Latvian, Estonian dairies team up in cross-border cooperation

Latvian dairy cooperative Piena Ceļš (Milky Way) plans to team up with Estonian cooperative Epiim and invest 100 million euros in a new dairy plant in Estonia for processing milk supplied by Latvian and Estonian farmers, Piena Ceļš board chairman Raimonds Misa told the LETA newswire August 20.

According to information published in the Latvijas Vestnesis official gazette, Piena Ceļš has made a decision on restructuring and will merge with Epiim into a new organization named Epiim Societas Cooperativa Europaea Limited.

Misa said that the goal of the merger of cooperatives is to strengthen processing of milk.

In his words, the project has already been approved by institutions administering EU funds, and the construction works may launch soon. The financial resources for the project will be ensured by both parties, also EU funds, a bank loan and private investments will be attracted.

Construction of the plant will cost about EUR 100 million year, and it should be completed in slightly more than a year. The new plant will process about one fourth of Latvia’s and Estonia’s aggregate milk. Estonia has been selected for construction of the plant because the Estonian partner developed the project, received the necessary support from the EU and the Estonian state.

Jaunpils Pienotava, a dairy processing plant that belongs to Piena Ceļš, will continue business as usual. The only change will be that it will now belong to more owners – both Estonian and Latvian farmers, and the Latvian members will also have shares in the new plant.

Misa said that cooperatives should join in the future in order to strengthen their positions in the market. “It is absolutely necessary. The present situation in Latvia – 33 dairy cooperatives – in such a small territory is absurd. It is not the future,” said Misa.

According to Firmas.lv, Piena Ceļš in 2018 generated EUR 18.065 million in sales, which is by 9.3 percent more than a year ago, and earned EUR 140,266 in profit in contrast to a loss a year ago.

Piena Ceļš was founded in 2004.

Epiim is owned by over a hundred local dairy farmers, and is one of the largest cheese and butter producers in Estonia.

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