Annual report 2001.

By the second half of 2001, in line with international trends, economic growth had slowed down in Hungary. The slowdown in demand growth set a limit on the volume growth of domestic sales. The situation for the Company’s profitability was completely different. In the first half of the year, the level of paper and wastepaper prices generated extremely favourable conditions for our paper production. Profitability was further improved by the dynamic rise in domestic-sourced fibres, surpassing the 2000 level by almost 20 per cent.

The modest fall in paper prices in the second half of the year slightly reduced the exceptionally high profit level in paper production, but the Group made good use of its vertical-integration advantages by achieving exceptional results in manufacturing operations during this period. Over-fulfilment was greatly boosted by the sale of our holding in Halaspack Rt., which did not fit into strategic activities. Our subsidiaries also put in a successful year, especially notable being the performance of the Polish company Eurobox Polska Plc.

The above factors led to Dunapack Ltd. achieving outstanding results, and 2001 being the most profitable year since its foundation.
Apart from favourable market conditions, these successes were also the fruits of past efforts, capital projects and investments. Reconstructions continued during the year 2001 in both the papermaking and manufacturing areas, helping to achieve material and energy savings, quality improvement and reduction of environmental pollution. Acquisitions also continued, so that by the end of the year we had acquired the Polish board manufacturing company ECO-PAK-IR and board manufacture was started up in our factory in Zhidachev, Ukraine.

The Company’s financial position also turned out better than planned, chiefly owing to the outstanding performance already discussed. The working capital management objectives were fulfilled and hedging transactions offset most of the adverse exchange rate rise effects.

Production value (HUF million) Dunapack Ltd.