Estonia, Good for Business, Industry, Investments, Markets and Companies

Estonian Cell installed the last devices relating to the growth investment program in June. The program will increase the company's production capacity to 185,000 tons a year and will decrease the impact on the environment. The company started up the new equipment across the last quarter and the facility was opened on Wednesday.

"With this project, we built a new aerobic wastewater treatment plant that uses a new technology, which will able us to direct even cleaner wastewater into the sea and use significantly less electricity," Estonian Cell board member Lauri Raid said.

"The rest of the investments we made for expanding or replacing the aspen pulp manufacturing technology so that we can produce aspen pulp with less chemical and energy expenses. From this year we will also increase our production capacity by 10%," he said.

The main technology suppliers were Hager+Elsasser, Valmet, and Andritz.

In 2018, the production capacity of Estonian Cell was 165,000 tons of aspen pulp, and all of the plant's output was exported. In 2018, total sales amounted to 90.5 mln euros.

Alfred Heinzel, one of the owners of Estonian Cell, said that during the 13 years that the company has been in business they have invested 50 mln euros in addition to the original investment of 153 mln euros.

"When establishing the plant with the best possible technology in Estonia, I very much believed in Estonia's competitiveness in raising foreign investments. Unfortunately, Estonia's competitiveness in raising foreign investments decreased immediately after the launch of the Estonian Cell plant in 2006, which has limited new growth investments in our Estonian plant," Heinzel said. He said that because of that, they have carried out their large-scale projects -- three modern paper manufacturing machines with a total cost of 380 mln euros -- in Austria, a country with lower energy prices and better predictability of political decisions. 

Last year, the Estonian government decided to lower the energy excise duties for energy-intensive industries.

"I have stuck by my word and, as a response to the excise reduction, invested the promised amount of 20 mln euros. With this we made the first step towards eliminating bottlenecks in production volumes, but also improving environment-related activity. In order to go on with investments, however, we need energy taxes that are more competitive still and more stable political decisions for the growth of industry," Heinzel said.

The previous Estonian government introduced a tax incentive for high energy intensity businesses according to which an electricity excise duty rate of 0.5 euros instead of the regular rate of 4.47 euro applies to Estonian Cell from the beginning of this year. 

The government is considering expanding the circle of businesses eligible for the reduced tax rate and has agreed about completing a relevant analysis by February 2020. 

Estonian Cell's aspen pulp mill in Kunda launched production in 2006. With 205 mln euros, the facility boasts one of the biggest foreign greenfield investments made in Estonia over the last decade. The company employs 90 people directly and generates work for around 500 employees within its value chain. The company produces high-quality chemi-thermomechanical aspen pulp that is fully exported to countries in Europe and Asia.

The sole owner of Estonian Cell is Heinzel Holding GmbH, a leading producer of market pulp and packaging papers from Austria.