Czech Rep's Fatra drops toys to focus on plastics packaging

20 October 2000 18:05  [Source: ICIS news]

PRAGUE (CNI)--Fatra Napajedla, the Czech Republic’s largest plastics processor, is to phase out its inflatable toy and boat production at the end of the year to focus on its more profitable packaging and granulate business.

The move comes as the company announced a 52.9% year-on-year rise in gross profits for the first nine months from Koruna39.4m ($933 700/Euro1.1m) to Koruna60.3m, despite being hit by the rise in world oil prices.

Operating profits increased by Koruna44m to Koruna104m. Fatra, which is a division of Aliachem, expects to achieve an operating profit of Koruna130m for the year as a whole.

Oldrich Jarka, Fatra’s strategic controller, said the profits rise stemmed from increased sales in packaging and granulates.

"We have been cutting back production of less profitable items such as inflatable boats since 1995 and they now account for only about 2% of our business. We have decided to stop production completely at the end of the year because the competition from Asia is intense and there is not a big enough market," he said.

Fatra projects sales for the year as a whole will reach Koruna1.66bn, compared with Koruna1.58bn in 1999. Although Fatra expects a "significant" rise in sales next year, it does not expect profit levels for the whole of 2001 will exceed this year’s as a result of rising raw material costs, most notably oil.

By: Magnus Bennett
+44 208 652 3214

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