Eastern European Markets
September, 30. 2005

Vapo expands to Latvia

Vapo’s operations in the Baltic Countries are expanding to Latvia. Vapo has bought a 95% holding of Seda, a Latvian peat producer, from a Dutch investor and the operative management of the company. Vapo also intends to make a bid for the rest of the shares, which are currently owned by local individual persons.

Seda produces peat in the Valka Region, where it owns over 1 800 hectares of bogs that are suitable for peat production. In 2004 a total of 736 hectares was in use, and the total production was 510 000 cubic metres. The whole production has been in the form of growing media, sold mainly to Germany. The company has a growing media production plant in Seda, where peat is packed into giant bales.

In 2004 Seda’s turnover was ¤ 3.2 million, and the profit ¤ 0.2 million. The number of personnel was 200, of whom a part only works during the harvesting season.

According to Juhani Hakkarainen, Vapo’s Director of Energy Division, Vapo’s strategic goal is to establish a leading position in the Baltic Sea Region as a supplier of local fuels, and also to increase the production of heat and electricity in the Baltic Countries, based on their own energy resources. “At the same time we will be able to utilise the raw material available in the bogs for growing media production. Our goal is market leadership in the European bulk peat market. A wider production area also minimises the risks caused by weather conditions”, Mr. Hakkarainen continues.

Vapo has 8 000 hectares of peatland reserves in Estonia, where Vapo’s subsidiary Tootsi Turvas holds a leading position. Seda and Tootsi Turvas will co-operate in peat production.

New Managing Director for Tootsi Turvas

Mr. Lauri Korkeala has been appointed Managing Director of Tootsi Turvas AS, effective from 1 September, 2005. Earlier he worked as Country Manager. The earlier Managing Director, Mrs. Kai Mäeleht has been transfered at her own request to another position in the company.

Further information:
Juhani Hakkarainen, Director, Vapo Energy, Tel. +358 (0)400 688 313
Matti Hilli, Managing Director, Vapo Oy, Tel. +358 (0)40 500 9549

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