Finnish Valio to buy Estonia's largest dairy

TALLINN (ETA) - Finnish dairy concern Valio plans to buy Estonia's
largest dairy Shinenud Meiereid. Talks on the purchase are ongoing,
and the representatives of Valio on Jan 11 visited the plants of
United Dairies.

"Sales offers have been made to Valio and negotiations have taken
place,"said Mati Mulder, member of the council of AS Tablia, one of
the subsidiaries of Valio Eesti.

Mulder said that United Dairies is attractive to Finns because of its
trademarks and large market share.

"Previously United Dairies concentrated on export, and its share in
the Estonian market was small, but during the past year they have
upped their share in the domestic market," Mulder said.

"Valio has done well in Estonia, and we have considered ways for
increasing production here, said Reijo Vatanen, spokesman for Valio
OY.

"One of the ways is to expand the existing Laeva dairy plant and the
other way is to buy some other plants,"Vatanen said. "We are
considering ways for buying United Dairies and the deal is likely."

This news comes one day after three plants of United Dairies - PÎlva
Piim, Mulgi Meier and Paide Piimakombinaat - said they were merging.
The merger was approved by the three plants separately, as well as by
the parent United Dairies. After the merger, each of the three plants
will concentrate on a certain dairy product, which will lower costs
and would also mean that around 200 people are made redundant.

United Dairies has also saved costs by scrapping the positions of the
director general, financial director and commercial director.