September 10 (SeeNews) - Romanian plastic products manufacturer TeraPlast Group [BSE:TRP] said on Monday it has asked the government to provide grant funding for three investment projects worth a total of 15 million euro ($17.5 million).
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.
"We believe this Government Grant Scheme is better suited to the size of the Teraplast Group companies. We are also eager to see how authorities public statements turning into reality, as this scheme aims to support Romanian companies and so far, mostly foreign companies benefited from this state aid," TeraPlast chairman of board of directors, Dorel Goia, said.
The first investment project proposed by TeraPlast amounts to 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 division.
"Implementing this project, the company will come up with innovation in the PVC granule market: TeraPlast will be the first halogen-free fire resistant granules producer in Romania which are used to insulate electric cables," the company said.
For the second investment, TeraPlast proposes to expand the production capacity of internal polypropylene sewage systems. The proposed investment amounts to 5.2 million euro, out of which 1.9 million would be financed through the State Grant Scheme.
Finally, for the third investment, TeraGlass, a subsidiary of the group, will apply for a state grant with an investment project of 3.5 million euro for a new, fully automated production stream of windows and doors, which will increase both the production capacity and labor productivity.
The cumulative amount of state grant does not exceed 6.8 million euro. TeraPlast is committed to contribute the same amount to the state budget through additional taxes and salary contributions until 2024.
After the funding gets approved, all three projects will be launched immediately.
TeraPlast's first-half net profit rose by 33% on the year to 10.52 million lei ($2.7 million/2.3 million euro), mainly due to the acquisition of new businesses in 2017.
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 0.83% lower at 0.3570 lei on the BVB as of 1355 CET on Monday.
(1 euro=4.6332 lei)