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Phil. Andreou: Strategic cooperation with Petrogiannis Bros SA in Greece for production and disposal of stands

Phil. Andreou Public Ltd announces that it has reached a strategic agreement for the production and disposal of stands with Petrogiannis Bros SA based in Aspropyrgos, Attica, Greece, which is actively involved in the construction of metal shelves and stands is trading machines, mostly in the sector of metalworking in the past 20 years.

Within the framework of this strategic agreement, Petrogiannis Bros SA acquired part of the equipment of Phi. Andreou Public Ltd, necessary for the production of stands against the sum of €450,000 (value in the books on 30/6/2014 at €193 thousand) n market prices of used equipment. Within the framework of the agreement, the price will be paid in installments.

The agreement with Petrogiannis Bros SA, apart from the sale of the machinery, also provides for the gradual acquisition of significant part of row material held by Phil. Andreou Public Ltd, which will be used for the execution of orders. The row materials that will not be used will be sold to third parties. The sale of row materials will affect positively the liquidity of the Group. While the strategic cooperation agreement will be in effect, several plans, stand production methods and brand name will be assigned for use by Petrogiannis Bros SA, however, they will still be held by the Group.

In addition, it has been agreed that for the production and disposal of stands to both the existing and new customers of Phil. Andreou Public Ltd in Cyprus and overseas, Petrogiannis Bros SA will use the hallmark Phil. Andreou Hellas or any other similar hallmark requested by Phil. Andreou Public Ltd. The existing and new customers secure recurrent benefits for Phil. Andreou Public Ltd.

Phil. Andreou Public Ltd will continue to support the sale, development, the design of its products and the customers’ service. We would like to emphasize that the quality of the service will continue to be at the same level and so will the quality of its products since Petrogiannis Bros SA is equally experienced in the sector of production. Also, there will be bidirectional cooperation in the transfer of know-how.

All products and services via partners abroad, which we represent and dispose to the Cypriot market, will continue to exist even more dynamically. The main representations of Phil. Andreou are as follows:

-Metalsistem – Italy – Shelves and storage systems

-Sidac – Italy - Shelves and shop systems

-Plastimark – Italy – Shopping baskets and trolleys

-Eureka Display Limited – UK Shop fitting and Wood furniture

-SCS srl – Italy – Checkout solutions

-POS Tuning – Germany – Shelf Management Systems and pusher systems

-Sodem System – France – Aluminium profiles & shop fitting solutions

-Mirtec – USA – Architectural Signage Systems

We also wish to announce that the digital printing and plastic departments, which are currently the largest in the Cypriot market (active via the subsidiary Phil. Andreou Public Ltd) will be strengthened since they will produce in Cyprus all products of cooperation that have to do with these departments. The production of stands from carton and other related materials will start too.

The Company believes that this agreement will improve its profitability and liquidity, which is very important after the developments in the banking sector and the fact that most suppliers abroad changed their credit policy. This agreement leads to a significant decrease in operating costs, such s the labour cost (more than €700 thousand per annum compared to 2013) and the energy cost (more than €100 thousand per annum compared to 2013).

The sales of stands from production fell significantly in the past few years due to the lower competitiveness in relation to the prices, mostly to Company’s export destinations.

Petrogiannis Bros SA has lower labour cost, access to cheaper row materials and proximity to suppliers, easy connection with Europe, which means cheaper fares to export destinations that will allow more competitive prices and by extension expectations for increased sales.

This announcement is released following the examination of the issue by the Board of Directors. The Board of Directors took this decision following the examination of all parameters and data.
Monday, 7 July, 2014 - 10:19