Eastern European Markets
September, 20. 2005

Hekotek strengthens through acquisition of Finnish Lekopa

On Saturday, 17th of September final contracts were signed as a result of which Estonian enterprise AS Hekotek acquired 100% of shares of Lekopa OY, i.e. the Finnish producer of mechanical timber processing equipment.

Hekotek is founded in 1992. It sells, designs, produces and installs technological equipment for timber processing industries. The number of full-time staff is 92 and the forecasted turnover of Hekotek in 2005 is about 12 million Euros. About 70% of production of Hekotek is being exported, mainly to Russia.

The production and office facilities (3 200 m2) of Lekopa OY are situated in the middle of Finland, in Lehtimäki. There is currently 26 employees working at the company. There will be no major changes concerning the personnel and means of operating. Jukka Niemi will proceed as CEO of Lekopa OY.

Hekotek and Lekopa have been collaborative partners for many years. In many new sawmills built in Baltic states at the beginning of 2000, successful co-operation has been conducted - Hekotek has delivered log treatment equipment and Lekopa sawn timber treatment equipment. In spring of 2004 Hekotek outsourced manufacturing of board-treatment line from Lekopa, for new sawmill of ZAO Lesozavod 25 ( in Arhangelsk, Russia. In 2005 autumn, Hekotek will deliver a sawn-timber sorting line to OAO Onega LDK, situated also in Arhangelsk region of Russia. The manufacturing and installation is conducted in cooperation with Lekopa specialists.

Through the acquisition of Lekopa by Hekotek these two companies are trying to find synergy in areas of sales, project management, designing capacity and sharing knowledge base. As a result of merging the capacities of the two companies Hekotek will be able to fulfill larger orders than before and also delivery times of production will be shorter. Custom-made equipment will be delivered in collaboration to companies in Russia, Baltic states, Scandinavia and other European countries.

After the acquisition of Lekopa the Hekotek’s consolidated turnover of 2005 will be about 15 million Euros.

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