Together with its Slovenian partner EuroVek d.o.o., the Insulating Division of RHI with its lead company Heraklith AG has held participating interests in the Slovenian stone wool producer Termo d.d. since 1997. Heraklith Group currently holds an interest of approx. 41.5% in Termo, while Termo and Heraklith each have a 50% stake in the Croatian company Termika d.d. and the Slovak company Izomat a.s. All the above companies have major stone wool productions and hold considerable market shares in the booming insulating markets of Central and Eastern Europe.
Heraklith signed an agreement to buy an initial 50% share of its partner EuroVek, providing for a complete takeover of the engineering company by 2008 at the latest. Together with Heraklith, EuroVek is one of the few specialists worldwide with outstanding expertise in their endeavours to establish and modernise stone wool productions for insulating materials. EuroVek has 35 specialised employees on its payroll and provides consulting services to insulating producers, particularly in Eastern Europe, Russia and Asia. EuroVek has a turnover of some €5 million and the company enjoys excellent profitability.
Through its acquisition of an initial 50% interest in EuroVek, Heraklith will also indirectly be obtaining additional Termo shares and Termo’s participating interests in Termika and Izomat. The Heraklith stake in Termo will increase to over 60% and the company will thus be fully consolidated into the Heraklith Group and the RHI Group. Termo produces insulating material using stone wool and is market leader in Slovenia. Moreover, 75% of its production is exported, the main share consisting of “technical insulation” for the global market. Termo has a turnover of more than €55 million, its EBIT margin is currently at over 7%. Termika and Izomat have both already been consolidated into the Heraklith Group and RHI Group.
By acquiring EuroVek and through the associated increase in Termo, Termika and Izomat shares, Heraklith will be taking a decisive step toward improving its position as leading supplier of stone wool know-how and insulating material made of stone wool in Central and Eastern Europe. This move marks another stepping stone in the expansion toward these growth markets, particularly in Russia where EuroVek is currently modernising three of its stone wool factories.
Heraklith will make best possible use of the excellent growth prospects Eastern Europe have to offer while firmly continuing to strengthen its market position and thus the value of the insulating group.
The execution of the agreement concluded still requires prior approval by the national authorities. The parties to the agreement have agreed to keep the purchase price confidential.