Skip to main content
invest in estonia


Estonia’s favourable business climate attracted Finnish Metsä Group to invest millions of euros in the Pärnu plywood factory

Estonia's favourable business climate, ease of doing business, and good logistics connections convinced Finnish Metsä Group to invest €55M to build combined plywood factories near Pärnu, Estonia, and Äänekoski, Finland, which now generate tens of millions of euros in turnout annually.

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.

Could Estonia be the perfect business location for your company too? Use our smart location attractiveness comparison tool and find out!

News & events

Need more information?

Need more information?

What is it like to run a business in Estonia? How to benefit from the e-solutions and the efficiency of our business culture? What are the opportunities in specific sectors? Who to partner up with?

The Estonian Investment Agency’s team is happy to help you via its complimentary e-Consulting service, organize online or offline follow-up events such as virtual investment visits and guide you through the fairly simple process of investing in Estonia.

Request e-consulting