The implementation of the project will start later this month by a new subsidiary of the group, TeraPlast Folii Biodegradabile, TeraPlast Group said in a statement filled with the Bucharest Stock Exchange on Wednesday.
TeraPlast Folii Biodegradabile will manufacture biodegradable bags with a biodegradation degree of 90%.
The project is expected to be completed in 25 months. Once completed, it will create 93 new jobs.
The state aid amounts to some 5.8 million euro and represents 49% of the total investment value.
"The packaging market we will address reached 293 million euro in value in 2019. The biodegradable bags segment which is the subject of this investment represents 22% of the total market and has the fastest growth rate. The local production can not properly address the demand, thus 46% of the total consumption in Romania at this moment is entirely imported from Germany and Italy," TeraPlast CEO Alexandru Stanean said.
"By this project we enter a new market, in its early stages, we are contributing to reducing the trade deficit that reached 17.28 billion euro in 2019 and to Romania’s compliance with the obligations the country has in the European context. Demand in the market will continue to rise because by 2030 all plastic packaging in the EU has to be reusable and easily recyclable," Stanean added.
This is the second project of a 20 million euro investment programme which is to be co-financed with state aid, announced by TeraPlast Group in September.
At the beginning of October, the group's biggest company TeraPlast SA submitted the first investment project within the state aid scheme for expanding the production capacity of its pipes and fittings production line. Worth a total 7.9 million euro, the project is expected to be completed in April 2022 and will create 45 new jobs.
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.
The group's EBITDA rose by 46% year-on-year in the first nine months of 2020, reaching 99.1 million lei ($24 million/20 million euro), while turnover increased by an annual 14% to 816.2 million lei.
TeraPlast SA shares traded 0.93% higher at 0.4360 lei as at 0915 CET on Thursday on the Bucharest Stock Exchange.
