
52
54
Statements of changes in shareholder's equity
56
44
29
Teraplast Group
Annual Report
Teraplast – supplier of integrated solutions in installations, constructions and decorating
The Teraplast Group, including the companies Teraplast, Politub and Plastsitem, intends to
become the biggest supplier of solutions and integrated systems in the fields of installations,
constructions and decorating in Romania and an important player at a regional level. The
projects run in 2009 – continuation of the relocation process, extension of product portfolio
and development of several divisions – will contribute decisive to the achievement of plans on
a medium term.
Teraplast
The company Teraplast is the biggest entity of the Group and comprises five factories which
run activities, such as: production of pipes and PP fittings, production of PVC pipes,
production of profiles and PVC plastified granules, production of window and PVC
thermoinsulating joinery and production of teracotta tiles.
With a view to improving the operational efficiency and reducing the production costs, the
company Teraplast has continued the relocation activities of the production capacities started
in 2008, ending 90% this process. At the end of 2009, the only production unit which was
going to be moved from Bistrita to Saratel was PP (polypropylene) pipes and fittings. All the
other production entities of the company shall be present on the industrial platform from
Saratel, except for the thermoinsulating joinery factory and the teracotta factory.
Politub
The company Politub produces PE tubes and pipes, of medium and high density for the
transport and distribution networks of water, gas, but also for telecommunication, sewage or
irrigations. Teraplast owns 50% of Politub, the other shareholder being the French company
Socotub. The relocation project of the production facilities to Saratel shall comprise the
company Politub, too, the building of the plant is now under construction.
Plastsistem
The company Plastsistem is responsible with the production of metallic structures and
sandwich panels with polyurethane foam, Teraplast’s ownership in Plastsistem being 72,15%.
The company runs its activity in the Industrial Park Teraplast from Saratel.
For 2010 the subsidiary Plastsistem proposed ambitious objectives, being for the third year on
the market as producer. The company targets the second position at a national level as market
margin at panels with PUR and PIR and intends to double its physical volume of production at
panels and structures and metal manufacturing. These objectives, physically quantified, could
lead to an important growth of the financial indices in 2010.
Teraplast
Group
Annual Report
Highlights
of 2009
2009 was a year with many accomplishments in the fields of development and modernization, as a solid
basis for the company's future growth. The 90% completion of the relocation process, but also the
approval of new products took a financial effort for Teraplast, but they will be an important competitive
advantage after the financial crisis has passed.
January:
Teraplast finalized the relocation at Saratel of the PVC profile plant for joinery and constructions, the
investment in this plant mounting to 2 million euro.
The company Teraplast (TRP) decided that the intermediate who will take care of the ransom of
maximum 4,5 million company shares from Bucharest Stock Exchange shall be BT Securities, one of the
5 companies of financial investment services in Romania.
March:
Teraplast ended the rebranding process of the Window Division Orizont. The new brand of
thermoinsulating joinery produced by Teraplast is called TeraGlass.
April:
The General Meeting of Shareholders approved the investment budget for 2009, the value of which is
15,75 million lei, as well as the proposal of the Board of Administration not to distribute dividends from
the profit of 2008.
May:
Teraplast finalized the construction and the technological use of the polyolefin plant, which includes the
sections of corrugated pipes and manholes. The new plant from the Industrial Park in Saratel has 3.500
square metres and an open warehouse with a surface of a hectare. The total investment, in the
construction and use of the plant mounted to approximately 6 million euro, and currently Teraplast is the
only producer of PP corrugated pipes in Romania.
June:
The Board of Administration decided to settle up inside Teraplast a Departament of Research and
Strategic Development coordinated by Marius Albescu. Before being promoted as Research and Strategic
Development Manager, Marius Albescu was Sales Executive Manager.
August:
On August 1st, a part of the activities from the sales department were taken over by the new manager –
Ovidiu Avram, former sales manager Georg Fisher. Starting from January 2010, Ovidiu Avram was
delegated, during a 4 year term contract, all the activities of the sales department, and he is also a
member of Teraplast's Executive Management.
The General Meeting of Shareholders approved on the 13th of August 2009 the supplementing of the
investment program for 2009, from 15.752.429 lei, respectively, 3.663.709 EUR, to 24.655.191 lei,
respectively, 5.866.089 EUR, the money was going to be used to extend the production capacities of the
PVC joinery profile plant.
Teraplast announced Adin Pop's widrawal as manager of the Window Division TeraGlass, as a
consequence of his health problems. Mr. Pop was appointed by the Board of Administration of Teraplast
on the 1st of January 2009.
October:
The Board of Administration of Teraplast decided to appoint Ovidiu Avram in the company's Executive
Management starting with the 1st of January 2010.
November:
Teraplast finalized in November the extension by 60% of the PVC joinery profile plant from the
Industrial Park in Saratel. In order to achieve this growth of capacity the company supplimented the
investment budget for 2009, with almost 2 million euro.
The Board of Administration approved the opening of a new working point in Deva (Santuhalm), DN
7/E 68, Hunedoara county.
December:
Teraplast ended the ransom program of 4.500.000 shares, approved by the General Extraordinary
Meeting of Shareholders from the 11th of December 2008. The total gross value paid by the company for
the ransom of 4.500.000 shares is 1.695.988 lei, which corresponds to a gross price per share of 0,3769
lei. The ransom shares from the market shall be sold to the company's managers at the average
acquisition price.
Annual Report
Statement of the
President of the
Managing Board
Dear shareholders,
In 2009, we were all witnesses of major changes in the world economy, which affected both mature
markets and emerging ones. The financial crisis reached all economy's sectors, including the fields in
which we run our activity.
During 2009, the Board of Administration followed closely the activity of the Executive Management, in
order to achieve all objectives proposed and meet all shareholders' interests.
The figures obtained in 2009 are the result of team work, but also of a natural continuation of
restructuring and modernizing processes run within the last years. The relocation of production
capacities at Saratel generated important operational advantages for Teraplast and contributed
significantly to the consolidation of the company's performances.
According to the commitment towards the company's shareholders, the Board of Administration
agreed with the investment program poposed by the company's Executive Management, even at a lower
level than the one in 2008, given the unfavourable market conditions and the evolution of the
construction market. These negative evolutions, to which we add the necessity to ensure the financing
for the investments planned in 2009, led us to propose the General Meeting of Shareholders not to
distribute dividends from the profit of 2008.
With a balanced financial structure and a careful policy of indebtedness, Teraplast can face the current
market challenges, therefore we shall continue our investment projects in 2010, too. We target especially
the extension of the systems and solutions portfolio, the development of production capacities from the
industrial platform in Saratel and regional extension, the investment program mounting to approximately
21,5 million lei.
The perspectives continue to be difficult, but we are optimistic that in the long run, the construction
market, especially the segment of environment infrastructure has a high potential. Despite the difficult
periods, we are certain that, if we follow our own strategy and continue to have a strict control on costs,
we are on the right path to transform Teraplast in an important player at a regional level. Teraplast has a
professional team and involved shareholders, who allow it to reach successfully the objectives and the
development strategy.
In the name of the Board of Administration of Teraplast, I would like to thank the members of the
Executive Management for the results obtained and to welcome those who joined the management team
in 2009. I would also like to thank all managers and employees of Teraplast, the involvement of whom
made possible the good evolution registered in 2009. We believe that by dedication and continuous effort
of Teraplast's team, we will manage to face successfully the challenges in 2010.
Emanoil VICIU
Annual Report
Members of
the Managing
Board
The company Teraplast is administered in a unitary system by a Board of Administration made up
of seven members elected by the General Meeting of Shareholders by secret vote. The duration of
mandate of the members of the Board of Administration is four years and they can be re-elected.
Emanoil Ioan Viciu – president
Elected inside AGA from June 20th 2008.
Laurentiu Ciocirlan – administrator
Independent member of the Board of Administration
Dorel Goia – administrator
Gheorghe Grosan – administrator
Manager SIF Banat-Crisana Bistrita branch
Magda Eugenia Palfi – administrator
Independent member of the Board of Administration
Alexandru Stanean – administrator
Emmanuel Gerard Marc Tritrent – administrator
Managing Director SAS Franta, company member of the Aliaxis group
Annual Report
Dear shareholders,
Despite the fact that in 2009 the financial crisis affected significantly the main markets on which the
company Teraplast activates, we have registered an important progress in the process of modernizing
and development of Teraplast and we have built on a solid ground the company's future extension. The
results obtained last year are pretty close to what we proposed in the budget of revenues and expenses
approved by the General Meeting of Shareholders for 2009, and this is more important as they were
achieved in a period when we made exceptional investment efforts.
The company's results in 2009 were influenced by the global financial crisis, by the partners' lack of
cash, who have undergone projects with state financing, by the price evolution of the main raw materials
as well as by a series of internal macroeconomic factors, like the depreciation of the national currency.
The efforts related to the company's modernization and development reflected in the significant value
of investments, that is 35,7 million lei. Even if the investment projects in 2009 were carefully prioritized,
the financial results obtained allowed us to invest further in the company's sustainable development.
During 2009, in order to face the effects of global financial crisis, our approach was a strategy to
maintain a low level of indebtedness so as to dispose any time of the necessary resources to run the
relocation program and to develop some business segments, so that Teraplast can be a supplier of
complete systems in constructions, installations and decorating.
Although the investments in relocation, growth of expenses with the approval of new products, as well
as the aggressive competition influenced the company's profitability, we have managed though to obtain
a profit of over 11,4 million euro, and the market share on the PVC tube segment grew from 40% to 43%.
In 2009 we accomplished important objectives from our strategy, both regarding the company's
modernization and development:
l
We ended the relocation at Saratel of the PVC profile plant for joinery and constructions, the
investment in this plant mounting up to 2 million euro.
l
In March we ended the rebranding process of the Window Division Orizont. The new brand of
thermoinsulating joinery produced by Teraplast is called TeraGlass, and during the first six months of the
year we opened several sales showrooms under the new brand.
l
In May we finalized the construction and the technological use of the polyolefin plant, which includes
the sections of corrugated pipes and manholes. The new plant from the Industrial Park in Saratel has
3.500 square metres and an open warehouse with a surface of a hectare. The total investment, in the
construction and use of the plant and warehouse mounted to approximately 6 million euro, and currently
Teraplast is the only producer of PP corrugated pipes in Romania.
l
In November we ended the extension by 60% of the PVC joinery profile plant from the Industrial Park
in Saratel. In order to achieve this growth of capacity the company supplimented the investment budget
for 2009, with almost 2 million euro.
l
We launched into fabrication the following products: corrugated pipes, polyethylene manholes,
inspection chambers, watermeter chambers, polyethylene tanks and septic tanks. The new articles
complete the system of external sewage (Drain System), ensuring all demands imposed for the
management of used, sewage, rain and industrial waters.
The transformation and modernization of Teraplast don't target only the company's activities, but also
its presence in the community. In this context, last year we got involved in several programs of social
corporate responsibility in fields such as sport, environment, culture or humanitarian cases.
We are proud of the achievements from 2009 and we hope that the success obtained is according to
the trust you granted us. I assure you that within the next period we propose to achieve all of our
strategic objectives, so as in the following years Teraplast become a top player in central and eastern
Europe.
Florin URÎTE
Statement of
the Chief
Executive
Officer
Annual Report
Members of
the Executive
Board
Teraplast's Executive Management was delegated by the Board of Administration to a number of
six managers, one of them being general manager. The six managers run the company's daily
activity and shall ensure a correct circuit of the corporate information. The duration of mandate of
the Executive Management's members is four years, starting with the 30th of September 2008,
respectively the 01st of January 2010.
Chief Executive Officer responsible with:
organization, management and administration of
Teraplast's activity, on the basis of objectives and
performance criteria from the Budget of Revenues and
Expenses and the Investment Program approved by
the General Meeting of Shareholders.
Florin Urite
He graduated the Faculty of Machine Construction
Technology from the Polytechnic Institute Bucharest in
1990. He worked as an engineer at IUT Bistrita and
Comelf SA Bistrita and as general manager at Tegro SA
Bistrita. In 1996 he joined the team from Teraplast as
Supply manager, and starting with 2005 he was Sales
manager. From 2006 to September 2008 he was
General Commercial Deputee Manager, and from the
1st of October he was appointed general manager of
Teraplast.
Chief Technical Officer responsible with:
production, investment, maintenance directions and
technical office.
He graduated the Faculty of Mechanics from the
Polytechnic Institute Cluj. He worked as an engineer at
the Mechanic Factory in Alba-Iulia, and in 1991 he
joined the team from Teraplast as an engineer. During
2003 – April 2006 he was Investment and quality
assurance Executive Manager. He was appointed
General Technical-Production Deputee Manager in
April 2006.
Ioan Galea
Chief Financial Officer responsible with: financialaccounting, controlling directions and financingprograms department
She graduated Babes-Bolyai University from Cluj in
1997, as Economist. In 2002 she hired as an economist
at Teraplast, and from 2006, to September 2008 she
was Financial-Accounting Manager. Since October
2008, Mrs. Dana Tatar was appointed by the Board of
Administration Teraplast as Economic Manager.
Dana Tatar
Annual Report
Chief Strategy Officer responsible with: the activity
of marketing, research, system managers and design
office.
He graduated in 1995 the Technical University in
Bucharest, Faculty of Science and Material
Engineering, and in 1998 he graduated the Academy of
Economic Sciences, Faculty of Accounting. He worked
as sales manager Building & Instalation inside Wavin
Romania, and in October 2008 he joined the team from
Teraplast as sales executive manager. On the 1st of
August 2009, Marius Albescu was appointed as
Research and Strategic Development Manager,
direction newly founded in the company.
Marius Albescu
Chief Sales Officer responsible with: direct sales
direction, warehouse sales direction, infrastructure
projects direction, coordinating office for ordersacquisition-production and department of acquisition
for related products.
Ovidiu Avram
He graduated in 2001 the Technical University from
Cluj-Napoca, Faculty of Machine Constructions –
specialization Economic Engineering, and during 20032005 he participated at two programs for professional
development (management of clients relation and
performing management) inside Codecs Romania.
Ovidiu Avram has an experience of over 8 years in the
field of installations and constructions and joined the
team from Teraplast in 2009. On the 1st of January
2010, the Board of Administration appointed Ovidiu
Avram in the company's Executive Management, the
duration of his mandate is 4 years.
Chief Export Officer responsible with the export
department.
She graduated the Faculty of Mechanics, specialization
metallurgical processing at the Polytechnic Institute
Gheorghe Asachi from Iasi. Larisa Popovici joined the
team from Teraplast in 1998, and from 2006 until
September 2008 was Supply Import-Export Manager.
In October 2008, Mrs. Popovici was appointed
Acquisition-Export Manager.
Larisa Popovici
Business Environment
Annual Report
If during the last years the construction market was the main growing motor of the economy, in 2009
this industry dropped by approximately 30%, up to the value of 10 billion euro. For 2010, the Romanian
Association of Construction Entrepreneurs (ARACO) estimates a growth by 1,5-2% of the construction
market, on condition the state should spend more efficiently the money from the budget, attract a bigger
volume of European funds as well as find in due time cofinancing for the projects which already benefit
from EU financing.
The producers of construction materials, who activate on a 5 billion euro market in 2009, are not very
optimistic for 2010, as last year there were falls in sales by 20-50%, according to the field of activity. Last
year's biggest drop, of almost 50%, was registered by the thermoinsulating joinery, followed by a
consumption reduction of 30%. Until 2008, these were the market growing motors, with annual growths
of 20-30%. According to the Association of Producers of Construction Materials (APMCR), the
consumption might grow this year by 2-3%, but only if some of the real estate projects, blocked in 2009
from lack of financing, will restart.
Romania's GDP fell in 2009 by 7,1%, exceeding the analysts' estimates, who were expecting an
economic contraction of 8-8,5%. The fall was determined by the volume reduction of the gross added
value from all sectors of activity and, especially, from commerce, repairing of cars and home articles,
hotels and restaurants, transport and telecommunication (-11,2%) and constructions (-13,6%), the
contribution of which was 31,1% in forming the GDP. The constructions and commerce activities,
repairing of cars and home articles, hotels and restaurants, transport and telecommunication reduced
significantly their volume of activity during October-December 2009, compared to the 4th quarter last
year, by 15,9%, respectively by 12,5%.
The direct foreign investments fell last year to 4,9 billion euro, half of the value registered in 2008,
while Romania's external debt grew in 2009 by 8,7%, to 78,6 billion euro. Although some countries have
already passed the recession, for Romania, coming out of the negative zone is foreseen for the second
part of this year. Most analysts estimate for this year an economic growth of 1-2%, the hopes of
comeback being related to industry and exports.
When it comes to the price evolution of raw materials, 2008 was a year of the extremes. Most of the
raw materials used by Teraplast are based on oil, therefore its extremely volatile evolution in 2009
generated similar price oscillations in the case of raw materials, too.
The Inventories registered a growth of 20% in 2009, up to the value of 28,5 million lei. In June 2009
Teraplast decided to corner raw material (PVC) due to the rise in demand, under the conditions of a raw
material deficit. By increasing the raw material quantity, Teraplast has managed to counteract the price
fluctuation, thus ensuring for itself an important competitive advantage. At the same time, due to the
start of the development of the window PVC profile sales division, the stocks of finished product on this
range have grown in order to offer a wide range of products.
PVC price evolution for 2009
900
800
700
600
500
400
300
200
100
0
Ian
Feb
Mart April
Mai
Iun
Iul
Aug
Sept
Oct
Nov
Dec
Business
Environment
Annual Report
Business
Environment
During the first half of 2009, the PVC price dropped by almost 31%, compared to the same period in
2008. After June 2009 the PVC price started to grow, reaching towards the end of the year a value similar
to that in 2008. The price dynamic was similar in the case of polyolefins (PP si PE), too, the sales price of
which dropped by approximately 30% during the first part of 2009, after which it started to grow,
reaching at the end of 2009 the similar value as in 2008.
PP price evolution for 2009
1200
1000
800
600
400
200
0
Ian
Feb
Mart April
Mai
Iun
Iul
Aug
Sept
Oct
Nov
Dec
The exchange rate had in 2009 a fluctuating evolution, which also influenced the price of the
main raw materials.
Exchange rate evolution leu/euro for 2009
4,3
4,28
4,26
4,24
4,22
4,2
4,18
4,16
4,14
4,12
4,1
Ian Feb Mart April Mai Iun
Iul Aug Sept Oct Nov Dec
Perspectives for 2010
The economic contraction will continue in the first months of the year , a revival being anticipated only
for the second quarter of 2010. Until the economic environment comes back on plus, it shall be difficult,
market by a reduced liquidity.
As for the price of raw materials (PVC, PE and PP), but also the average exchange rate leu/euro i tis
expected to have a fluctuating character in 2010, too. In the case of price evolution of raw materials,
starting with January 2010 there was a growth in sales values and taking into account the market
evolution, it is possible that the growing trend continue, reaching in the summer months price levels
similar to those in 2009.
Annual Report
Achievements in 2009
2009 was an extremely difficult year for the Romanian economy in general and for the construction and
installation markets in particular. Despite the market conditions less beneficial, the company Teraplast
managed to finalize 90% the relocation of its production capacities from Bistrita to Saratel, keeping at the
same time the market shares and obtaining financial results very close to what was established in the
budget of revenues and expenses for 2009.
The first important event in 2009 was the ending in January of the relocation of the PVC profile plant
(joinery and constructions), the investment in this plant reaching 2 million euro. Also, last year, Teraplast
decides to extend the production capacity of the profile joinery plant and invests 2 million euro in this
project.
In May 2009, the company Teraplast registered another important event, that is the finalization of the
construction and technological use of the polyolefin plant, which includes the sections of corrugated pipes
and manholes. The new plant from the Industrial Park from Saratel has 3.500 square metres and an open
warehouse, with the surface of a hectare. The total investment, in the construction and equipment of the
plant and warehouse mounted to approximately 6 million euro, and currently Teraplast is the only
producer of PP corrugated pipes in Romania.
Corrugated pipes factory
Manholes factory
Also, last year Teraplast ran a ransom program of 4,5 million shares from Bucharest Stock Exchange.
The total gross value paid by the company to buy the 4.500.000 shares was 1.695.988 lei. The shares
ransom from the market shall be sold to the company's managers at the average acquisition price.
Apart from achiving important investments, in 2009 Teraplast decided to set up a research and
development department, responsible with the outline of Teraplast's development strategy in the short,
average and long run, both regarding the commercial policy and the development directions from the
point of view of systems and solutions.
The strategy until 2013
Teraplast intends to become the biggest supplier of solutions and integrated systems in installations,
constructions and decorating. The extension of the distribution area, the continuous improvement of the
employees' quality and the portfolio development by launching new articles represent the main means to
achieve the proposed strategy. Teraplast launched and shall develop in the future the “system” concept,
which supposes the reorganization of the portfolio on ranges of additional products, with unique
specialization and destination, offering thus complete solutions and integrated systems to its customers.
At the same time, Teraplast is running a vast investment program, which supposes the relocation of the
production facilities from Bistrita, in the Industrial Park from Saratel. Teraplast's Industrial Park from
Saratel has a total surface of almost 22 hectares and within the next period most of the Group's factories
will be moved and integrated here, including the one owned by the company Politub. An exception are the
teracotta plant and PVC joinery plant, which shall remain in the current locations. The relocation program
will generate the improvement of operational efficiency, the reduction of production costs, but also the
development of production capacities.
Achievements
2009 and
strategy 2013
Business units
Annual Report
Teraplast's
Systems
Water & Gas System
It includes complete solutions for the systems of water and gas utilities and for the irrigation networks.
The main products of this system are: PE pipes; fittings with mechanical clamping; PE fittings with “butt”
assembly; PE fittings with electrofusion assembly, accessories; underground and exterior hydrants; gate
valves and branch ; “Waga” large tolerance manholes ; manholes for watermeter; butt and electrofusion
devices.
In 2009, Water& Gas System registered a sales growth of 41,17%, due especially to sales on projects,
but also by growing sales to small and intermediate customers. The projects for which Teraplast was a
supplier were: ISPA Galati, ISPA Pitesti, rehabilitation works of gas/water adduction in Bucharest; Iasi
(IS); Huedin (BH); Simleu Silvaniei (BH); Singiorgiu de Mures (MS).
Sales evolution Water&Gas System
100,00%
80,00%
82,28%
60,00%
40,00%
41,17%
20,00%
0,00%
-20,00%
2006-2007
-9,20%
2007-2008
2008-2009
The news for this system is the introduction into production of manholes for watermeters, that Teraplast
produces in different configurations and dimensions in order to satisfy the customers' needs.
On the segment of sold products, in 2010 new collaboration contracts will be concluded with famous
producers from Europe in order to extend the range of solutions offered to Teraplast's customers, but also
to face the demands from busy periods.
Annual Report
Teraplast's
Systems
Drain System
DRAIN SYSTEM contains complete solutions for the rain sewage systems: PVC pipes and fittings, PP
corrugated pipes and fittings, manholes, iron caps, flexible tubes for drainage.
In 2009, due to the recession, in which Romania was also involved, the growth of Drain System was
0,88%, including connective products. The company Teraplast managed to maintain the partnership with
a series of important construction companies, and together, they could offer complete solutions for many
national projects like: ISPA Drobeta Tr. Severin, ISPA Arad, ISPA Bistrita, ISPA Baia Mare, ISPA ClujNapoca (phases II – III), ISPA CLUJ, ISPA Piatra Neamt, ISPA Suceava, ISPA Craiova, Bucuresti B1-3,
Maracineni, industrial park Prejmer etc. At the same time, it consolidated the partnerships with the great
retail networks as Ambient, Baumax, Dedeman, Praktiker etc.
Sales evolution Drain System
60,00%
53,11%
50,00%
40,00%
34,24%
30,00%
20,00%
10,00%
0,88%
0,00%
2006-2007
2007-2008
2008-2009
Since 2009, TERAPLAST is the only producer of PP corrugated pipes in Romania, the advantages of
using this type of material being numerous. The corrugated pipes have diameters between 600 mm and
1.000 mm. The new products have technical characteristics according to the standards of the European
market . The PP corrugated pipe is used in the sewage and rain waters or in road infrastructure, offering
special solutions for industry and public sector.
This new product has many advantages compared to other types of pipe with bigger diameters
currently existing on the market (either other pipes of plastic material or concrete pipelines). On one
side, the high stiffness (the PP Terapipe pipes are produced in the SN8 range), which, in terms of high
diameters and burying depths is a very important characteristic, on the other side their flexibility and
ease in assembly.
Corrugated pipes warehouse
Corrugated pipes factory
Annual Report
Another important advantage of the PP SN8 Terapipe corrugated pipes is the flexible joining by the
SAFECONNEC socket, which ensures a perfect seal in the long run. In order to maintain the tightness in
time, the area around the joining is reinforced by welding a rigid band on the socket's outside surface.
Also, the debits which can be run through the Terapipe pipes are 30% more efficient, due to the
internal grown section, compared to the other types of pipes from the market, which ensures an
advantage both from a technical and an economical point of view. In other words, the PP Terapipe pipes
represent the future of sewage networks.
For the buried networks of external sewage of rain, sewage and industrial waters, TERAPLAST
produces, also starting with 2009, PE manholes by the rotoforming technology in a wide range, both as
dimensions and as number of input/output. Teraplast's model of manholes is innovator, resulting many
advantages: possibilities to connection to different angles compared to the axis of the sewage networks (
45;90;180 degrees) eliminating the necessity to use double sockets at connection ; transport and
handling eased due to low weight ;high resistance to corrosion ; high tightness-environment protection ;
rapid installation without special machines ; simple connection and possibilities for subsequent
adjustments ; « fine » adjustment of the manhole's height to the field's bench mark with the ascension
element ; possibility to connect in the same place several pipe diametres (DN110 – DN500); easy
cleaning ; estimated lifetimes over 50 years.
Still by rotoforming, in order to supplement the Drain system, Teraplast produces, starting with 2009,
liquid tanks with the following advantages : high stocking capacities (up to 10 cubic metres); they are the
ideal solution in the areas where there is no sewage; the transport ans handling are very much eased
thanks to reduced weight; high resistance to corrosion; rapid installation without special equipment;
simple connection and possibilities for subsequent adjustment; they represent a solution for the future,
being ecological due to their imperviousness.
In 2010, Teraplast will continue to develop the Drain System by introducing several articles to complete
its current portfolio of manholes and fittings. On the segment of sold products, in 2010 new collaboration
contracts will be concluded with famous producers from Europe in order to extend the range of solutions
offered to Teraplast's customers.
Annual Report
Teraplast's
Systems
Decor System
Decor System – includes PVC profiles for constructions (wainscots, separating walls) and
thermoinsulating panels.
In 2009, Decor system reduced its sales by 17% as a consequence of contracting the construction
material market due to the unfavorable economic context. The lack of liquidities from the residential field
triggered a market orientation towards price attractive products, but with less quality, which led to a
powerful pressure on price. Therefore, a reanalysis of Teraplast's offer was needed and the introduction
into manufacturing of some economic products to allow maintaining Teraplast's market share.
Sales evolution Decor System
30,00%
20,00%
22,05%
10,00%
0,00%
2006-2007
-10,00%
2007-2008
-15,88%
2008-2009
-30,73%
-20,00%
-30,00%
At the same time with introducing into manufacturing the
economic profiles, Teraplast consolidated its position on the market
by signing new contracts with PVC profile distributors based
especially on the distribution in rural areas, as well as by starting
new collaboration contracts with new bricolage retailers who are
going to enter the local market starting with 2010.
Among the projects in 2010 for the decor system is the
introduction into sales of new range of products, the consolidation
of the current customer portfolio and concluding new collaboration
contracts, all these measures are meant to raise Teraplast's market
share on this system.
-40,00%
This year new models and PVC profile shades will be introduced on the market, their introduction being
accompanied by market policies much more aggressive than during the last years, with the aim to raise
Teraplast's market share it currently has.
Clean System
In 2009, the interior sewage system Clean registered a sales drop of only 1,8%, within the context of the
fall of the real estate market and the stop of residential projects.
Sales evolution Clean System
50,00%
40,00%
46,34%
30,00%
20,00%
10,00%
6,96%
0,00%
-10,00%
2006-2007
2007-2008
-1,63%
2008-2009
Most of these sales were achieved through big retail networks,
which address directly to the final customer and by partnership
contracts concluded with big construction material warehouses,
which ensure the distribution of Teraplast's products at a national
level. In 2009 three new products were introduced in the production
of PP fittings.
For 2010, Teraplast proposed the continuous alignment to the
market demands by permanent diversification of the range of
products, in order to satisfy all our customers' demands and needs.
The introduction of minimum threee products is being tried in the
production of PP fittings. When it comes to the commercial part, the
collaboration with the retail networks will continue, but also the
development of distribution by partners and its own warehouses.
Annual Report
Teraglass
TeraGlass – includes the PVC thermoinsulating joinery, which is made with profiles of 4 and 5 chambers,
produced by Teraplast in the PVC profile plant from Saratel. In 2009, Teraplast's Window Division registered
a sales growth of 21%, despite the stop of many residential projects due to lack of financing.
The thermoinsulating joinery plant is located in Bistrita and is not part
of Teraplast's relocation plan, as the unit is newly built, in 2004, and lies
in the town's industrial area. The plant from Bistrita has a production
capacity of thermoinsulating joinery products of over 100.000 square
metres/year. The thermoinsulating glass is also produced in this plant,
the annual production capacity is 120.000 square metres/year.
In 2009, the company Teraplast ended the rebranding process of the
Window Division, started in the fall of 2008. The rebranding was total,
that is, it included both the change of name from Orizont, into
TeraGlass, and the creation of a new logo and a positioning slogan. In
2008, Teraplast finalized the creation part and started the registration
procedures of the new brand with OSIM, and in 2009 there were
implementation and communication activities for the new brand
TeraGlass.
Sales evolution Teraglass
60,00%
50,00%
40,00%
30,00%
33,37%
20,00%
19,52%
21,00%
10,00%
0,00%
2006-2007
2007-2008
In order to impose the new logo and positioning slogan, in 2009 there were multiple communication and
marketing actions for the new brand, through several media channels. The rebranding activities, which
targeted both the signage of its own work points and of Teraglass's partners, registered a positive impact in
the specialized market, which was open to the positioning targeted by the company.
In 2009, due to the loss of market share and even the disappearance of several companies in the field,
Teraglass managed to impose itself not only in the area around Bistrita, but also in the western and
northern part of the country, succeeding an increase in its turnover and market share compared to last year.
To these results contributed the promotions launched by Teraglass, during 2-3 months, well received by the
market.
The Teraglass Division was included in the company's investment program for 2009, by buying the
automatic centres of cutting and PVC processing, supplied by Urban Germany. Developed in order to raise
the quality of the finished product and efficiency, the machines automated completely the cutting
processes, achieving at the same time the optimization of the material consumption. Also, new rod cutting
machines were bought, which function on the basis of measuring the glass rods with radio waves .
Major investments were made at Teraglass regarding the processes and internal organization of production
and warehousing spaces through the Kaizen programme, in which the Window Division was included, too.
In 2009, the Kaizen actions undertaken reached their objectives of more efficient work, improved the
working conditions and achieved ergonomics standards and internal rules.
The market approach in 2009 was concentrated on the extension of its presence in the areas
Transilvania, Banat and Moldova, both by showrooms, repectively sales area representatives and by
authorized dealers. The indisputable quality of products, the wide chromatic range led to important
achievements in sales on an international scale, too. The brand Teraglass also started to become known
abroad, the company sold to the export PVC and Al joinery in many European countries. The plans for
2010, provide the continuation of efforts to extend the exports, the development of partner network and an
intense collaboration with the big profile retail networks (Baumax, Dedeman).
Taking into account the start of thermic rehabilitation programs for apartment buildings, Teraglass involved
actively, managing to form partnerships with many entrepreneurs from the country. Another direction on
which the Division took action was as social support for the communities in the areas where it is present, by
approving joinery sponsorships to state institutions, respectively churches, parsonages.
Starting with 2009, TeraGlass thermoinsulating joinery was done with two types of profiles, respectively
5 chambers and 4 chambers, produced by Teraplast, in the PVC profile plant, on an ecological basis (Ca-Zn
stabilizers). Towards the end of 2009, the 4 chamber products received CE certificates, just like the 5
chamber windows and doors. Extending the profile range will also continue in 2010 with the 6 chamber
profile, necessary as Teraplast targets a wide range of consumers.
From the point of view of the products offered, in 2009, the strategy of the Division covered the orientation
towards a modern palette of ennobling colours, according to the market demands (walnut, mahogany,
golden oak, sepia), registering a growth of the sales percentage in coloured products, compared to white,
in comparison with last years.
A wide range of accessories was introduced in the offer: insect nets (fixed, rolls, swinging), exterior rolls,
ventilation grids. For 2010, the Division intends to develop Al product sales (windows, doors, curtain walls),
of the shade system offer and the start of garage door sales.
2008-2009
Annual Report
Teraplast's
Systems
Profiles system TP 4 5 6
The PVC profile system - includes articles for thermoinsulating joinery, like PVC profiles with 4 and 5
chambers.
In 2008, the joinery profile system grew by 69%, Teraplast's main customers were PVC
thermoinsulating joinery producers. A part of the production of Teraplast's joinery profiles is processed
and sold as PVC joinery, under the brand TeraGlass, with a bigger added value.
Sales evolution TP Profile System
70,00%
69,00%
60,00%
50,00%
40,00%
30,00%
20,00%
10,00%
3,58%
5,04%
0,00%
2006-2007
2007-2008
2008-2009
At the beginning of 2009 Teraplast ended the relocation program of
thermoinsulating joinery profile plant from Bistrita, to the Industrial
Park in Saratel. The relocation supposed an investment of almost 2
million euro, which included the acquisition of new production and
installation machines for utilities.
The PVC profile plant from Saratel includes both the production of
joinery profiles and the production of profiles for constructions. From
the total of profile production lines (joinery and constructions), five
are newly bought machines, the total production capacity is over
10.000 tons annually.
In November 2009, the company Teraplast invested 2 million euro extending 60% the capacity of the
joinery profile plant from the Industrial Park in Saratel. In order to achieve this capacity growth, the
company supplemented the investment budget for 2009. In the new plant from Saratel, Teraplast
produces joinery profiles with 4 and 5 chambers, exclusively ecological, and right now the 6 chamber
system (70 mm) is under technological tests.
By extending the profile range, but also by the logistics development of this division, Teraplast will be
able to access a wider market. The company's strategy on this segment states, apart from a better local
positioning, the entrance on the markets from Central and Eastern Europe, so as in 2010 almost 15% from
production goes to export.
The profile production (constructions and joinery) is made inside the PVC product plant, with a total
surface of 1,24 hectares and which was finalized in October 2008. The PVC pipe production is achieved
here, too.
Corporate activities
Annual Report
Human Resources
In 2009, the Human Resources department had activities meant to add value to the company. All these
activities reflected the policies and procedures established in the human resources strategy and supported
the company's development program.
Main activities of the human resources department in 2009
Ensuring personnel – by carefully planning the people needed on each division in part, as well as
recruiting, selecting and integrating the new employees. The optimum achievement of these activities
generated the growth of management and decision system efficiency. The main recruiting source was
external and the following recruiting methods were used: job announcement on specialized sites, press ad,
head-hunting, announcing vacant jobs on our own site, the procedure « recommend a professional »,
announcements at AJOFM, partnerships with the school institutions in order to hire graduates,
participation at job fairs. In order to integrate as fast and efficiently in the organization, in 2008 there were
65 probation programs.
Training and development – extending the technical and professional competence of Teraplast
employees was also in 2009 a key point in the human resources strategy. Training the personnel was made
both internally and externally. Therefore, during 2009 over 100 employees were involved in 39 training and
specialization courses.
Personnel motivation – was done both by direct and indirect material reward and by professional
promotion. The employees' professional motivation includes the following components: evaluation of
performances, promotion to a higher salary scale, granting of excellence awards, promotion in position and
establishing the sequence plan.
Planning of career sequence – has as main objectives the planning of sequence for the key positions
in Teraplast, occupation with candidates from the inside of these positions and growing the mobility among
departments. According to the strategy, each of the successors for the positions of middle management
runs a program of ”apprenticeship in management”. They benefit from a theoretical training for a period of
several months, but also of practical exposure to develop their manager abilities. In 2009, 5 of Teraplast's
employees got a promotion to a higher salary scale.
Stimulating creativity – is one of the main objectives of the human resources strategy, therefore all
initiatives and creative ideas were awarded by material rewards or by promotion in a higher salary scale.
The survey “Investigating the personnel's satisfaction” – is a program which runs every year and
aims to obtain conclusions on: the personnel's general satisfaction, the way the communication is made
inside the company, the degree of recognition and valorisation of personnel, the satisfaction on the
awarding, the perception on the coherence and competence of management, the conditions and safety at
work, but also on other aspects related to the personnel's satisfaction. Every year the survey was filled in by
approximately 65-73% of the employees, which is a representative sample.
The value of satisfaction factors per departments in 2009
te
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br
ica
PV
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in
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pr
od
.
Te
ra
gl
as
s
fa
br
ica
PP
te
ra
co
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lo
gi
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3,5
3
2,5
2
1,5
1
0,5
0
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i
Corporate
activities
In 2009, the average score obtained was 2.75 points, which indicates a «good» degree of satisfaction of
the company's personnel.
Annual Report
In 2010, the human resources department will continue the proactive approach of all processes in order
to improve its role and work instruments so as the programs run contribute to the development of the
organization.
During the existing crisis, the human resources department will concentrate its efforts to protect the
profit and the company's operational revenues. In this context, measures for a stricter cost control shall be
taken, which target the capital expenses and the budget of extrasalary benefits shall be redimensioned.
The human resources department will continue to implement and administer the performance and
development system, of planning the sequence in career as well as the programs of training and
development planned.
Information Technology (IT)
The IT department facilitates the transformation and modernization of the organization by supplying an
efficient support for the new economic and production processes. Teraplast owns a series of licenses for
business software in order to improve the operational processes and to administer efficiently the
company's activity. At the beginning of 2008, in Teraplast the following programmes were available:
ConnAct and SAP R/3.
ConnAct represents a solution built on the platform IBM Lotus Notes/Domino Server, which facilitates the
transfer of documents inside the company, centralizes them and allows direct access (according to the
access level owned by each user) to all relevant information from Teraplast's activity. This computer
programme has both data base functions and intranet, allowing rapid communication and optimizing the
internal processes related to the transfer of data.
SAP R/3 is a computer programme of administration, analysis and economic planning which offers the
company a competitive advantage as it allows the efficient planning of operations and material or financial
resources. In 2008, in Teraplast the following modules SAP R/3 were implemented: accounting financial,
material management, sales and distribution, cost control, maintenance of installations, production
planning and quality management.
Apart from these, during 2008 the IT department implemented successfully a new programme - Klaes EProd – electronically assisted production. E-Prod ensured the transmission of information to and from the
fabrication lines, coordinating each work station. Therefore, the printed documents are no longer needed
for the administration of joinery execution. The multiple characteristics of the software Klaes E-Prod
triggered the following advantages for the company:
l
Internet acces from all over the world;
l
instant notice of the situation of production lines;
l
automatic introduction of data;
l
individual configuration of each work station;
l
short search time;
l
data on the production stage for each equipment;
l
direct communication with the modules of capacity planning;
l
rapid print of the planning table;
l
archive of the information regarding the work stations;
l
getting the data by bar codes or introducing them by keyboard.
By having implemented this programme, the IT solved one of Teraplast's business challenges, bringing
upon important cost reductions and performance improvement. With the help of the new programme
"The multitude of production files from one shift determines the occurence of some administration
problems, as – by using the classical methods – it was necessary to appoint several persons to
verify/update information and to control the fabrication processes. With the help of E-Prod, one employee
checks/updates the information and controls the fabrication processes. The information is transferred
online to all production lines (cutting, cleaning the surplus after welding, hardware assembly tables,
installations to fix in frame the thermoinsulating window etc.), therefore the responsible needn't walk to
every work station in part.
Information
Technology
Annual Report
In 2009 Teraplast took the decision to upgrade the existing SAP system, from version 4.6C to version
ECC 6.0. This operation was necessary because of:
The need to benefit from the advantage of periodical updating of support packages, especially those
regarding the legislation;
The need to use a standard variant of localization offered by SAP;
The need to benefit from new technical and business functionalities;
The new SAP variant has the following advantages:
Reduction of operational costs
Growth of the control level on business and elimination of losses
Aligning the IT strategy to TERAPLAST's business strategy
Growth of the information quality from the system and of the work efficiency by reducing the number of
errors in the system
In 2010, the IT department proposed to be an active instrument in Teraplast's development and
modernization, too. In this context, in 2010 the extension of functionalities of business model implemented
in Teraplast to the other two companies from the Group: Plastsistem and Politub . The following models
shall be taken in consideration SAP ERP: FI/AA, CO, MM, SD, PP, PM, QM.
Research and
Development
Teraplast is part of the National System of Research-Development and is registered in the Register of
Potential Contractors due to the Research Centre it owns. The research and development programs are
financed both from own funds and from national or European funds. In 2009, the Research and
Development Centre ran activities both in order to improve existing products and to obtain new products.
New recipes for current products:
Obtaining and approving an ecological recipe for the fabrication of PVC rigid coloured (brown) joinery
profiles, with mechanical characteristics and resistance to artificial ageing similar to those of the profiles
with Pb stabilizers.
The study targeted the industrial testing of a recipe with ecological stabilizers (based on Ca-Zn) on
joinery profiles from current fabrication. The results obtained at the lab tests made on the samples taken
from the profiles industrially tested were similar to those of the brown profiles with Pb stabilizers.
The approved recipe, (derived from the recipe for white joinery profiles with ecological stabilizer, by
removing the pigment) allowed the extension of the range from white to brown of the joinery ecological
profiles, being at the same time a starting basis to initiate a study to reduce the material costs.
New products
1.Fat separators
The extension of the range of products manufactured by rotoformation emphasized apart from new
products like the fat separators, products like mini cleaning stations.
Due to the complexity of physical type processes which take place during the functioning of fat
separators, in the European product standards there are installations and procedures to experiment and
certify.
As the standard doesn't state standardized methods of design, but only directory indications, a model of
dimensioning was first elaborated
In the study were designed 2 classes of fat separators with specific constructions, the design system
being elaborated to make possible the subsequent extension of the range of products to higher
dimensions.
Annual Report
The fat separators were designed according to the design manual, meeting the demands of the
European standard SR EN 1825 adopted for fat separators. The basic documentation was supplemented
with the specification, assembly instructions and instructions for putting into function and maintenance
(for the fat separators of type TN1 and TN2).
2.Mini cleaning stations
Mini cleaning stations are products that function according to an ensemble of physical and biochemical
processes, which due to their complexity when it comes to the evaluation of purification capacity in
European standards state installations and metods to experiment and certify.
In a first phase, a class of anaerobic mini cleaning stations was designed with volumes under 2 m3,
meant to function without energy, with efficiency superior to septic tanks.The initial physical model of
process proposed was an original one, it could be protected and, on an estimate, it overcomes
substantially the degree of purification of septic tanks.
Within the study, two classes of anaerobic mini cleaning stations were designed with specific
constructions, the design system making it possible to further extend the range of products to higher
dimensions. The specification, assembly instructions and instructions for putting into function and
maintenance were also elaborated.
Teraplast intends to continue the development of infrastructure of Research and Development, which
will contribute to the extension of experimental activity of the Research Centre. As it happened in 2009, in
2010 the Centre Teraplast shall have both research activities in order to improve the existing products and
to obtain new products.
Marketing
Our strategy is to supply complete solutions for our customers' applications, offering them better
products. In this context, the marketing activities had a special importance, being concentrated in 2009 on
the following main directions:
1.Advertising
Promotion of Teraplast's general image – there were actions and advertising programs to sustain
the image and grow Teraplast's notoriety, as a strong national and regional brand;
The main actions in this direction:
l
advertising on rotative and fixed panels from the soccer stadiums of some important teams from
the Ist League – Romania's soccer championship (FC Rapid, FC Timisoara, FC Vaslui, Farul Constanta,
Gloria Bistrita);
l
supporting the team Gloria Bistrita, as main sponsor; this collaboration included a massive presence
of the logo Teraplast on advertising materials from inside the stadium (panels, meshes) and on other
supports – players' T-shirts, panels from press conferences, club's printed materials etc.;
l
display on its outdoor panels from national/European roads (Bistrita - Cluj-Napoca, Oradea - ClujNapoca);
l
insertions of graphic models in the main national construction catalogs - Infoconstruct and
Mediaconstruct;
sponsorships of major cultural events – the New Year's Eve Concert, Phoenix's Concert;
l
Marketing
Annual Report
Marketing
Promotion of Teraplast's systems and products - there were actions and advertising programs to
sustain Teraplast's systems and products; the main actions in this regard were:
l
insertion of graphic models and advertising articles in specialized magazines: the magazine
“Instalatorul” to promote the new products from the Drain system (PP TERAPIPE corrugated pipes, PE
manholes) and from the Clean system (PE tanks); the magazine “Termopanul” to promote the joinery
profile system TP456; the magazines “Termopanul” and “Fereastra” to promote TeraGlass window and
door system;
l
insertion of advertising models in the partners' promotion magazines- retail networks Dedeman,
Ambient or Praktiker to promote the Drain system Drain (external sewage), Clean (internal sewage) and
Decor (decorating PVC profiles);
l
a program to replace the technical presentation catalogs was initiated, for all existing systems; during
2009 new presentation catalogs were edited and printed for the joinery profile systems TP (4 and 6
chambers), Rain – PVC spouts and funnels, Decor - PVC profiles for decoration;
l
editing and other printed materials: brochures, flyers, posters, special labels, instructions to assembly
products, etc.;
l
TeraGlass: display on outdoor panels and rented meshes in towns with showrooms; printed materials:
presentation maps, brochures, flyers, posters, special labels, instructions to maintain products etc.;
2.Promotional campaigns
In the case of TeraGlass window and door system, in order to support and stimulate sales, a program of
promotional campaigns by seasons was implemented (spring, summer, autumn and winter);
Communicating the promotions was done by:
l
editing and printed materials: posters for our own and dealers' showrooms; flyers for street and
mailbox distribution;
l
media advertising campaigns: radio - national and local networks, press – local publications;
3.Merchandising and Partners' support
l
The program to customize the shelves in the store network Praktiker was continued and finalized Teraplast products from the Drain, Clean and Décor systems;
l
A system to customize the shelves in the store network Ambient was proposed, agreed on and
implemented- Teraplast products from the Drain, Clean and Décor systems;
l
A program to customize was also implemented in the newtork Dedeman - partner with a very
aggressive extension plan – promotion on the Drain, Clean and Décor systems;
l
A series of customized advertising materials for important partners were achieved - banners, light
boxes etc.
4.Participations to fairs and exhibitions
In the context of the generalized economic crisis from 2009, the promotion activity by participating to
fairs and exhibitions was limited to two events: the Exhibition Ambient Instal from Cluj-Napoca in
February and the Exhibition Bistrita Construct, organized in May.
5.Press monitoring, studies and analyses
Monitoring the competition is a continuous activity which materialized by updating the competition's
files on each system of products; market surveys were also initiated in order to identify the trends and
opportunities on all market segments interested to Teraplast, inside each system of products.
Annual Report
Communication/Public relations
Within the context of listing at Bucharest Stock Exchange, the constant communication with the massmedia and the investors is extremely important to Teraplast, therefore in 2008 it was decided to introduce
in the company's organization chart the Department of Communication and Relationship with the
Investors.
The necessity to outline a coherent image, which should emphasize the company's reputation and the
importance Teraplast gives to the communication process determined the Board of Administration to
introduce this function in the organization chart.
The main responsibilities of the department of Communication and Relationship with the Investors are
the development of the communication function inside the group Teraplast and the establishment of the
communication and image strategies on all business lines.
In this context, in 2009 Teraplast transmitted over 14 press releases, by which it announced the new
development projects or the evolution of financial results.
The company's management also had many meetings with analysts and investors, the latter having the
opportunity to visit the new industrial platform Teraplast from Saratel, but also to discuss in detail the
company's evolution and the projects announced.
The company Teraplast (TRP) was listed at BVB on the 2nd of July 2008 and, from the beginning, it
proposed to ensure the investors' equal and constant access to all the company's relevant information.
The projects for 2010 state the development of the communication component on all segments. In this
context, Teraplast will continue to transmit coherently, completely and transparently to mass-media and
investors all information regarding the events which take place inside the company.
Corporate social responsibility (CSR)
Teraplast pays a special attention to the community where it runs its activity and supports the initiatives
which aim to the active involvement in community life. The amount alloted by the company last year to CSR
programs and sponsorships was 160.000 euro.
Social responsibility is an important part of Teraplast's business strategy, permanently identifying the
social problems the community deals with.
Main CSR programs developed in 2009:
The main CSR programs were based both on the company's internal culture and on external activities.
Taking into consideration the importance of Teraplast in local community, being responsible means running
activities which in the long run generate the shareholders' and company employees' welfare. In 2009, the
main directions of Teraplast's involvement were:
Teraplast's employees
Sport
Local communities
Environment
“Teraplast's Day” – a program destined to the company's employees and their families. The event took
place on the 12th of September as an outdoor party, where 1.000 persons participated. At this informal
event the management granted excellence awards, a soccer championship and many activities for the
employees' children were organized.
The company Teraplast also got involved in many social projects to financially aid disadvantaged persons
or local communities. Therefore, the Group Teraplast donated 90.000 lei for the reconstruction of the
Evangelical Church, a historical monument symbol for Bistrita.The edifice, dating from the XIVth century,
was almost destroyed by a fire, in June 2008, and the reconstruction process will take important
investments in the following years.
Also, in 2009 the Teraplast joined the project the Paper Tree, initiated by the foundation MediaOrg.
According to this collaboration,Teraplast's employees collect the paper used in the company and
Teraplast's logistics department ensures the transport of the paper to MediaOrg centre from ClujNapoca.During the partnership, Teraplast's employees collected over 300 kg of paper, ensuring thus the
plantation of 30 trees. Besides, the company Teraplast contributed to the financing of the current activities
of MediaOrg centre from Cluj-Napoca.
Perspectives for 2010:
The CSR plan in 2010 states the running of new programs of social involvement, which will target
especially employees, children and local communities. All these CSR programs will be done under the
platform “We think constructively the present, for the future” and therefore we want Teraplast to become a
model in terms of corporate social responsibility.
Corporate Social
Responsibility
(CSR) and Public
Relations (PR)
Annual Report
The main activity of the company Teraplast has inherent effects on the environment. These effects are
monitored carefully by the local authorities and by Teraplast's management.
The preventive approach and the orientation to reduce
the impact on the environment are elements which guide
the company's activity, therefore in order to run its
production processes, Teraplast obtained:
l
Environment authorization to produce plastic panels,
foils, tubes, profiles and plastic articles for constructions in
the production unit from Bistrita, 17A Romana street and
Sieu Magherus, Crainimat village DN15A (industrial park
Saratel);
l
Environment authorization to produce PVC joinery
elements with thermoinsulating glass at its production unit
from Bistrita, 27/A Tarpiului street;
l
Integrated environment authorization for the production activity of teracotta tiles and bricks, in Bistrita,
17A Romana street. The authorization was extended on October 30th 2007 for a period of 10 years. For the
other locations, the company doesn't need integrated environment authorization.
The company meets the demands regarding the protection of atmosphere in all locations where it runs
its activities. Teraplast obtained the authorization no. 17 from December 29th 2007 regarding the
emissions of greenhouse gases for the activity of burning teracotta tiles and bricks in Bistrita, 17A Romana
street. The authorization has no valid term, being in effect as long as the data at its basis don't modify.
The company obtained authorization for water management for the teracotta section from Bistrita, 17A
Romana street, which is valid until October 22nd 2017.
Also, the companies Teraplast involve actively in saving resources, by the eficient use of energy,
encouraging recycling programmes, reducing emissions from industrial processes, reducing the quantities
of waste and improvements on their evacuation facilities.
The relocation of the production facilities from Bistrita to Saratel will generate, apart from the operational
advantages an important component of environment protection, in the conditions where all production
facilities were built taking into consideration the environment standards.
Activity of the Managing
Board
Annual Report
Main activities:
Teraplast SA is a company which supplies complete solutions and systems in installations, decorating
and constructions, which runs its activity mainly in Romania.
Corporate Governance
Teraplast implemented voluntarily the recommendations from the Code of Corporate Governance of
Bucharest Stock Exchange, which establishes the governance principles and structures, aiming mainly at
respecting the shareholders' rights as well as ensuring them a fair treatment. In this regard, the Board of
Administration elaborated the Rules of Organization and Functioning, which are according to CCG
principles, ensuring thus transparency as well as the company's sustainable development.
The Rules of Organization and Functioning establish at the same time the functions corresponding to the
Board of Administration, its competence and responsibilities so as to ensure the respect of interests of all
company's shareholders and, last but not least, their equal access, but also of the potenial investors, to the
company's relevant information.
Structures of Governance
In order to continue the process of principle implementation of the Code of Corporate Governance, the
General Assembly of Shareholders from the 20th of June 2008, approved to choose a new Board of
Administration made up of 7 administrators, of whom one is independent from the significant
shareholders. In this regard, a sufficient number of members was ensured to guarantee the Board's
efficiency to survey, analyze and evaluate the activity of Teraplast's executive management. The Board's
main objective, as a collective body, is to promote and respect the interests of the company's
shareholders.
The next step of the implementation process is the substantial modification of the company's
Constitutive Act, approved by the General Meeting of Shareholders from the 16th of September 2008,
occasion when the provisions of the constitutive document were harmonized with the normative
documents specific to the capital market in Romania, but also to the recommendations and principles from
the Code of Corporate Governance of Bucharest Stock Exchange. One of the most important updating of
the company's statute is the modification of chapter VI – Managers – according to which the premises of a
fundamental change in the company's management structure are created, allowing thus the Board of
Administration the possibility to delegate its management competence not only to a unique manager, but
to a greater number of managers, appointing one of them general manager.
Also, in accordance with the recommendations from the CCG, strict rules were established regarding the
internal circuit and the disclosure to third parties of classified documents and privileged information,
giving thus a special importance to the data and/or information which can influence the evolution of the
market price of the securities issued by Teraplast. In this regard, in 2008 specific confidentiality contracts
were concluded, both with the administration, the company's executive management and the employees
who, according to their positions and/or competence have access to such classified/privileged
information.
The members of the Board of Administration
The members of the Board of Administration were elected on the 20th of June 2008, at the proposal of
Teraplast's most significant shareholders.
Therefore, the Board of Administration of Teraplast is made up of seven members: Emanoil Viciu
(President), Laurentiu Ciocirlan (Administrator), Dorel Goia (Administrator), Gheorghe Grosan
(Administrator), Magda Eugenia Palfi (independent administrator), Alexandru Stanean (Administrator)
and Emmanuel Gerard Marc Tritrent (Administrator).
Activity of
the Managing
Board
Annual Report
The members of the Executive Management
The current component of the Executive Management is the result of changes approved by the Board of
Administration and the General Assembly of Shareholders during 2008 and 2009, with the aim to
consolidate the structures of corporate governance. As a consequence, on the basis of the modifications
made to the Constitutive Act on the 16th of September 2008, the Board of Administration delegates
management competence to a number of 5 managers, and at the beginning of January 2010, a new
manager was included in the company's executive management.
Therefore, Teraplast's executive management is made up of six managers: Florin Urite (general
manager), Ioan Galea (technical-production general deputy manager), Dana Tatar (economic manager),
Marius Albescu (research and strategic development manager), Ovidiu Avram (sales manager) si Larisa
Popovici (acquisition-export manager). Their biographies can be seen in the section dedicated to the
Members of the Executive Management.
The Activity of the Board of Administration
In 2009, the Board of Administration met monthly, all administrators participated at its meetings, on the
agenda being points related to the rules of functioning of the Board of Administration and the Executive
Management and points on Teraplast's extension and development.
The Board of Administration of Teraplast was permanently informed on the current important activities
of the company. As an oversight body, the Board of Administration registered the investments made and
their effects and approved the new investment projects.
Apart from periodic decisions, like adopting the financial situations for 2008 of the Group Teraplast, in
2009 the Board of Administration took decisions regarding important aspects for the company, like:
l
Selling to Plastsistem a land of 3.500 square metres on the industrial platform from Saratel;
l
Setting up several work points in the country;
l
Supplementing the constitutive act by introducing 2 CAEN codes, respectively, 3811 – collecting
dangerous waste and 3832 – recovering sorted recyclable materials;
l
Setting up the Department of Research and Strategic Development coordinated by Marius Albescu;
l
Revising the budget for 2009 of the Window Division TeraGlass and stopping the opening of new
showrooms until the existing ones will have been consolidated;
l
Supplementing the investment program for 2009, from 15.752.429 lei, respectively, 3.663.709 EUR, to
24.655.191 lei, respectively, 5.866.089 EUR.
l
The plan to distribute 4.500.000 shares, ransom from Bucharest Stock Exchange, which shall be sold to
the company's executive managers at the average acquisition price;
Annual financial situations and dividends
After the discussions with the auditors, the Board of Administration checked the administrators' report
and the company's financial situations for 2009, made according to the Law of commecial companies no.
31/1990 (with subsequent modifications) and the Law of the capital market no. 297/2004. The Board of
Administration will popose the General Meeting of Shareholders from Teraplast not to distribute dividends,
almost all of the profit for 2009 was going to be reinvested.
The external audit
In order to protect the company's interests regarding financial reports, internal control and risk
administration, the General Meeting of Shareholders, upon the proposal of the Board of Administration,
approved that the company be submitted both to financial and internal audit. Therefore, on the 10th of
December 2009, AGA reconfirmed in function the financial auditor S.C. Deloitte Audit S.R.L. and the
internal auditor S.C. PriceWaterhouseCoopers Audit S.R.L.
Administrators Report
Annual Report
Administrators
Report
The financial results obtained individually by Teraplast in 2009
Key performance indicators
2008
2009
▲%
EBIT, RON thousand
25.470
10.807
(57)
EBITDA, RON thousand
33.687
20.993
(38)
Net profit, RON thousand
19.322
7.749
(60)
Net turnover, RON thousand
194.916
188.255
(3)
Net cash generated by operating activities, RON thousand
13.076
7.153
(45)
Cash and correspondents in cash at the end of the financial year
Investments, RON thousand
9.006
44.450
2.760
37.445
(69)
(16)
540
541
0
Average number of employees
In 2009, the expansion and modernization process of Teraplast continued according to the established
plan. The result of the financial year was good, in spite of the negative impact generated by the instable
business environment, by the pronounced gap of liquidity, by the price wave for the raw materials and by
the instability of the inland currency (under the conditions of an important rise in imports volume, to
assure the raw materials necessary for the company).
The total investments in 2009 were RON 37.7 million, being 20% lower than last year, when the total
investments accomplished by Teraplast had the value of RON 44.5 million. The 2009 investments were
highly prioritized and only the investments without a major impact on the company's technical-economical
parameters were delayed. So that Teraplast finalized, in proportion of 90%, the production capacities
relocation, from Bistrita to Saratel.
Teraplast develop since 2007 an ample plan of investments, which means the relocation from Bistrita, to
Saratel for the majority of the production capacities. The company develops to Saratel an industrial park
with a surface of 22 hectares.
Profit and loss account
Profit and loss account, in RON thousand
▲%
2008
2009
194.916
188.255
6.634
2.681
Own work capitalized
2.132
4.602
116
Other operating revenues
2.680
783
(71)
TOTAL operating revenues
206.362
196.321
(5)
Raw materials and consumables expenses
100.116
97.026
(3)
793
1.266
60
Utilities expenses
5.652
5.639
-
Expenses with goods
27.189
29.753
9
Personnel expenses
27.085
24.704
(9)
4.529
11.310
150
Net turnover
Movements in inventories
Other materials expenses
Adjusting the value of assets
Other operating expenses
(3)
(59)
15.528
15.816
2
180.892
185.514
3
Operating profit
25.470
10.807
(57)
Financial result
-3.725
-2.758
26
Gross profit
21.745
8.048
(63)
TOTAL operating expenses
Net profit
19.322
7.749
(60)
EBITDA
33.687
20.993
(38)
The company's net turnover in 2009 was accomplished in proportion of 97%, related to 2008. Getting
this value is very important considering the decrease in demand, in the context of the economic crisis. So
Teraplast's financial evolution in 2009 was over the main markets where the company is present, which
have dropped by at least 20%. Besides that, the company obtained even a growth from 40% to 43%, in
the market share of the PVC pipes segment, one of the main business domains for Teraplast.
Annual Report
The net profit of Teraplast has dropped by 60% in 2009, being influenced by the rise of expenses with
depreciation afferent to the investments put into function, by the relocation costs (the relocation of the
factories was realized in proportion of 90%, without effecting the market share), by the rise of the
expenses with homologation for the new products, by the rise of expenses with goods and external supply
expenses. In addition, in 2008, a major positive influence in the company's profit was the reversing of
some provisions created in the previous years (3.817 RON), while in 2009 there were created extra
provisions. The aggressive competition was another factor that has strongly affected the company's
profitability. The explanation for this situation is given by the fact that in 2009 the demand was smaller, and
within this context there was applied a stronger pressure over the sale prices on the market.
In 2009, the operating revenues have dropped by 5% compared to 2008, mainly because of the
decrease in turnover, in revenues with inventories of finished products, which was generated in 2008 by
the process of relocation, and in the context of the decrease in other operating revenues, such as the
revenues from penalties obtained in 2008 from Drossbach Germany as a result of the delay in delivering
the corrugated pipes line.
Withal, the operating expenses were in sum of 185,51 million RON, higher by 3% than the amount in
2008. Under these conditions, the operating result has registered a decrease of 57% compared to the
value registered at the end of 2008.
The financial activity of the company has materialized in financial revenues in sum of 1,99 million
RON, whose decrease by 48,58 % compared to the previous year is due to the decrease of the revenues
from interests, based on the use in 2009 of the sums from the IPO, and in financial expenses in sum of 4,76
million RON, whose decrease by 37,51 % is due mainly to the reevaluation at the end of the year of the
debts in foreign currency at an exchange rate higher by 6,09% in 2009, compared to an increase of
10,38% in 2008.
Balance sheet
Balance sheet, in RON thousand
ASSETS
A. TOTAL noncurrent assets
2008
2009
127.304
150.553
I. Intangible assets
1.550
1.826
II. Tangible assets
116.352
139.326
III. Financial assets
9.401
9.381
B. TOTAL current assets
73.361
84.302
I. Inventories
23.837
28.565
II. Receivable
40.349
52.597
III. Short term investments
169
380
IV. Cash and bank accounts
9.006
2.760
C. Prepayments
33
577
TOTAL ASSETS
200.698
235.412
140.754
144.264
Payables in more than one year
22.903
17.752
Provisions
2.443
2.783
34.598
70.613
SHAREHOLDERS EQUITY AND LIABILITIES
Shareholders' equity
TOTAL current liabilities - of which:
Interests bearing liabilities
8.435
37.197
Trading liabilities
23.702
30.071
Other liabilities
TOTAL SHARE CAPITALS AND LIABILITIES
2.461
3.345
200.698
235.412
The total assets were in sum of 235,41 million RON, in increase by 17,29% compared to 2008, mainly
because of the increase of fixed assets. The tangible fixed assets have raised by 19,74%, as a result of the
continuity of the investment programme in relocating the main production capacities from Bistrita to
Saratel.
Annual Report
Administrators
Report
The current assets have increased by 14,91%, and they reached the value of 84,30 million RON,
mainly due to the increase of inventories (20%) and accounts receivable (30%).
The total passives were 235,41 million RON, in increase by 17,29% compared to the last year. The
evolution of the passives is due mainly to the increase of current debts (104%) and shareholders' equity
(2,50%).
Risk factors
Risk management
Credit risk
Credit risk refers to the risk that a third party will not respect the contractual obligations, causing
financial loss to the company. The company adopted a policy to make transactions just with trustworthy
partners and to obtain adequate warranties, when necessary, as a mean to reduce financial loss risk
caused by a failure to comply with the contracts. The management board monitors the company's
exposure and the partners' credit rating.
Commercial account receivables consist in a large number of clients, from various industries and
geographical regions. The company makes a continuous evaluation of the credit, considering the financial
condition of the clients, and credit insurance is done when necessary.
The company has no significant credit risk exposure towards a counterpart or a group with similar
characteristics. The company considers that a counterpart has similar characteristics when it is an
affiliated entity.
Liquidity risk
The final responsibility for liquidity risk management belongs to the executive board, which built a
suitable framework for liquidity risk management, in order to ensure the company's necessary funds for
short, medium and long term and also to comply with the requirements concerning liquidity management.
The company manages the liquidity risks by maintaining adequate reserves, bank facilities and reserve
loan facilities, by a continuous track of the real cash flows and by a correspondence between the maturity
profile of the financial assets and debts.
Interest rate, exchange rate and inflation risk
The company benefits of a variable interest rate for both long and short term credits. The board
continuously tracks the interest rate risk.
The company makes transactions in various currencies, including euro or US dollars. The activity and
results are exposed to the exchange rate variations for these currencies. The exchange rate in 31
December 2009 was 2.6413 RON for 1 USD (2.8342 in 31 December 2008) and 4.2282 RON for 1 EUR
(3.9852 in 31 December 2008).
Annual Report
Teraplast's participations
Teraplast detains participations in the Politub and Plastsistem businesses. The three firms compose
Teraplast Group. The company Teraplast detains a participation of 72,53% in Plastsistem, obtained in
2008 by share acquisition and by two capital increases. In Politub, Teraplast's participation is 50%, the rest
of the shares being detained by French company Socotub.
At December 31st 2009 Teraplast's participations were the following:
Plastsistem
Politub
Teraplast's
participations
Teraplast shares (TRP)
Annual Report
Teraplast's shares
Shareholding
The company Teraplast ran during the 7th-17th of April 2008 a primary initial public offer of shares, with
allocation rights attached, in order to be listed at Bucharest Stock Exchange. The number of shares offered
was 49.645.980 titles, the selling price of one share being 1 leu.
After having successfully completed the primary initial public offer of shares, the capital of Teraplast
grew from 24.822.990 lei, divided in a number of 248.229.900 nominal shares, to 29.787.588 lei, divided in
a number of 297.875.880 nominal shares, with a nominal value of 0,1 lei/share. Teraplast's issue bonus
was 44.681.382 lei.
Shareholding structure on the 31st of December 2009:
Shares
In 2009, the BET- C (BET Composite) index, which includes the shares of all companies listed at BVB,
except for the Financial Investment Companies (SIF), reached the lowest level from the last five years and
a half, and in March it represented 17% from the maximum value reached in July 2007. Until June 2009 the
BET-C index recovers over 60%, some of the shares coming back spectacularly.
The evolution of Teraplast's share course
Teraplast
shares
Annual Report
Teraplast
shares
Since April 2008, Teraplast's capital is 29.787.588 lei, divided in a number of 297.875.880 nominal
shares, with a nominal value of 0,1 lei/share.
Symbols for Teraplast shares
Bucharest Stock Exchange
TRP
Reuters
Teraplast's shares – in figures
TRPS.BX
2008
2009
Number of shares
297.875.880
297.875.880
Stock capitalization, lei
119.150.352
184.683.046
Stock capitalization, euro
30.314.299
43.923.002
Maximum price, lei
1,09
0,64
Minimum price, lei
0,355
0,208
Price at the end of the year, lei
Gain/share, lei/share
0,4
0,0652
0,62
0,0383
The General Meeting of Shareholders
Teraplast's General Meeting of Shareholders from the 23rd of April 2009 approved financial situations for
2008, statutary and consolidated, but also the investment program for 2009, the value of which is
15.752.429 lei.
Teraplast's General Meeting of Shareholders from the 23rd of April 2009 approved the main indices of
the budget of revenues and expenses for 2009 and the distribution of the net profit for 2008.
The General Meeting of Shareholders approved on the 13th of August 2009, the supplementing of the
investment program for 2009, from 15.752.429 lei, respectively, 3.663.709 EUR, to 24.655.191 lei,
respectively, 5.866.089 EUR.
The General Meeting of Shareholders from the 10th of December 2009 approved the Budget Project of
Revenues and Expenses for 2010.
The General Meeting of Shareholders from the 10th of December 2009 approved the Project of
Investment Program for 2010, the estimated cost of which reached 21.499.871 lei, respectively
4.999.970 EUR.
The General Meeting of Shareholders from the 10th of December 2009 chose PricewaterhouseCoopers
as Teraplast's internal auditor and Deloitte Audit as financial auditor.
The General Meeting of Shareholders from the 10th of December 2009 approved the plan to distribute
4.500.000 shares ransom from Bucharest Stock Exchange. These shares will be sold to the members of the
Executive Management at the average acquisition price and according to criteria established by the Board
of Administration.
Relationship with the investors
Teraplast organized in 2009 several meetings, where analysts and investors had the opportunity to
discuss directly with the company's management.
Besides these meetings, Teraplast offered all investors and analysts interested, the possibility to visit the
industrial platform from Saratel, where they could discuss directly with the company's management and to
see the investments made by the company.
Dividends
The Board of Administration decided to propose the General Meeting of Shareholders from the 29th of
April 2010, not to distribute dividends from the profit for 2009.
Annual Report
Own shares
During 2009, Teraplast bought 4.500.000 of its own shares. The total gross value paid by the company
to buy 4.500.000 shares was 1.695.988 lei, which corresponds to a gross price per share of 0,3769 lei. The
ransom shares from the market will be sold to the company's managers at the average acquisition price.
All important and necessary information for shareholders and analysts regarding the company's activity
are posted on the site www.teraplast.ro, section Shareholding.
Financial Calendar 2010
Event
Presentation preliminary annual results
Date
11th of February 2010
Publishing of Annual Report 2009
29th of April 2010
General Meeting of Shareholders
29th of April 2010
Presentation of results for I quarter
Presentation of results for I semester
Presentation of results for Jan-Sept 2009
13th of May 2010
12th of August 2010
11th of November 2010
Teraplast
shares
Auditor's report
Teraplast S.A.
Industrial Park
Sărăţel

Annual Report 2009

Transcription

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