The fact-finding business trip was organised with a view to introduce new investments by the European Union and the Estonian government in East Estonia and to offer new opportunities for Finnish companies. The two-day trip started off with a seminar “Why to East? Opportunities for Finnish companies” in which the Ambassador of the Republic of Finland to Estonia Timo Kantola introduced the opportunities of the Ida-Viru region. The Minister of Public Administration of the Republic of Estonia, Jaak Aab added that the future of East Estonia looks bright and that there are many new opportunities to take advantage of. Indeed, relatively low manufacturing setup costs, highly developed infrastructure and transportation system reveal substantial opportunities for prosperous investments in the region.
East Estonia with its long industrial history is ready for green investments
Over the two days the delegation visited Estonian companies such as the aspen pulp mill of Estonian Cell which has been one of the largest foreign investment projects in Estonia, Aquaphor, the leading water filter manufacturing, research, and development company, as well as Fortaco Group that is the leading brand independent strategic partner to the heavy off-highway equipment and marine industries.
The delegation also visited the main port in the region – Port of Sillamäe (Silport). The port of Sillamäe is the second largest in Estonia and the fifth maritime trading port in the Baltic States, which plays an increasing role in Estonia and especially in the transportation system of North-East Estonia and international logistics. The advantages of a favourable location, the depth of the berths of up to 16 m and the Free Zone of control type 1, which makes it possible to transfer ownership of goods with 0% VAT rate, make the Port of Sillamäe an attractive destination for all types of export, import or transit cargoes.
Additionally, the visitors got a chance to learn about the Industrial Areas Development Foundation (IVIA) – a development organisation created by the public sector that is developing five industrial and business parks in the Ida-Viru region and has supporting infrastructure. The goals of the foundation include attracting and supporting new industrial and logistic companies, as well as creating new workplaces.
Ilmar Branno, Invest Estonia’s Director of Regional Business Development in Eastern Estonia, explained that in addition to a good economic environment, the Ida-Viru region is a traditional industrial area. The region has a long history in industrial development – the Kreenholm textile factory was opened in 1856 and at one point, the company’s cotton spinning, and manufacturing mills were the largest in the world. Additionally, oil shale plays an important role in the region and has been mined for over 100 years, paving way for energy and chemicals industries in the region.
According to Branno, Ida-Viru region is open for green investments, and industrial investments and factories are first and foremost expected here.
Green transition in East Estonia with the help of investments and funds is on its way
In her speech at the UN Climate Change Conference COP26, last year, Estonia’s Prime Minister Kaja Kallas emphasised that stronger economies must support developing countries that are at the forefront of the climate crisis. Estonia has a lot to offer in terms of the transition to climate neutrality: the experience of the digital revolution, smart solutions from startups, and ways to ensure access to global environmental data for all those in need.
The EU and the government of Estonia are bringing new investments to Eastern Estonia. For example, to increase the economic and the entrepreneurial activity of the Ida-Viru region, the state aid in the maximum amount of €990,000 is being introduced. The purpose of the aid is to contribute to the creation of new jobs in the region’s manufacturing industry with a higher-than-average salary.
Additionally, the Just Transition Fund – the allocation of €340M from the European Union creates new possibilities for economic development in the Ida-Viru region. At the county level, a Just Transition means a restructuring of the CO2-intensive economy. This includes the restructuring of the oil shale sector as well as the diversification of the region’s economic environment, together with the development of employees’ skills and the improvement of the living environment, which ensures regional employment, income retention, and Estonia’s strategic electricity supply. The fund’s grants and subsidies will most likely be available in the near future.
Several members of the delegation said that the business trip to Eastern Estonia provided some interesting ideas and the region is definitely worth looking into. Pilvi Hämäläinen, the Estonian Investment Agency’s Director of Business Development in Finland, encourages companies to look at Eastern Estonia with an open mind and to get acquainted with new business support packages and the opportunities offered by the region. “The region has strong roots in the industry. Estonians are agile and innovative, and Eastern Estonia is no exception. New developments lead the way to new opportunities for Finnish companies,” she said.
The trip was organised by Invest Estonia in cooperation with the Embassy of Finland in Tallinn, the Embassy of Estonia in Helsinki, the Finnish-Estonian Chamber of Commerce, and the Finnish-Estonian Chamber of Commerce.
Read more about the business opportunities that East Estonia offers here. If you are interested in investing or doing business in the region, feel free to use our e-Consulting service and a personal investment advisor will get in touch shortly.