OREANDA-NEWS. November 09, 2011. Hekotek, a machine and metal industry company operating in Juri outside Tallinn, has signed a 20 million euro contract with the Russian forestry company Lessosibirsk LDK NO 1, the daily Eesti Paevaleht reported.

Earlier Hekotek has supplied to the company a round timber sorting line. By the new contract recently signed the earlier installions dating from 1968 will be replaced by new and more powerful ones and according to Lessosibirsk LDK NO 1 is the Russian company with the biggest annual output.

Under the contract signed with Hekotek two round timber feeding installations and a conveyor system will be acquired from the main contractor, while two bark removers and and the sawing line from the Finnish partner, Valon Kone OY and Veisto OY and two sawn timber sorting lines in cooperation with the Finnish subsidiary Heinola Sawmill Machinery.

Although there are three more companies behind the same seller, only the Estonian company's name is reflected in the contract, a characteristic legal nuance in conducting business in Russia.

Delivery of the equipment to the Lessosibirsk sawmill in Karsnoyarsk Krai will start about midsummer next year. According to Hekotek's forecast the equipment will be transported on 120 railway wagons and will be installed on location. In  oline with the contract the cost of the equipment should be transferred by November 11.

Lessosibirsk LDK No 1 can saw its first timber with the new machines only at the end of last year. According to Hekotek sales director, Tonis Haldna, the company will start delivery of the equipment about the end of next June and it would take four weeks. Customs formalities will follow and installation of the equipment will last another half a year, he told the paper.

Haldna said that talks over new equipment were now going on with the same company but not in the same range with the present order.

In fact, Russian companies are the main contractors of Hekotek's equipment, the paper wrote. The company has thought about building a factory in Russia. Haldna said that there were plans to establish a joint venture in the Urals, but as the production and labor costs were practically at the same level as in Estonia or even higher, the plan was dropped.

The turnover of the 1992-established Hekotek was more than 17 million euros last year with the operating revenue at above 2.1 million euros, The company has 70 employees. The company operates on export markets with the local sales representations.

Hekotek belongs 82.5 percent to Lifco Group, a company based on Swedish capital headed by the Swedish businessman Carl Bennet.