November 12 (SeeNews) - Romanian plastic products manufacturer TeraPlast Group [BSE:TRP] said on Monday it has received government financing in the amount of 6.8 million euro ($7.6 million) for three investment projects worth a total of 15 million euro.
The projects would be implemented under the Government Grant Scheme that stimulates investments with a major impact on the economy, TeraPlast said in a filing to the Bucharest Stock Exchange, BVB.
The group requested the financing in September, pledging to pay the same amount to the state budget through additional tax and salary contributions until 2024.
"These investment projects will have national and international impact with the main beneficiaries being our customers and partners, to whom we are commited to deliver quality solutions. Another outcome of their implementation translates in 159 available jobs in the three companies of TeraPlast Group," TeraPlast chairman of board of directors, Dorel Goia, said.
The first investment project proposed by TeraPlast has an estimated cost of 6.2 million euro, of which 3.1 million euro would be state grant. The investment will be made into equipment for the group's plastics manufacturing division.
For the second investment, TeraPlast proposes to expand the production capacity of internal polypropylene sewage systems. The proposed investment in the project totals 5.2 million euro, of which 1.9 million euro would be financing from the State Grant Scheme.
For the third investment, TeraGlass, a subsidiary of the group, will apply for state aid in developing a 3.5 million euro project for a new, fully automated flow for production of PVC windows and doors, which will increase both production capacity and labour productivity.
The implementation of the three projects, submitted by TeraPlast, Depaco and TeraGlass respectively, will begin immediately, the group said.
TeraPlast Group consolidated net profit rose by 40% on the year to 22.2 million lei ($5.4 million/4.7 million euro) in the first nine months of 2018.
The good results were possible due to steady organic growth of all business lines and due to the group's strategy which focused on developing the distribution network, increasing its presence on European markets as well as developing new products, the group said.
In January, Teraplast took control of local roof tiles producer Depaco by increasing its stake in the company to 67% and said it targeted 100% ownership. In October last year, TeraPlast opened its TeraSteel sandwich panels factory in Serbia, and received the approval of Romania's anti-trust regulator for the takeover of plastic products manufacturer Politub.
Teraplast shares traded 1.72% higher at 0.3550 lei on the BVB by 1559 CET on Tuesday.