Sonae Industria to acquire the assets of the Hornitex Group in Germany

The Hornitex Group is an important player in the German market, ranking third in terms of total production capacity. However, it has undergone a challenging period over the past years and was declared insolvent in September 2001, subsequently being managed under receivership.

Hornitex has three main industrial plants:

Importantly, an additional source of value from the deal announced today is that two of the factories have cogeneration power plants, one located at Horn (20 MW) and the other at Beeskow (18 MW). Hornitex’ forecast Net Sales for 2005, for the three factories is close to 263 million euros, generating an EBITDA margin of 7%.

Meppen Berlin Nettgau Kaisersesch Eiweiler Beeskow Horn-Bad Meinberg Duisburg Sonae Industria’ sites Hornitex’ sites Sonae Industria ranks as one of the leading players in the German market in terms of production capacity (close to 2 million cubic meter) with 4 main production facilities, having entered the market in 1998 with the acquisition of an 85% stake in Glunz (currently 98%).

Germany represents close to 19% of the Sonae Industria Group’s Consolidated Turnover: (1,5 billion euros in 2005).

Carlos Bianchi de Aguiar, CEO of Sonae Industria stated: “With this acquisition, Sonae Industria’s aim is to strengthen its position in Central Europe and secure the long-term competitiveness of its Central-European wood-based manufacturing activities. Sonae Industria intends to become the leading wood-panel producer in Germany in terms of total production capacity, further enhancing its competitive position as a supplier with an important position in MFC and production of high valueadded products.

The locations of the Hornitex plants are complementary to those of Sonae Industria’s: Horn is in the heart of the German furniture industry, where Hornitex has a strong brand position and the Beeskow plant is strategically positioned to serve as a platform for expanding business into Eastern European markets, namely Poland . As well Duisburg is well located in view of other German markets."

The plans for the integration of Sonae Industria and Hornitex include the maintenance of the successful Hornitex brand name, the participation of Hornitex in the European production and logistics activities of Sonae Industria, the implementation of existing Sonae Industria best practices in terms of manufacturing processes, in addition to combined research, development and applications support.

Christian Schwarz, COO of Sonae Industria for Central Europe said that he was impressed by the commitment and resilience of the Hornitex staff: “Employees never gave up hope during the 4-year insolvency period, and have managed to restore competitiveness to many parts of the company under such adverse circumstances. I am confident that by combining the assets of its German activities, Sonae Industria will establish a sound, competitive and profitable company well positioned for the future.”