Fishers land an investor

  • 1999-10-14
  • By Kairi Kurm
TALLINN - Viru Rand, once one of the biggest and most successful fish processor in Estonia, was pulled late last month from the depths of bankruptcy by Agu Laanemets' 52 million kroons ($3.47 million).

Laanemets bought the company a week before the end of the public sale. He has worked in Viru Rand since May, when the company's business was already going downhill.

Before working in Viru Rand, Laanemets worked as the director of the giant company Estoplast and for a subsidiary of Norma in Russia. He said that when he left for Russia, Viru Rand was working successfully. Viru Rand went bankrupt Jan. 12.

"I can only guess [why it went bankrupt] because I came here later," said Laanemets. "Most say the collapse of the Russian market caused it, but I think there is always a market if the price and quality are satisfactory. The Russian market was not ready to buy for high prices and Viru Rand was not ready to lower the price."

Most of the production of Viru Rand historically has been exported to Russia and Ukraine.

Laanemets said the fish processor was engaged in many activities that were not related to production, such as trade, transportation and water purification. The company also had a big fishing fleet. When Laanemets got to the top, he started liquidating some of these activities and cut costs where possible.

In 1996 the company employed 1,630 employees. Viru Rand even won a special prize from the Estonian Confederation of Employers and Industry in 1997 for creating the most jobs. By early 1999 only 399 employees were left.

Laanemets dismissed only 42 employees after the purchase of the company's assets. He gave his new company a new name: Viru Kalatoostus. Hansapank financed his 52 million kroon loan.

There are 118 fish companies in Estonia, most of which are not doing very well after the collapse of the Russian market.

"I bought the assets of a bankrupt Viru Rand because I think that on the bases of these assets I can set put up a well functioning company," Laanemets said.