The products manufactured in the new unit will be used in the water, irrigation and gas networks, TeraPlast Group said in a statement filled with the Bucharest Stock Exchange, BVB.
The project, for which the group has submitted a request for state aid, is expected to be completed in February 2022 and will create 80 new jobs.
"By these projects we aim to outweigh the sale of the Steel division which last year contributed 11 million euro to the consolidated EBITDA. We manufacture in Romania and contribute to equilibrate the trade balance which in 2019 reached 17.28 billion euro. We will create new jobs and respond better to market demand," TeraPlast CEO Alexandru Stanean said.
The new factory will make polyethylene pipes for drinking water, general purpose water, natural gas, telecommunications, pressure drainage and irrigation networks, as well as manholes for verification and monitoring of the sewerage networks for domestic water, rainwater and drainage.
This project is part of a 20 million euro investment programme which is to be co-financed with state aid, announced by TeraPlast Group in September.
On Thursday, the group's flagship company - PVC pipes and fittings manufacturer TeraPlast [BSE:TRP] announced that Romania's finance ministry approved state aid of 3.9 million euro ($4.6 million) to co-finance an investment project for expansion of its production capacity.
Earlier this month, TeraPlast Group said that it is launching another 11.8 million euro biodegradables investment project which is to be co-financed by the state. The implementation of the project will start later this month by a new subsidiary of the group, TeraPlast Folii Biodegradabile.
The TeraPlast Group product portfolio comprises several business lines: installation, PVC joinery profiles, compounds, thermal insulating panels, windows, doors and metallic tiles. The group's seven companies are TeraPlast SA, TeraSteel Romania and Serbia, Wetterbest, TeraGlass, TeraPlast Recycling and TeraPlast Hungary.
TeraPlast SA's shares traded 1.23% higher at 0.41 lei ($0.10/ 0.08 euro) as at 1108 CET on Monday on the Bucharest Stock Exchange.
