Estonian Dairy Firm's Bankruptcy Affects Baltic Milk Suppliers
The management of E-Piim Tootmine, a modern dairy production center located in Estonia, has initiated bankruptcy proceedings due to its inability to meet financial obligations. This situation has significant implications for milk suppliers in Latvia, as the company owes millions of euros to local farmers for milk supplies.
As of the beginning of the year, E-Piim's debts have amounted to 29 million euros. Efforts by the company's management to stabilize the financial situation have so far been unsuccessful. The company processes around 400 tonnes of milk daily, with a capacity for up to 1,000 tonnes, and produces cheese, including under the Latvian brand 'Jaunpils.'
Jānis Bērtulsons, a board member of E-Piim Tootmine, explained that the insolvency proceedings resulted from unresolved financial agreements among shareholders and financiers. He described the situation as a potential 'restart' rather than an end for the company.
The financial difficulties faced by E-Piim also affect its cooperative, SCE E-Piim, which is composed of approximately 100 Estonian and Latvian milk producers. Despite the financial turmoil, the factory has attracted interest from potential buyers across the globe, hoping to acquire it through the bankruptcy process.
Concerns are rising among Latvian farmers about recovering the money owed. Some farmers have reported delays in payment, with debts accumulating over three and a half months. Mārtiņš Cimermanis, head of the Latvian Rural Consulting and Education Centre, highlighted strategic missteps, noting that high milk purchase prices during a market downturn contributed to the current predicament.
While investments of over 100 million euros, including 15 million euros from Estonian state funding, have been made in the facility, there are currently no plans to downsize the workforce. Industry stakeholders remain hopeful that the factory will continue operations, although uncertainty persists regarding future pricing structures if farmers lose control over the facility.
