Pannonplast sells part of unprofitable unit

Pannonplast Rt, a Hungarian maker of plastic packaging for customers such as Groupe Danone, sold about 80% of its unprofitable industrial plastics unit as part of the Budapest-based company's reorganization. The sale involves machines and equipment from one of the unit's two plants in Székesfehérvár (west of Budapest) to French plastics maker Plastiques Du Val De Loire. Pannonplast also will lease the real estate to the French company, it said in a statement late yesterday, without disclosing the price.
Pannonplast last reported a profit in 2001 and has been cutting costs and selling units after demand waned for its products, which include everything from yoghurt pots to computer monitor casings. The company expects to break even next year. The French plastics maker will have an option to buy the Székesfehérvár property, which accounts for 80% of the unit's production, Pannonplast said. Pannonplast will book a one-time loss of Ft 430 million ($2 million) in the fourth quarter from selling the equipment. Shares of Pannonplast are up 57% this year.