Estonian Cell completes €20 million investment in Kunda

Estonian Cell.
Estonian Cell. Source: Rene Kundla/ERR

Aspen bleached chemi-thermochemical pulp (BCTMP) producer Estonian Cell has completed a €20 million investment in the Northern Estonian town of Kunda which will increase the company's production output as well as reduce its impact on the environment.

Estonian Cell installed the final devices connected to the growth investment program in June. This program will increase the company's production capacity to 185,000 tons per year as well as decrease its impact on the environment. The company launched the new equipment across last quarter, and the facility was opened on Wednesday.

"With this project, we built a new aerobic wastewater treatment plant which employs a new technology that will enable 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 fewer chemical and energy expenses," he continued. "Beginning this year, we will also increase our production capacity by 10 percent."

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

In 2018, Estonian Cell's production capacity totaled 165,000 tons of aspen pulp; all of the plant's output was exported. Last year, total sales amounted to €90.5 million.

In the 13 years that the company has been in business, it has invested €50 million on top of the original investment of €153 million, said Alfred Heinzel, one of the owners of Estonian Cell.

"When establishing the plant with the best possible technology in Estonia, I very much believed in Estonia's competitiveness in raising foreign investments," Heinzel said. "Unfortunately, Estonia's competitiveness in raising foreign investments decreased immediately following the launch of the Estonian Cell plant in 2006, which has limited new growth investments in our Estonian plant."

As a result, the company has carried out its large-scale projects — three modern paper manufacturing machines at a total cost of €380 million — in Austria, a country with lower energy prices and better predictability in political decisions, he added.

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

"I have stuck to my word and, in response to the excise reduction, invested the promised amount of €20 million," Heinzel said. "With this, we took the first step toward eliminating bottlenecks in production volumes, but also toward improving environment-related activity. In order to continue with investments, however, for the growth of the industry, we need even more competitive energy taxes, and more stable political decisions."

Subject to lower electricity excise rate

Prime Minister Jüri Ratas' (Centre) first government introduced a tax incentive for high energy intensity businesses under which an electricity excise duty rate of €0.50 instead of the usual €4.47 has applied to Estonian Cell since the beginning of the 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 million, the facility, which produces chemi-thermomechanical aspen pulp for export, 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 sole owner of Estonian Cell is Heinzel Holding GmbH, an Austrian-based leading producer of market pulp and packaging papers.


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Editor: Aili Vahtla

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