Estonian Wolf Group acquired shares of Brazilian manufacturing plant Elasteq

Wolf Group, a leading European producer and exporter of PU foams, joint sealants and breathing facade solutions, acquired 40% of Elasteq do Brasil Ltd shares, a manufacturing plant in Brazil.  The production plant of Elasteq is located near Sao Paulo, one of the largest cities in South America, and the company specializes in the manufacture and sale of water proofing products.  The transaction price is confidential.

Wolf Group, which started exporting to Brazil in 2009, is fully satisfied with the results there. "Previously Brazilians lacked the culture of using foam and insulation materials," recalls Wolf Group CEO Jaan Puusaag. "The popularity of construction foams has grown significantly within five years," Puusaag went on to say and pointed out that, “in the beginning only straw foams were introduced as the Brazilian market was not ready for other products, but now the proportion of gun foams is beginning to grow.”

Within five years, Wolf Group exports to Brazil have increased tenfold. Last year the export to South America was over a million Euro.

Puusaag said the acquisition of shares is an important strategic step that will further strengthen the Wolf Group positions in the South American market and significantly diversify the portfolio of products offered through waterproofing product development and sales.
“I believe this new cooperation is a win-win situation for both Wolf Group and Elasteq,” said Kari Mikkonen, CEO of Elasteq. “This partnership gives us more muscles, products and strength. Brazilian market is big and very competitive. In order to grow big you need to be very strong and know how to play the local game,” he added. 

According to Mikkonen, establishing industrial operation in Brazil is very bureaucratic and time-consuming. Finding a Brazilian company which to acquire isn´t easy either. “In Elasteq we speak the same business language with Wolf Group, and the business segments of Wolf Group and Elasteq are similar, so the general understanding of different issues is fluent and natural,” said Mikkonen.

The capacity of the construction sector in Brazil is estimated at around 55 billion Reais, the volume of the water proofing market is about 3% to 1.65 billion Reais, which equals about 640 million Euro. 

Wolf Group unites the sales and production enterprises of the leading European producer of construction chemicals and materials Krimelte, both in Estonia and abroad. Wolf Group factories are located in Estonia and Russia, sales units are in Estonia, Latvia, Lithuania, Ukraine, Romania, Bulgaria, Denmark and Kazakhstan. As of the end of 2012, Wolf Group employed a total of 270 people.