Business Report 2005 - Interseroh

Since the services segment will continue to be characterised by increasing competition in the
future as well, INTERSEROH will intensify its marketing activities further.
Raw Materials Trading
Potential risks exist in the volatility of raw material prices. INTERSEROH’s turnover should,
accordingly, also be evaluated on the basis of the level of these raw material prices.
The group-wide concentration of raw material activities on ISR INTERSEROH Rohstoffe
GmbH has enabled an even more efficient bundling of volumes vis-à-vis the concentration in demand
on the user side.
It is expected that the overheated market for plastics will continue to cool down in 2006, with
prices declining sharply. The volume of EPS (polystyrene) in 2006 will depend on the economic
situation.
INTERSEROH plans to expand its marketing activities to generate further volumes of plastic
and wastepaper. It also intends to acquire companies and/or joint ventures.
The influence on the market of the additional volumes of old wood for thermal utilisation will
probably continue in 2006 following the introduction of the TASi. INTERSEROH expects stable
demand from the thermal utilisation plants thanks to the commissioning of new biomass-fuelled
combined heating and power stations and higher availability of the plants that already exist. The
derived timber products industry in currently investing vigorously to enable substitution of residual and
forest wood with old wood in chip boards. This will result in additional demand for high-quality old
wood.
INTERSEROH plans to invest in the expansion of its wood sites in Wuppertal and Worms. To
improve regional coverage throughout Germany, it plans to buy new wood sites or expand existing
ones. Together with the volumes of old wood from abroad and utilisation possibilities in foreign
countries, INTERSEROH aims to expand its position as European trading platform in old wood.
Steel and Metal Recycling
INTERSEROH expects demand for scrap steel to remain stable in the current financial year. It sees
opportunities primarily in the expansion and modernisation of its sites to improve their efficiency and in
the expansion of international direct sales business. In addition to this, the group strategy aims to
establish a stronger presence in the Baltic states and other countries in Eastern Europe and to find
suitable sites there. Increased quantities of scrap steel are being generated in these countries due to
the relocation of labour-intensive production to them. The main risks lie in the high volatility of scrap
prices.
Risks are also seen in the ongoing concentration of the market and in the increased expansion
of capacities by competitors.
Since the legal regulations for environmental protection undergo continuous change, are becoming
increasingly stricter and further tightening will occur due to new EU directives, investments may
become necessary in the group in the future, the amount and time of which are difficult to predict.
4. Research and Development
Due to the fields of activity it is involved in, the INTERSEROH Group places a great deal of
importance on market research and working of the market. INTERSEROH does not engage in
research and development in the normal sense.
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