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Press Room:

Increasing production capacity in Romania

Thursday, 10 July 2008

Very recently (January 2008) a Barlinek investment was finalised, consisting of the purchase for € 23 mln of 99.9% of the shares of floor plank manufacturer, Diana Forest with its registered office at Bacau, Romania. Currently the production of the Romanian plant amounts to approximately 800,000 m2. However Barlinek intends to significantly increase Diana Forest production capacity to 2-3 mln m2. Now advanced negotiations are in progress with the supplier for a plank production line for the Romanian factory. The cost of the investment programme shall amount to PLN 80 mln. Barlinek will invest less since part of the investment shall be financed by the sale of redundant assets of the Romanian company. Before it was acquired, Diana Forest manufactured windows, doors and decorative ornaments mad of wood. Barlinek’s Management took a decision to discontinue this part of the business.

Barlinek SA is the largest producer of laminated wooden floors in Poland and one of the largest in the world and is also a leading producer of veneers and pellets. The company operates within the Barlinek Capital Group. The most important item in the product range is flooring from planks of fine indigenous and exotic varieties of wood. This flooring is exported to over 30 countries on 3 continents. The Group also offers certified floors (Barkiet Sport) for sports facilities. An equally important area of activity is the production of natural veneers, in quantities of approximately 13 mln m2 annually, and ecological fuel granules (pellets), produced from the sawdust by-product of Barlinek floor plank production. The basis of the Group‘s production is the four Polish Barlinek plank lines in the town of Barlinek, in the West Pomerania province. Their combined production capacity amounts to 6 mln m2. The company’s strategy focuses on becoming the leader in the wood products sector in Central Europe. This objective has been systematically pursued and Barlinek has expanded for several years. The first foreign unit, with production capacity of 2 mln m2, was established in Winnica in Ukraine. The development of a recently acquired by Barlinek Group a Romanian company to manufacture 2 -3 mln m2 of floor planks has also been decided on. Barlinek’s another international production unit is being developed in Russia. It is envisaged that plywood plant will be built in the first stage of the investment while in the successive stages the production plant will be able to manufacture 2 mln m2 of floor planks annually.

Barlinek is listed on the Warsaw Stock Exchange.