Rehau: We now work at 65% of our potential

Rehau Polymer, the domestic subsidiary of Germany’s Rehau group, in the past two months of last year posted a 65% activity reduction, amid the falling investments aimed at the constructions sector, while during the January-October period the company’s sales had advanced by more than 10%.

Rehau has not reported 2008 figures, yet, but according to some estimates the company’s turnover ranges between 70-75 million euros, from 65.8m euros in 2007. The company this year wants to keep turnover at the 2008 level and will change its budget planning strategy so as the budget should be as flexible as possible in the context where constructions are declining. “We have the 2008 as a basis and we work with a dynamic planning, at every three months, for us to be more flexible. For the time being, we cannot speak of a turnover growth strategy, but of a strategy meant to help us cope with the crisis as best as we can. The investments that could be postponed have been postponed,” states Emil Pop, Rehau Polymer CEO. Pop says Rehau has enough cash, as the German group has no loans, to continue its activities this year despite turnover of the first months of this year having dropped to 65% of what it was in the same period of last year. “The housing sector will fall to around 50-65% of the 2008 volume, with the constructions sector to be centred on infrastructure and special projects. The crisis will hurt those who expanded exclusively on the back of loans and companies with a weak management,” stated Pop. Rehau is a major producer of PVC and polyethylene pipe systems, a market that reached some 110m euros last year, up around 10%. “The pipe systems market could register growth should the government provide financing for infrastructure projects (…),” Pop says. Rehau also operates on the segment of PVC window trim, but the company’s representatives expect the market to witness a decrease of around 40-50% on this segment. The company last year started promoting renewable energy solutions among real estate developers and energy producers, but this segment has a low weight in Rehau’s business for the time being. Rehau Polymer, specialised in polymer processing, produces constructions and industry equipment and car parts. The firm owns in Romania a plant in Sibiu, 4 warehouses and a logistics centre.