Aound €30 million in unpaid invoices remains, but the company's new Saudi owner has said at least future invoices will be paid in time.

AS E-Piim Tootmine was declared bankrupt in March and its Paide and Põltsamaa plants were earlier this month bought at auction by Saudi retailer BinDawood for over €135 million, a sum higher than anticipated.

E-Piim's Paide plant alone is capable of processing nearly 40 percent of Estonia's milk production, with raw input coming from dairy farmers nationwide; the company is also Estonia's largest cheesemaker.

The new owner says it plans to invest in expanding E-Piim's market share, but there is unfinished business over the €30 million owed to farmers in Estonia. A delegation from BinDawood was in Tallinn Thursday and met with Minister Terras.

 "The debt situation is quite complicated. There was debt owed by the cooperative to its own producers. I am not currently familiar with the cooperative's proceedings; restructuring and bankruptcy proceedings have also been discussed there," Terras said.

BinDawood CEO Ahmad BinDawood has pledged dairy farmers' invoices will not go unpaid in the future and that payments would be made on time. "We want to build good relations with farmers because they are the foundation of our success," he said.

Terras was also confident the deal should ease the concerns of Estonian dairy farmers. "The fact that the Paide plant was bought up is surely very good news for the Estonian dairy market. It is a place where Estonian producers can deliver their milk," he said.

Ahmad BinDawood said the aim is to increase E-Piim's market share and to expand into EU markets, adding E-Piim's skilled workers will be instrumental in achieving these goals, meaning their jobs are not at risk.

Local investor Joakim Helenius took part in the auction. He, too, said the eventual buyer may be a boon. "It did end up in foreign hands, but in the hands of foreigners who could potentially be of great benefit to Estonian dairy farmers and the Estonian economy," Helenius said.

Helenius had been part of a consortium of Estonian companies hoping to keep E‑Piim in local hands, but the advantage of the new owner is that it may open the Middle Eastern market — which due mainly to climate relies heavily on imports despite its large dairy sector — to Estonian dairy farmers.

However, E-Piim's plants will need investment in equipment for producing higher-protein products, and this investment may be difficult to obtain in the short term due to a glut of orders, Helenius added. "All dairy processors want the same equipment right now. It will certainly take a year and a half or two years before the plant has the equipment installed."

Saudi retail giant BinDawood Holding won the auction for the two plants with a €135.25 million bid, well above the €80 million starting price. The deal, submitted through its Estonian subsidiary, marks BinDawood's first major move into Europe's dairy industry and is part of its strategy of expanding food-sector investments. A third E-Piim plant in Järva-Jaani, Järva County, with a starting price of €8 million, drew no buyers.

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