A birch plywood factory near Pärnu is entering its fifth year of operations and offers employment to hundreds of local residents. Metsä Wood Eesti had a turnover of more than 37 million euros last year, and the company employs close to 200 employees. The jobs are stable, as the 1,520 employees of the entire Metsä Wood business unit have an average tenure of office of 15 years.
“Metsä Wood is one of the most outstanding companies in Pärnu and Lääne County,” confirms Mihkel Kärg, regional investment consultant at Invest Estonia. “Their products are focused towards export, and they provide value added to raw material imported from Finland.” Many companies in Western Estonia specialize in mechanical timbers processing, but none of them has the turnover numbers of Metsä Wood, adds Kärg.
This success had already been recognized as Metsä Wood Eesti was awarded the title of the promoter of Pärnu County in 2019. This is due to the value-add approach at the heart of its business. “For Metsä Wood, it is crucial to produce goods with the highest value added and to leave that in Estonia by exporting their most highly ranked products in the value chain,” Kärg explains the advantages of Metsä Wood.
The last phase in Metsa Group’s production chain occurs in the Pärnu factory. “Plywood sheets are transported from the Äänekoski factory in Finland to the Pärnu factory where they are bonded together, pressed, sawed, etc.,” explains Kärg. “After that, the trucks transport them to clients in Europe.” Metsä Wood mainly exports the products finished in Pärnu to Germany, France, and their surrounding countries.
The high-quality plywood produced in the factory is used primarily in the construction, industrial and logistics sectors. The factory’s director August Killing says: “The plywood we produce can be found on the floors of trailers, for example, but it is also used in LNG carriers to insulate the body and prepare the casting molds of concrete. The biggest difference from our factories in Finland is that the Pärnu factory can create products with Flex plies in addition to ordinary plywood products. It can also produce in sizes L, XL and KZ, the largest of which is 2.6×13.5 meters in area. Although the factory is still new to producing plywood and the developments in the first years have been rapid, thanks to our good employees, we have proven ourselves as a trustworthy partner to our clients.”
A favourable business climate was responsible for bringing millions of euros to Pärnu
Metsä Wood’s plywood factory, with an area of 29,000 square metres, has a production capacity of 50,000 cubic meters. A joint project by the factories of Äänekoski and Pärnu necessitated an investment of 55 million euros. In addition, Metsä Wood is a vital tax contributor in Estonia. The birch plywood factory generates more than 330,000 euros of tax revenue for the city of Pärnu. The company also pays the state more than a million euros in social tax annually.
Metsä Wood’s entry into Estonia also created a strategic investor for the Niidu industrial region. “Metsä Group’s investment was based on Estonia’s favourable business climate and good logistic connections with primary markets,” notes Sulev Alajõe, Western Estonian investment consultant at Invest Estonia at the time the company entered Estonia.
According to Alajõe, Pärnu’s developed infrastructure and position next to one of the main highways, Via Baltica, helped attract Metsä Wood investments in Estonia. In addition, energy from Fortum and the recently developed water systems were also nearby. “The fact that Estonia is an IT country was also definitely a contributing factor,” Alajõe says.
Industrial companies are thinking about automating their technologies, and the know-how exists here. Alajõe points out that Estonia was chosen because of our trustworthiness and the similarity of our business culture with the Finns, eclipsing neighbouring countries.
In addition, conducting business is easy in Estonia. “Both the local and the state level have always been very supportive of us. The digital society is a pleasant surprise,” Killing says.
Invest Estonia as a support structure
In addition to Lääne County and Pärnu being rich in forests and Estonia’s warm business climate being attractive, constant communication with investors is essential to keep companies growing in Estonia. Kärg has made this his personal goal. It means regular contact, following companies’ developments, gathering feedback and concerns hindering the implementation of growth strategy and forwarding proposals to policymakers.
Invest Estonia helps offer potential measures to help execute investments through the company’s development plans. “Firstly, I offer them our organization’s support measures and services. I provide them with information about when the measures become available and the conditions and requirements for applying. I also forward them information about different conferences and cooperation opportunities, for example, with research institutions or as part of various projects,” Kärg explains.
Sustainability as the future
Metsä Wood’s birch plywood factory in Pärnu has future plans related to the consistent increase in production efficiency and the fulfilment of sustainability goals. Metsä Group has set a goal for 2030 to reduce their fossil carbon dioxide gas emissions to zero and fully utilize the byproducts created in the production process.
It also doubles production efficiency with employee training, projects for decreasing production waste, and other measures. The improvement of management culture and focus on diversity, inclusion, and equality in the team are also essential in Metsä Wood’s journey to a fully sustainable future.
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