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International Internet Magazine. Baltic States news & analytics Monday, 26.08.2019, 03:55

Estonian dry goods producer Veski Mati to move production to Latvia

BC, Tallinn, 06.11.2018.Print version
Estonian dry goods producer AS Balti Veski operating under the Veski Mati brand decided with the Lithuanian parent to move the company's production operations to Latvia, decreasing the number of employees in the Estonian unit by two to four people, informs LETA/BNS.

"The decision to move Balti Veski's production operations to Latvia was made with the parent AB Baltic Mill in August and during this fall, we have started to move the factory step by step. I would definitely like to stress that this absolutely does not mean that Balti Veski will finish its operation in Estonia," Lauri Motsnik, chairman of the board of Balti Veski, told.  

Motsnik said the Lithuanian parent's decision stems from a wish to remain efficient even though the situation is tense in the global grain market.

"In order to fulfill the historical purpose of Balti Veski AS and ensure our customers get the highest quality product at a competitive price, our production has to be reorganized. Consolidation of processes creates opportunity for bigger growth," Motsnik said. 

"Packaging and production has become increasingly more automated and due to this, sooner or later, a part of jobs will disappear entirely," he said, adding that in today's market situation the process will take place sooner rather than later. "For that reason, due to the current change, the number of workers at Balti Veski AS will decrease by two to four people," Motsnik added.

The entire production of Balti Veski AS will be moved to Latvia and the office in Estonia will only employ a sales team, who will be coordinating local cooperation with grain producers and trading companies. Product development will remain in Estonia, too, and decisions regarding the Estonian market will still be made in Estonia.

There will be no changes for partners and consumers as the company will continue providing over 100 cereal products and all existing product groups, which will be supplemented by several new products in the near future due to recent investments, the head of Balti Veski said.

The Lithuanian parent AB Baltic Mill has announced its intention to invest 10 mln euros in the Baltics to strengthen the company's position in these markets, and an important step towards achieving that is moving the production from Estonia to Riga. 

Spokesperson for grain processor Rigas Dzirnavnieks, which is also owned by AB Baltic Mill, said that the company's factory in Latvia is undergoing a process of modernization to enable production of packaged peas and beans products. Production of pasta products is also being prepared. 

In 2016, Balti Veski had 15 employees and the company saw a revenue of 3.6 mln euros, earning a net profit of 441,600 euros.


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