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Norwegian investor BioBag looking to have a positive impact to keep the island of Hiiumaa truly green

Hiiumaa is the quietest of Estonia’s big islands. More than half of the county is covered by forests, making it the greenest in the country, and yet it is the centre of the Estonian plastic industry. Dagöplast, owned by the Norwegian group BioBag since 2015, is one of the biggest employers on the island; they are now looking to have a positive impact on the waste management of Hiiumaa to make the island truly green.

The high concentration of plastic industry on Hiiumaa is a Soviet legacy that has been revamped cleverly in the last few decades. Before 1990, many of the socialist agriculture collectives started small plastic productions in order to find new income streams. This laid the foundation for the specialised skills of Hiiumaa’s workers. After 1991, those who were more successful reoriented their products, approached new markets and became valued contributors to the local economy. Dagöplast, founded in 1997, has been leading the quiet plastic revolution ever since.

Life in Estonia talked to Jørn Johansen, Director of Sales and Marketing for BioBag, formerly CEO of BioBag International. Johansen has lived and worked on Hiiumaa for three years and is now cooperating with the county to create a sustainable waste management system.

What was the incentive for BioBag to buy Dagöplast three years ago?

Jørn Johansen (JJ): ‘We needed more space. We discussed if we could expand the factory in Norway but realised at the same time that Eastern Europe would be a great potential market for our products. That’s when we heard that Dagöplast was for sale.’

Now Dagöplast is almost three times bigger than the BioBag factory in Norway, employing around 100 people in Käina, on the southern coast of Hiiumaa.

What were the arguments for this location?

JJ: ‘Hiiumaa has a long plastic history, the level of competent people is high. We knew Dagöplast quite well. The total cost of business was cheaper than in Norway but this was not the main driver – we are not very labour-intensive, rather machine intensive. But we could save money on the labour side as well. It can be a challenge to find the right people, but so far, we have had no problems. We have even been able to attract some people from the mainland back to Hiiumaa.

Hiiumaa as a production location doesn’t seem like an obvious choice – the raw material is being imported; the products shipped from the island. Isn’t the island location a logistical challenge?

JJ: ‘Transport is a serious issue as we ship three to four truckloads daily. But it’s not a major problem. Our central distribution centre is in Tallinn, so all standard products are stocked there and from Tallinn we ship all over Europe and the world. Our biggest market as a country is the USA, then come the Nordics: Norway, Sweden, Denmark, Finland. The Baltic states are coming up as well more and more. That was our big hope with the business location – to see more waste management improvement in the Baltic states.’

BioBag has gone through a transformation over the 30 years that Johansen has worked for the company. It used to be only traditional plastic production but has now turned exclusively to compostable, biodegradable and recycling products.

JJ: ‘Our main focus is on waste management, especially organic waste. Compostable, biodegradable shopping bags, produce bags for fruit and vegetables, films for the hygiene sector, black films for the agriculture sector – biodegradable rather than synthetic planting films. Our own recycling factory recycles polyethylene for garbage bags. We make a lot of products for organic waste, composting or for biogas plants. For this you need really compostable bags that break down completely. That’s our core business.’

Considering the rural lifestyle on Hiiumaa, one would assume that composting is a rule rather than an exception. However, it turns out that waste management has been lagging behind and only now is the county starting to implement a biowaste collection and treatment scheme on the island. BioBag hopes to share its knowledge and experience from 18 countries.

JJ: ‘Treatment and collection of organic waste is a challenge in Estonia. Looking at the Scandinavian experience we are looking for examples of how and what to implement here. Hiiumaa can be a pilot for Estonia, where we can prove that it’s possible to collect and separate waste in an effective way. Hiiumaa is being called a green island, we hope that it will become a green island also in regard to waste management. In Hiiumaa, 500 tons of food waste is being transported to Pärnu right now annually. We want to collect and compost it on the island, turn it into high quality soil and give it back to the people here, to the farmers, to improve the soil quality.’

Treating biowaste locally is going to improve the ecological footprint of Hiiumaa within a few years. The ambitious project is set to start in 2020. Johansen is looking at it as a business opportunity but also as a chance to share the experiences of many years working in the field internationally:

JJ: ‘To treat waste requires investment, it’s not cheap. BioBag is a commercial company that wants to sell systems for good waste treatment. But in this case, our role is also to share knowledge. I’ve been working in this field in 18 countries. Small, medium-sized municipalities in Scandinavia would be good examples. When thinking beyond Hiiumaa, for places like Tallinn, Australia’s Adelaide is a great example of how to produce high quality compost.’

High quality compost is solving several problems at once. Especially when the climate crisis looms, the quality of soil is becoming a critical issue worldwide. So BioBag is on a mission here.

JJ: ‘Soil quality is a much bigger problem – we are used to taking and not giving back to the soil. In light of climate change, we have to realise this can’t go on. You have to give back.

But it’s also a good business case, and in the long-term hopefully a good saving. Just as using more sustainable materials instead of plastic, which is floating around in the oceans.’

You have lived on Hiiumaa for three years now. Even by Estonian standards it can seem a very remote place to be. How has your personal experience been so far?

JJ: ‘I come from a very small place in Norway, so it’s not so different. Hiiumaa is beautiful and full of life in the summer but, when the tourists disappear, it is very quiet. It is very good for working – no distractions here!’

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