PTL to spend 1.88 billion baht to raise capacity at facility in Turkey after showing significant contribution to impressive 56% sales growth

News Release

October 31, 2006

PTL to spend 1.88 billion baht to raise capacity at facility in Turkey after showing significant contribution to impressive 56% sales growth

Polyplex enjoys higher sales due to strong contributions from production in Turkey . The company's consolidated sales during July - September 2006 increased 56% against that of last year with sales margin promising to improve following the lower oil prices The production capacity at the company's film manufacturing facility in Turkey will be doubled by mid - 2008 using the latest technology to ensure a better product mix. The investment for the expansion project will be about 1.88 billion baht.

Manish Gupta, GM (Commercial) of Polyplex (Thailand) Public Company Limited or PTL disclosed that during the second quarter of the 2006-07 fiscal year covering the period of July to September 2006, the company reported a consolidated net profit of 75.39 million baht, up 44.45 million baht or 143.66% from the first quarter of the same year (April - June), The earnings per share for the second quarter was 0.09 baht.

"The consolidated revenue during July - September 2006 was 1,192.16 million baht, up 11.54% from 1,068.82 million baht revenue in the first quarter of 2006 and 55.77% or 426.84 million baht higher than that of the same period a year ago. Most of the revenue increase can be attributed to sales coming from the company's subsidiaries in Turkey and America," he said.

"However, when comparing the net profit for the quarter to that of the same quarter in 2005, the same is lower due to decline in selling price per unit caused by over supply, while production costs and other expenses continued to rise. Soaring oil prices during the past few months drove up costs of raw material beside utilities such as electricity and fuel. " he said.

"The problem of oversupply is expected to gradually reduce in line with the business cycle with not so much increase in production capacity like before and lower oil prices looking to help shore up the sales margin, making the outlook for rest of the fiscal year more positive. The production facility in Turkey will also contribute more significantly to the sales & profits " he explained.

The board of directors of Polyplex (Thailand) Public Company Limited at their meeting held on October 30, 2006, have resolved to expand the Pet Film production capacity of Polyplex Europa Polyester Film Sanayi Ve Ticaret Anonim Sirketi (PE) in Turkey. PE will invest in an additional state of the art 8.7 meters wide thin pet film line with an installed capacity of 24,000 tons per annum. The total cost of the Project is about US$ 50 million or equivalent to 1,880 million baht (using the US$-baht exchange of 37.60 baht to the dollar). The cost of the project comprises the capital cost such as site development, civil construction cost and equipment cost worth US$ 42 million and working capital of US$ 8 million.

"The product range from the new production line would be thin film in the range of 10-50 micron thickness with capability for several value added products like coated films, co-extruded films, Hot Stamping applications, Heat Sealable films, Direct Embossable films and Clear Films etc," he said.

The investment in the approved project will help PE reduce per-unit costs in various heads including production, human resources and other overheads. The production of thin film will also help optimize the current Pet-Chips production capacity which is sufficient for two lines.

"The major markets for the new production line are existing markets in the European Union, Eastern Europe, independent states of the former Soviet block, Turkey, the middle east and North Africa. Competition is made mostly with local manufacturers in those countries with high cost structure and imports from Asia with long delivery lead times and higher logistics costs.

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