Press Information. Clear course of cooperation

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1 Press Information Date: October 26, 2011 Roto has strong position in the Sales Area North-Eastern Europe / Success through performance / Polish window market transformed / PVC replacing timber / High export quota / Increasing requirements and tougher competition / Market partners expect and receive added value / Optimism (also) for door business Clear course of cooperation Warsaw/Leinfelden-Echterdingen - (rp) A comprehensive, marketoriented product range, efficient logistics and a professional support package are also important major aspects of the continuing success of Roto in North-Eastern Europe. In addition, the ability to react flexibly to different market situations and new market trends is also an important factor. That's how Barbara Ahlers summarised crucial company strengths from her point of view at the end of October The Sales Area Manager of North-Eastern Europe of the Window and Door Technology Division provided an overview of general and industry-specific structures in the region during the 6th International Trade Press Day in Warsaw. For Roto this includes Poland, the Ukraine, Belarus and the Baltic countries of Estonia, Lithuania and Latvia. A total of approx. 100 million people with an average age of just under 39 live here in an area of 1.3 million square kilometres. Based on the results for the 1st quarter, an economic upswing is predicted for all countries of the region. In some of these countries experts even expect strong growth. According to surveys of a Polish information centre, the business region represented a volume of approximately 17 million window units and approximately 1.2 million doors in Poland as the country Page 1/7

2 with by far the largest market contributes well over 11 million windows and 0.7 million doors to this volume. This is followed by the Ukraine (4 million and 0.4 million respectively), Belarus (1.3 million and 0.1 million respectively) and the Baltic countries (just under 0.6 million and approx. 15,000 respectively). Roto serves all markets via a central warehouse in Warsaw. Boom with consequences As an example, the Sales Area Manager cited the Polish market, where Roto has been active since 1991, that is exactly 20 years. In the country that joined the EU in 2004, the Roof and Solar Technology Division has, in addition to a sales organization, a plant for roof window production in Lubartów. In the Window and Door Technology Division a separate distribution and marketing department is responsible for the portfolio of hardware for windows and balcony doors, sliding systems and door-related product ranges. Parallel to the introduction of market economy, since the early 90's the demand for windows that had long been building up has turned into real demand, triggering a regular boom at times. This is partially apparent from the number of window manufacturers. Up to 1990 there were just ten state timber window manufacturers, while today there are approximately 2,000 producers, explained Ms. Ahlers. Alone 1,700 of them concentrate on PVC. The consequence: considerably more intense competition. During the same period, the market is said to focus completely on the frame materials used. According to this, timber was completely dominant in 1990 with a share of 95%, while PVC (4.5%) and aluminium (0.5%) played only subordinate roles. The values for 2010 look quite different: 9.3 million units, and therefore 85% of the total window volume, were made of PVC. At the same time the quota for timber dropped dramatically to 13% (1.6 million units), while aluminium improved slightly, reaching 2% (0.24 million units). Page 2/7

3 Old and new generations For the Polish window industry export is constantly growing in importance. While it had only accounted for approximately 20% in 2005, last year it already made up 50% of total production with well over 11 million units and therefore held the leading position in Europe. The other 50% of the total sales volume was sold and installed domestically (38% renovation, 12% new buildings). The low percentage of new buildings is no indicator of a lack of potential in this sector, for according to media reports there is a still shortage of 1.5 million flats in Poland. The standard window can be defined relatively clearly: 2-sashed with a narrow Tilt&Turn and a wide Turn-Only sash each, approx. 150 x 140 cm in size, fixed centre post, one security point, usually night ventilation and a U-value of 1.3. However, for several years now the shifting trends are unmistakable. Ms. Ahlers pointed, for example, to growing quality and functionality requirements, the advance of large surface windows and balcony doors, the increasing need for sliding solutions and the trend to energy-saving windows. It is also based on government intentions and specifications like the law enacted in 2009 for the thermal certification for new buildings. Required suppliers and a committed Number One A look at the structure of the Polish window manufacturers shows an increasing focus on major market players. This means that approximately 20 PVC window manufacturers cover approximately 50% of the total volume. With an annual production of over 3 million units, just three companies account for a share of around 30%, emphasised the Roto expert. The production, logistics and communication level of the window manufacturers is generally on a high level. This applies, for example, to modern systems and processes, an electronic ordering system, paperless production and Page 3/7

4 the transfer of information to window dealers controlled via Internetcapable software. For the component industry this results in the necessity to deliver quickly (within 48 hours) and reliably. Roto can effectively score with a delivery capability of more than 96%. The sales area manager identified the range of support that's just as broad as it is individual as another asset for the market partners. Towards the international trade press she also emphasised the engineering and information technology offered as important elements especially for fabricators. It provides companies with real help in their efforts to optimise production, integrate new production lines, increase the performance and efficiency of processes and promote project and team work. She also emphasised that the installation of window construction software and practice-oriented qualification programmes also strengthen the competitive edge of Roto customers. In addition, professional cooperation marketing creates additional added value through higher quality. On the foundation of a complete product range, this has all led to the point that Roto sees itself as Number 1 in the window technology segment and we want to maintain that position. Forcing and participating Here the company is banking, among other things, on its expertise and its commitment to room-specific window technologies. Especially the Polish public is very open-minded, as already documented by a representative study initiated by Roto in Whether it's fast, easy ventilation with kitchen windows, increased security for children's room windows with an opening restriction, more convenience with a variable ventilation position for bedroom windows the active promotion of modern benefit windows offers the customer a worthwhile possibility for positioning and differentiation in tougher competition. Page 4/7

5 In conclusion, Ms. Ahlers assessed the future of the door technology business, which had been growing at a double-digit rate in the past years, predicting a positive trend for the future. Roto meanwhile stands for the most complete product portfolio in this sector. This increases the chances to fully participate in current market trends, like the growing relevance of energy-saving outside doors. The until now relatively small share of multi-point locking systems in Poland can also be considerably increased. The Warsaw conclusion: There is no shortage of favourable perspectives in the business region of North- Eastern Europe. Captions According to Barbara Ahlers, Sales Area Manager for North-Eastern Europe, Roto s strong position in the region results from several factors. During the 6th International Trade Press Day, Ms. Ahlers referred in detail to the comprehensive market-oriented window and door technology product range, efficient logistics and a professional support package. Its catchy motto: Success through performance. Barbara_Ahlers.jpg Poland is by far the largest window market in the Roto sales area of North-Eastern Europe, which also includes the Ukraine, Belarus and the Baltic States of Estonia, Lithuania and Latvia. According to the surveys of an industry information centre, the total volume for 2010 was around 17 million units. The unchallenged number one accounted for two-thirds of that with well over 11 million windows. Graphics: Roto ENO_Fenstermarkt_EN.jpg An industry information centre determined that Poland also clearly sets the pace in the Roto business region of North-Eastern Europe for Page 5/7

6 outside doors. According to this, with 700,000 units the country contributed just under 60% to the total value of approx. 1.2 million units. It was considerably ahead of the Ukraine. Graphics: Roto ENO_Tuerenmarkt_EN.jpg Considering the frame materials used, the window market in Poland has completely turned around in the last 20 years, stated Roto during the 6th International Trade Press Day in Warsaw. While timber was absolutely dominant in 1990 with a share of 95%, this was true for PVC in 2010 (85%). As the chart shows, aluminium improved slightly as the third force during the same period, however still only plays a subordinate role. Graphics: Roto Polnischer_Fenstermarkt_EN.jpg The Polish window industry is the European leader in the Export category, reported Roto at the end of October 2011 in Warsaw. According to this, the export quota for 2010 was around 50% for a total quantity of well over 11 million units. The production, logistics and communication level of the approximately 2,000 window manufacturers is generally on a high level. Fertigung_Verarbeiter.jpg The window boom in Poland that began in the early 1990ies was also reflected by the number of manufacturers. While according to Roto information there were only ten state timber window manufacturers up until 1990, today approximately 2,000 companies supply the market. Of those 1,700 process PVC. One consequence of this boom is considerably more intense competition. Produktionshalle.jpg Page 6/7

7 According to Roto, Polish standard windows are characterised by the following features: 2-sashed with a narrow Tilt&Turn and a wide Turn-Only sash each, approx. 150 x 140 cm in size, fixed centre post, one security point, usually night ventilation and a U-value of 1.3. However meanwhile, a successive change in generations is becoming apparent. According to the information provided, it is marked among other things by an increasing demand for higher functionality and quality standards and the trend to energy-saving windows. Polnisches_Fenster.jpg With its individual engineering programme, Roto wants to offer customers in Poland (and elsewhere) a special level of added quality, and therefore strengthen its competitive edge. Among other things, this enables fabricators to optimise production, integrate new production lines, decide on the window construction software suitable for the respective case and increase the overall performance and efficiency of processes. PC_Produktion.jpg Print free copy requested Publisher: Roto Frank AG Wilhelm-Frank-Platz 1 D Leinfelden-Echterdingen, Germany Tel.: Fax: Editor: Linnigpublic Agency for Public Relations GmbH Koblenz office Fritz-von-Unruh- Straße 1 D-5607 Koblenz Tel.: Fax: Hamburg office Flottbeker Drift 4 D Hamburg, Germany Tel.: Fax: Page 7/7

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