Alfred Heinzel who owns Estonian Cell, a pulp enterprise, has acquired Vao Agro, another Estonian dairy farm located in Väike-Maarja municipality. The Austrian acquired the dairy farm through Heinzerl EMACS Betellingungs AG which belongs to Heinzel and also owns Estonian Cell.
This makes him the third Austrian businessman to own a dairy farm in Estonia. Vaklak Group owns 7 farms and United Farms has another seven. Altogether, Austrian investors now owns 15 dairy farms in Estonia.
Artjom Sokolov, board member and CFO of Estonian Cell and new member of supervisory board of Vao Agro, says that the acquisition was not a speculative deal, but a serious investment. “At the same time the Heinzel Group has no plans to start buying farms from all over Estonia. We are not going to compete with Vaklak or other companies as to who owns the largest number of dairy farms in Estonia,” said Sokolov, but did not rule out that the company was considering more purchases.
Vao Agro has revenues of 1.3 million euros and its profit was 0.4 million euros in 2011. The company has 19 employees. It has 846 bovine animals including 400 dairy cows.
Heinzel no newcomer in farming
Sokolov says that in Austria, the company owned by Alfred Heinzel has been harvesting cattle for years. “Heinzel Holding knows the local business environment since it has been doing business in Estonia since 2004. Vao Agro was acquired because the group has an operating management in Estonia. Another reason is that Vao Agro is not located far from Estonian Cell,” said Sokolov. Uuno Lausing, former shareholder of Vao Agro and CEO of Tartu Mill, said that the owners decided to sell because dairy farming was not their main business.
“The deal with Heinzel was signed in May as a result of six months of intensive negotiations,” said Lausing, refusing to name the purchase price. Lausing has also a holding in two pig farms Aiu Põllumajandus and Kaubi Farmid, but said that they were not for sale.
Competitor: cheap land is attracting investors
Endel Mäesepp, CEO and owner of Müüriku Farmer, says that the acquisition of Vao Agro could increase competition in the market of farming land. “I don’t know what are the objectives of Austrian investors, but if they wish to purchase more land, it could create price pressure. There is no agricultural land on sale in our area right now, but at the right price everything is on sale,” said Mäesepp.
He added that Austrians and other foreign investors are attracted to Estonian farming because of suitable climate and cheap land.