Annual report 2002.

The year 2002 saw a slowing of economic growth in Hungary. The steady strengthening of the forint over the course of the year reduced the profitability of exports, while a slowing in the rate of industrial output growth prevented significant increase in sales volumes. Although the average level of paper prices could be considered satisfactory, this average concealed significant fluctuations. Our converting activities were characterised by stable prices and – especially in the second half of the year – a higher-than-expected sales volume, accompanied by an increase in earnings. The group continued to make the best use of its vertically integrated structure, and achieved its targets for 2002.

Reconstruction continued in 2002 in the areas of both paper manufacturing and converting, with the aim of reducing waste, improving energy efficiency and quality, and reducing the environmental burden. At the end of the year we carried out important modernisation of our corrugated product manufacturing plant, including the simultaneous modernisation of five corrugator units. We also continued our policy of expansion in 2002: By the end of the year we had acquired the Bulgarian corrugated product manufacturing group Rodina-Rodinvest, and commenced a new green-field investment in Croatia.

The company’s financial and liquidity position remained stable, providing a suitable foundation for achieving our strategic aims and carrying out further acquisitions.

Production value of Dunapack Ltd. (HUF million)