Hungary's Pannonplast plc has been rocked by a boardroom takeover, with shareholders throwing out Chairman and Chief Executive Officer Csaba Zoltan after just six months.
The takeover, led by several financial investors at a September shareholders' meeting, also saw the recall and replacement of three other Pannonplast directors. Balazs Bokorovics was elected chairman and the firm's production director, Balazs Szabo, was named CEO.
The new management made it clear it plans to retain Zoltan's strategy to focus on consumer packaging and consumer electronics products, although there will be ``fine-tuning'' in some areas.
Zoltan's plan, announced in March, included selling five noncore subsidiaries and closing the plant of Moldin Ltd., an injection molder of electronic and automotive parts.
Bokorovics plans to speed up the restructuring, reducing the time frame in some business areas from a year to just three months. He also plans to cut staff at the company's Budapest headquarters and relocate the office, he said. Those changes will save about $1.75 million annually, he said in a telephone interview.
The company will cut its workforce by 10 percent, or 200 workers, in November, when it completes the sale of four of its five noncore subsidiaries. The sales, to separate buyers, will net Pannonplast around $4 million, he said.
Bokorovics, also chief executive of one of the financial investors that engineered the boardroom coup, said Pannonplast means to expand its packaging and consumer engineering plastics parts business in Eastern European countries.
He expects business for the company's injection molding operations in Hungary to grow next year.
Global customers such as Philips NV are likely to switch manufacturing of products including televisions and computer equipment back to Eastern Europe from China on the back of new incentives agreed upon recently by the European Union, he said.
Bokorovics, who expects the engineering plastics operations to see a ``two-digit revenue increase'' from growing demand, said Pannonplast will know by January whether new investment will be required.
Pannonplast, which has had three CEOs in the past year, had a net loss for 2003 of 1.84 billion Hungarian forints ($8.5 million).
The latest boardroom shake-up followed an August profit warning by Pannonplast reporting a first-half 2004 loss of just over 1 billion florints ($5 million). However, net sales rose by 12 percent against the same period in 2003. Zoltan had blamed rising raw material prices and onetime reorganization costs.
On the packaging side, Pannonplast expects to capitalize on growing demand, especially from Romania, where it has major customers including Danone and Unilever. Pannonplast expects to invest around 1 million euros ($1.2 million) to upgrade machinery at Unical, its Romanian thermoforming business.