Vajda-Papír group’s turnover increased by 10 percent last year - the group closed a record year in 2021, and this year's prospects are also good

Fifty-two billion HUF to fifty-seven billion HUF increased last year, the turnover of Hungary's market-leading, largest-issuing hygiene paper product manufacturer, the 22-year-old Vajda-Papír Group, last year. The majority of the ten per cent increase in turnover was generated by the Hungarian mills, with the Norwegian subsidiary contributing EUR 16.7 billion to the performance. Group EBITDA was HUF 2.7 billion and profit before tax HUF 1.5 billion. Both the growth in exports and the expansion of the product range contributed to the good results. Attila Vajda, Managing Director of Vajda-Papír Kft., summarised the results of last year by saying that the company's development has paid off, it has successfully completed bond issues and continued to strengthen its distribution on foreign markets. The year 2022 will be a major milestone in the company's life: the handover of its new mill in Dunaföldvár and the capacity expansion will complete the raw material supply of the market leader in the production of tissue paper products. Vajda-Papír is expecting slight growth in both domestic and export markets this year, but the managing director also indicated that the global energy crisis and the war in Ukraine are making things less predictable than before. The acceleration of inflation is also hitting the company, with pulp prices rising significantly and prices continuing to rise, while demand for tissue paper products remains strong and continues to show steady growth.

Attila Vajda highlighted that after 2020, 2021 was another record year for Vajda-Papír, and the outlook for this year is also encouraging. The CEO reports that Vajda-Papír has seen significant growth, with revenue up by nearly 10 percent in 2021 compared to 2020, while volume increased by around 8 percent. Several developments have been launched at the company and will be completed this year, paving the way for further growth. It is no coincidence that the company has increased its production capacity to cover the whole of Hungary. He also mentioned the surgical face mask machine that was commissioned last year, which will contribute to securing the domestic supply of face masks.

The managing director of Vajda-Papír reported that the construction of their new plant in Dunaföldvár is progressing according to plan and will be handed over soon. The new production line for base paper will not only increase capacity but will also complete the supply of self-produced raw material for hygiene products, which, according to the Managing Director, is a strategic advantage for the company. For the company's HUF 16 billion factory investment, which will protect 600 jobs and create 50 new jobs, the government has provided HUF 5.5 billion in funding under the Large Business Investment Support Programme. The plant will start operations in the first half of the year and will triple the group's production capacity by 50 percent to 70,000 tonnes. Attila Vajda said: "This strategic advantage will enable the Hungarian company to extend its market leadership to more countries in the region and further increase exports through innovative product development and the most modern, energy-efficient technology available. He stressed that the company's annual production of hygiene base paper exceeds domestic demand, which means that Hungary can be self-sufficient in these products, even with the increased demand during the coronavirus epidemic. Consumption of sanitary paper is steadily increasing as hygiene expectations and needs grow, and there is still significant growth potential in Hungary, which is why the company decided to invest. The production of the new line will be sold both domestically and abroad, and the company expects to generate additional revenue of HUF 30 billion per year. Attila Vajda reminded that in November 2018, Europe's most modern and the largest paper mill in the region was built in Dunaföldvár with HUF 15 billion, and the investment was granted HUF 4.5 billion in non-refundable subsidies by the government under the Large Business Investment Support Programme.

The development of Europe's most modern and largest paper mill will be financed by the company's own resources, government support and bond issues. Under the central bank's bond programme, a HUF 11.2 billion issue in 2020 was followed by a HUF 9.9 billion green bond issue last year. The Hungarian market leader in tissue paper products was the first industrial producer to enter the green bond market. The almost €10 billion raised not only helped the company to fund the expansion of its Dunaföldvár plant with a new manufacturing unit, but also to meet the commitments set out in the company's green strategy.

Attila Vajda also reported that demand for the company's products remains high, although last year's pandemic wave did not cause the buying spree seen in March 2020, when production was 50 percent higher than the average monthly level. Vajda-Papier produces 60-65 percent of domestic consumption of tissue paper products, but exports are also significant, with 40 percent of production shipped abroad. Vajda-Papír Ltd. already realises almost half of its turnover abroad.

The company exports its products to more than 30 countries around the world, has further strengthened its presence in Scandinavia and Central and Eastern Europe, as well as in the Middle East and North Africa, and has expanded its distribution network to include new sales countries such as Libya, Mongolia, Ireland, Malta, Bermuda and St. Martin's Island. Attila Vajda said about Vajda-Papír's plans for 2022: the company is developing dynamically both domestically and abroad, and in Hungary they are expanding their cooperation in several sectors, strengthening their presence in the public market serving public institutions, hotels and industrial facilities. The Managing Director stressed that he is confident that they will be able to offset the effects of the increasingly severe energy crisis at a global level and that they expect to continue to grow their revenues in 2022.

The company has achieved one of its main strategic goals in relation to circular waste management: it has increased the proportion of recycled materials in the majority of primary and secondary plastic product packaging to 60 percent, reducing new plastic consumption by almost 600 tonnes, the company founder stressed. In 2022, the company will continue to focus on sustainability in product development and manufacturing, with a particular focus on improving energy efficiency and increasing the use of renewable energy.

Among the milestones, Attila Vajda mentioned the paper industry vocational training, which was relaunched last year after twenty years, and the role the company has taken in this, as well as the steps taken in the framework of social responsibility. He underlined that the training offers marketable knowledge, focusing on the acquisition of practical skills: students can learn and practice in a company environment, even at their future employer. He added that the cooperation is also fruitful for the company, as technology is changing rapidly in the paper industry, which nowadays increasingly needs creative, thinking employees who can adapt quickly to change. The resumption of vocational training is essential in a fast-growing market where the added value, contribution to GDP, number of employees and value of investments are increasing spectacularly year on year, he stressed.

In its social responsibility program, Vajda-Papír has been cooperating with the Hungarian Maltese Relief Service for several years. Most recently, they have provided sanitary paper products to shelters and aid centers for refugees from Ukraine. This year, they will organize more joint activities with the charity, including support for families with children with disabilities. In November last year, four hundred families of four in need were provided with a year's supply of toilet paper products through the Hungarian Maltese Charity Service, and in June six thousand children with disabilities. The company donated two truckloads of more than ten tonnes of hygiene paper products, including tissues and paper towels, to kindergartens and primary schools for disadvantaged children as part of the charity's children's programs, the "Prevent by Playing!" Playground Program and to social play houses and the foster parent network.

BACKGROUND INFORMATION

Vajda-Papír was founded 22 years ago as a family business with around 650 employees at group level. In addition to sales in Hungary, the company's tissue paper products are exported to more than 30 countries worldwide. In 2013, the company also opened a subsidiary in Norway, creating more than 130 new jobs.