Construction, Estonia, Investments, Legislation, Mergers and take-overs, Real Estate

"For now we intend to get the manufacture of peat briquettes going again with high efficiency and to ensure the heating of the village. These are our first priorities, and when we have got to know the company well enough we will start making development plans and investments too," Indrek Pappel, board member of KMG Inseneriehitus, told BNS on Tuesday.

He said that as the first thing the company will re-hire the 20 employees previously dismissed and may hire additional workers in the future.

Pappel said that even though peat and peat briquette production in Estonia is at a low ebb and the prices of raw materials on the global markets are low, they hope the investment to pay back in the long term.

"Whereas construction is actually our core business, we have also been active in the field of energy. We have a wind turbine at Vaike-Maarja, in addition we deal with pellets," the manager said.

He added that since the core activity of KMG Inseneriehitus was very much project-based, they had been on the lookout for a business with a more stable cash flow.

Sangla Turvas, which used to be the biggest employer in the east-central rural municipality of Puhja, was declared bankrupt in May 2015. In April this year the company laid off 16 workers and continued to produce only heat energy.

Previously auctions announced by the trustee to sell off the company's assets with a minimum price of 5.4 million euros and 3.2 million euros failed.

Sangla Turvas earned a profit of 11,569 euros on sales of 7.9 million euros during the business year ended in April 2014. Its assets grew 30.6% over the year to 1.5 million euros. The company then employed 83 people and its payroll costs totaled one million euros.

According to the company's previous manager it was Swedish partner Soderenergi's unwillingness to fulfill the long-term contract under which the company was to buy 40,000 tons of peat briquette each year that sealed the fate of Sangla Turvas.