Annual report 2000.

Overview

Hungary´s economic growth speeded up during 2000, and the country was putting in one of its best years since the change of system, with a rise in GDP of 5.2%.

Growth made an impact on the demand for packaging materials and was accompanied by an upturn with domestic and European demand showing steady growth in the paper industry.

The year started with substantial rises in waste and paper prices, to the great benefit of the Company´s corrugated operation, which was able to realise these in full. A major factor in exploiting this situation was the boost to corrugated paper sales
volume afforded by the successful capacity expansion programme on No. 3 paper machine.

The volume of sales from processing operations was also outstanding. In corrugated product sales, however, it was not possible to pass on the entire 40% paper price rise to the customers, which resulted in a temporary fall in profitability in this product group.

The overall outcome of these factors was that Dunapack achieved outstanding results, and completed one of its most profitable years since foundation.

The Company increased its total domestic sales by 27% and its exports by 59% over the preceding year, and its accumulated product value increased by 41% over 1999.

Sales

A major rise in corrugated paper prices and demand started in May 2000 and persisted till the end of the year. The market upturn showed up mainly in sales within Europe. Besides sales to associated producers above the plan, there was a major rise
in sales to subsidiaries (Eurobox, Rambox) and domestic market building also brought in its first results.

Corrugated paper sales reached hitherto unseen levels, some 33,000 tonnes higher than the base and more than 13,000 tonnes higher than planned. Capacity utilisation of production plant was 100%.