Birjo Must, newspaper Äripäev
E-Betoonelement, Estonian largest manufacturer of reinforced concrete elements, bought from the Swedish company Abetong AB half a holding in Swetrak, a company engaged in the design and production of railway sleepers. The other half of the holding belongs to Consolis OY, the parent company of E-Betoonelement.
Fred Holst, the Manager of Abetong AB that sold the holding, said that it is not reasonable for two competitors to share a company. “We believe that Swetrak should belong fully to our company or to Consolis OY and, all in all, it was the best solution for both parties,” added Holst. Abetong no longer has any holdings in Estonian companies.
Purchase price not revealed
“Purchasing shares in Swetrak allows E-Betoonelement to participate in the marketing of railway sleepers more actively,” said Vaido Leosk, the Manager of AS E-Betoonelement. He did not wish to give further comments on the purchase. He was not willing to reveal the purchase price either. The remaining 50% of Swetrak’s shares belong to Strängbetong AB, a subsidiary of Consolis OY. E-Betoonelement is a sub-contractor of Swetrak and produces sleepers for Swetrak at its plant in Rakvere. Swetrak is responsible for marketing the sleepers.
Close-up of the export market
According to Leosk, the volume of orders in Estonian market is relatively small and inconsistent in time. To produce sleepers efficiently, it is necessary to ensure a stable volume of orders. For this purpose, businesses must actively try to succeed in foreign markets. “Within Consolis Group, Swetrak can use its advantages in marketing and sales better than before,” added Leosk.
The concentration was verified by the Estonian Competition Authority since the activities of two companies in the production and sale of sleepers coincided as a result of the transaction. The joint market share of E- Betoonelement and Swetrak in the Estonian market of production and sale of finished concrete products was less than 40% in 2009. Therefore, the concentration was allowed.
According to Jaan Luts, the Manager of AS Tartu Maja Betoontooted, other Estonian companies do not produce railway sleepers and, therefore, this transaction does not affect the competitors of E-Betoonelement.