Business Report For The Year 2010

Business Unit: Packaging

Hullámtermékgyár [Corrugated Factory] Csepel, Dunaújváros

The Hungarian processing industry failed to recover in 2010 from the consequences of the economic recession of the previous year. The FMCG sector — the largest industrial sector — weakened in the first half of the year by over 10% compared to 2009.

Difficulties in the first half of the year also decreased market demand for corrugated products. Difficulties were exacerbated by the continuous pressure due to the drastic price increase that started in the fourth quarter of 2009 on the containerboard market. The Dunapack Hullámtermékgyár initiated the second step of its process to increase prices in the middle of February 2010, while the competitors opted for a go-slow policy. Consequently, sales volume fell by 25% in April and May compared to the end of the first quarter. By the end of the first half year, however, the order stock was stabilised and increasing sales in the second half of the year compensated earlier losses. In total, a 5% increase in quantity was realised compared to 2009. The small and medium enterprise sector’s growth rate was higher than that of multinational and so-called category “A” large corporations. Box sales showed a 7% increase, while sheet sales grew by 3% compared to 2009.
Sales quantity to export markets developed positively thanks to the Slovakian market strategy launched earlier and the recent opening towards the West-Romanian market.

Passing on the continuous price increases was partially successful, and the average price increased 6% compared to last year’s average. However, production value excluding material decreased.
Movements of the exchange rate were strongly influenced by the political environment, with fluctuations of over 10% experienced during the year.

Looking at competitors, Prowell sheets entered the market at extremely low prices, and the Czech plant of Smurfit Kappa pursued a similar strategy on the sheet market.