BinDawood promises E-Piim investment as €30 million debt remains unresolved

Saudi retail company BinDawood has bought the bankrupt E-Piim dairy producer’s factories in Paide and Põltsamaa and says it plans to invest in expanding the company’s market share, ERR reported. The fate of E-Piim’s 30 million euro debt to farmers remains unclear.

BinDawood paid more than 135 million euros for the factories, a sum that was unexpectedly high even for the Saudi company.

Investor Joakim Helenius, who took part in the auction with an Estonian business consortium, had previously hoped to keep E-Piim in local ownership. He now hopes the new owner will open the Middle Eastern market to Estonian dairy producers.

“It did end up in foreign hands, but in the hands of foreigners who could be of great benefit to Estonian dairy producers and the Estonian economy,” Helenius said.

BinDawood Chief Executive Ahmad BinDawood said the company wants to increase E-Piim’s market share and expand into European Union markets. He also stressed the importance of E-Piim’s skilled workers and said jobs were not at risk.

The E-Piim factory in Paide can process nearly 40 percent of Estonia’s milk production. Agriculture Minister Hendrik Johannes Terras said the deal should ease concerns among Estonian dairy producers.

“The purchase of the Paide factory is certainly very good news for Estonia’s dairy market. It is a place where Estonian producers can take their milk,” Terras said.

However, Terras said the final fate of E-Piim’s 30 million euro debt to farmers had not yet been determined.

“The debt situation is quite complicated. There was debt owed by the cooperative to its own producers. I am not currently familiar with the cooperative’s procedure. Restructuring and bankruptcy proceedings have also been discussed there,” the minister said.

Ahmad BinDawood promised that farmers’ invoices would be paid in the future and that payments would be made on time.

“We want to build good relations with farmers because they are the foundation of our success,” he said.

BinDawood became interested in Estonia primarily because of its high-quality raw materials and technology.

Helenius said the E-Piim factories would need investment in equipment for producing goods with higher protein content, but that obtaining such equipment could be difficult.

“All dairy processors want the same equipment at the moment. It will certainly take a year and a half or two years before the factory has the equipment in place,” he said.