2009 Annual Report - Rompetrol.com

Palplast
2009 Key Achievements:
• improvement of HDPE polymer properties, in order to realize HDPE
granules for pressure applications (pipes).
• reduced logistic costs through redesigning the packing of products. The
total transport cost was reduced with approx 25%).
• decreased of technological waste from the pipe manufacture process,
from:
• 1.98% in year 2005
• 0.91% in 2008
• 0.47% in 2009
• direct distribution increased by 23,68%, versus 2008, by developing
distribution in order to enlarge the product range: compression fittings,
electro-fusion fittings, irrigation coupler, flanges, welding machines.
• designing and equipping the stationary welding machines with
adaptors enabling the company to produce fittings with bigger
diameters.
Palplast produces a complete range of high-density polyethylene
pipes and fittings with applicability in the fields of distributing
water, gas, crude oil, sewerages and protection of optic fiber
cables.
Besides these products, Palplast offers irrigation systems through
sprinklers and dripping, as well as through joining services or
rehabilitation of the centralized irrigation systems.
The general market conditions, influenced by the international
economic crisis, have caused major changes in the activity of
all economic agents. Regarding the pipe manufacturers, the
companies have adjusted their business strategy according to
the evolution of the market demand, the size of the infrastructure
projects, as well as the price of raw materials and the production
cost.
In 2009, Palplast Sibiu expanded the production activity of
optical fiber protection tube, in addition to carrying out water
and sewage infrastructure projects. Thus, the company delivered
specific optical fiber protection products in projects carried out
in Cluj and Arad. Although the segment of infrastructure projects
experienced a significant decrease in 2009, the company supplied
products amounting to over USD 1,500,000 USD within drinkable
water supply and sewerage projects, as well as the rehabilitation of
irrigation systems in the central and south regions of Romania.
In addition to these achievements, the company’s strategy has
included a series of cost control and reduction actions, as well as
the implementation of effective business strategies in its relation
with suppliers and customers.
Palplast will continue its investment program in 2010 as well, but
will adjust it to the production needs related to the projects that
the company has already undertaken in 2010, as well as to ensuring
the quality standard that the company has imposed in the market.
Thus, the company will invest in modernizing and revamping
the production capacities, which would result in optimizing
productivity, reducing costs and the environmental impact.
In 2009, Palplast had a turnover of approximately USD 4.3 million.
For the year 2010, the company estimates it will maintain a similar
level, based upon a series of actions that the company intends
to implement this year: diversifying the range of products by
trading activities, selling & manufacturing complex products
with high margins (irrigation valves, customized valves adaptors
etc.); improving oil transportation pipes, setting up strategic
partnerships for supplementing the range of products, free
consulting services for obtaining the funds allocated to agriculture
and developing new products with special applications, for
instance in the field of optical fiber.
Graphics representing the evolution of the main indicators
Direct distribution (import)
2009 Annual Report 43
(USD)
400,000
300,000
200,000
100,000
0
279,218
365,847
2008 2009
Direct distribution increased by 23,68% versus the year 2008.
Welding machines
(USD)
120,000
90,000
60,000
30,000
0
279,218
365,847
2008 2009
Distribution of welding machines increased with 61,63% versus
2008.