- €29 million loan from the EIB for investments dedicated to expanding significantly the existing production capacity in Estonia
- The new plant will process milk and produce high value-added dairy products such as hard and semi-hard cheese, pasteurised cream and sweet whey powder
- The EIB financing is being provided under the Investment Plan for Europe
The European Investment Bank has signed a €29 million loan backed by the Investment Plan for Europe with E-Piim Tootmine, the largest cooperative based dairy producer in Estonia to support the construction of a greenfield dairy plant. The proposed investment has a total project cost of around €154 million and underpins E-Piim’s strategy to increase the competitiveness of its business through expansion of capacity.
The new plant, located in Paide, Estonia, will partially replace some ageing manufacturing facilities and expand significantly the existing production capacity, whilst also adding a fourth production facility. It will process milk from its cooperative members into high value-added dairy products such as hard and semi-hard cheese (gouda and cheddar) and pasteurised cream.
The plant will also produce sweet whey powder from its own activity and from the external supply of whey concentrate. The new plant will process up to 1 150 tonnes per day of milk, as well as 85 tonnes per day of whey concentrate.
The investment will also support sustainable agriculture. The company promotes sustainable animal rearing among its cooperative members, who are its milk suppliers. Furthermore, the company implements a Zero Net Carbon Company programme, targeting zero net carbon emissions by 2040 and a reduction of 55% by 2030, including with its milk suppliers.
EIB Vice-President Thomas Östros commented: “The EIB is proud to finance E-Piim’s ambitious investment plan, even more so as this is the first EIB direct lending operation with an Estonian agri-food mid-cap. The EIB loan will contribute to supporting rural economic development and help strengthen a critical agri-food value chain.”
Janusz Wojciechowski, European Commissioner for Agriculture and Rural Development, said: “I welcome this agreement between the EIB and Estonian dairy producer E-Piim, which will help to build a sustainable and animal-friendly food system. The financing will enable E-Piim to modernise its infrastructure, promote sustainable animal rearing, and reduce its emissions by 2040. This is in line with our environmental ambitions.”
E-Piim CEO Jaanus Murakas said: “E-Piim’s new dairy factory being built in Paide is an important project for the country. This new dairy plant will cover Estonia’s missing raw milk processing capacity, strengthen Estonia’s dairy sector and Estonian dairy products’ competitiveness in the world market and enrich Estonian rural life. The new factory will be the most modern in our region and enable us to meet our environmental targets. E-Piim is proud that the EIB considered our project important to finance and we can now implement a nationally important project with the EIB’s support.”
The project’s promoters and main equity providers are E-Piim Tootmine’s parent company (SCE E-Piim Dairy Cooperative, the largest dairy cooperative in Estonia, with around 73% of the shares) and two experienced Dutch dairy companies (Interfood B.V. and Royal A-Ware B.V., together owning some 25% of E-Piim Tootmine’s shares). As strategic investors, Interfood B.V. and Royal A-Ware B.V. will also be acting as long-term offtakers for around 84% of the company’s dairy output.
Background information
The European Fund for Strategic Investments (EFSI) is the main pillar of the Investment Plan for Europe. It provides first loss guarantees that enable the EIB Group to invest in riskier projects. The projects and agreements approved for financing under EFSI have to date attracted investments totalling €546.5 billion and benefiting more than 1.4 million SMEs.
E-Piim is one of the largest cheese and butter producers and exporters in Estonia, owned by more than a hundred local dairy farmers. E-Piim dairies were established at the beginning of the 20th century: the first one in 1910 in Põltsamaa and the second in 1911 in Järva-Jaani. E-Piim dairies produce cheese, butter and milk powders from more than 120 000 tonnes of pure domestic raw milk per year. E-Piim’s consumer packaged goods are sold locally and in neighbouring countries and its commodity products are exported worldwide.