Finns take control of Estonia's top poultry producer

  • 2001-08-16
  • BNS
HELSINKI - In accordance with an agreement signed in June, the controlling stake in the Estonian poultry firm AS Tallegg went to a holding company owned by Finland's HK Ruokatalo and SwedeAgri Invest AB, HK Ruokatalo announced to the Helsinki stock exchange in a news release on Aug. 13.

It said due diligence at the Estonian firm was completed and the shares had been transferred.

Tallegg, based in the village of Loo to the east of Tallinn, is Estonia's largest producer of chickens and eggs. The company also has a strong presence in the Latvian and Lithuanian markets.

Ruokatalo said that the sales and profits of Tallegg have been constantly rising. Sales during the first six months of this year amounted to 227 million kroons ($12.9 million), an increase of 34 percent over the same period last year. Net profit rose 96 percent to 31.5 million kroons.

The firm's results so far this year are gratifying thanks to a growing demand for poultry, said Tallegg's CEO Ants Kasper. Tallegg endorsed a three-year investment plan on Aug. 8, according to which 150 million kroons are to be invested in expanding production.

"The meat market is very strong at the moment throughout the world; in Europe meat prices have grown nearly 20 percent, and poultry prices have, due to increased consumption, climbed 15 percent,"Kasper said. In his words, Tallegg anticipates a 150 percent turnover growth in the coming years, is planning to invest in broilers and will start using its slaughterhouse to full capacity. Tallegg's plans have been approved by the firm's new owners, Kasper observed. "It turned out in the course of due diligence that the company is even stronger than originally thought,"he noted.

By an agreement concluded in late June, both the European Bank for Reconstruction and Development and Estonian owners sold 54.7 percent of the shares in Tallegg to AS Baltic Poultry, owned in equal parts by HK Ruokatalo and SwedeAgri. Management control in Baltic Poultry now resides with HK Ruokatalo, with SwedeAgri Invest being first and foremost a financial investor. The acquisition of the controlling stake in the Estonian firm allows HK Ruokatalo to expand its share of the poultry product markets in Estonia and the two other Baltic states, HK Ruokatalo said. The Finnish company is also the owner of Estonia's largest meat processor, Rakvere Lihakombinaat, which is based in northern Estonia.