State lends support for industrial parks

TALLINN - Driving the increasing trend of diminishing manufacturing activity in the central parts of Tallinn, companies and factories are picking up and moving to more suitable locations on the outskirts of the city, or even further afield. This change in the business environment means that the role of business parks in and around the city is increasing.

Tallinn and its immediate vicinity have three areas under development for manufacturing facilities and warehouses: Peterburi road, Parnu road in Laagri and Tartu road between the city boundary and Juri. The biggest industrial parks in and around Tallinn now are Juri Industrial Park, Tanassilma Technological Village, Dvigatel Industrial Park, Keila Industrial Park and Lasnamae Industrial Park. The total areas of the parks vary, ranging from 30 to 85 hectares as companies have the opportunity to purchase the properties at prices around 80 – 100 euros per square meter. Moreover, in other parts of Estonia, around the larger cities, more industrial parks are being developed.

The Estonian government says it is planning to establish an industrial park totalling thousands of hectares in size in the north-eastern East Viru county, with which it is hoping to attract billions of kroons’ worth of investments and create thousands of jobs.

According to the proposal, adopted by the Ministry for Economic Affairs and Communications, the government, along with local governments, will provide nearly 900 hectares of state land, which have so far stood idle between industrial areas. This land will be offered to a new foundation, the East Viru Industrial Parks Development.

In the government’s opinion, the undertaking should attract investment in the amount of about 12 billion kroons (769.2 million euros) and create more than 4,000 new jobs. “Several large companies, from Germany, for example, have failed to come into the area, since the state has large areas of unreformed land there without a clear purpose,” said Regina Raukas, chief economic policy specialist from the ministry. She said local governments have been forced to simply say ‘no’ to businessmen, as there was no reformed land available in the area.

Raukas said the land in question did not pertain to residential or green areas. Nearly 200 million kroons is required for the planning and building of infrastructure necessary for industrial companies here, and most of this should come from the structural and regional development funds of the European Union. A corresponding bill has already received the approval of the government.

Narva, Johvi, Kohtla-Jarve and Kivioli will join the foundation established by the state, and co-operation agreements will also be signed with Sillamae and Pussi. The Johvi Industrial Park, Narva Industrial Park and Pussi Industrial Area Development will also join the scheme. The state and local municipalities hope to bring in logistics and transportation companies, which would attract suitable job openings, employees and transportation. “It’s hard to tell how the investment curve will change, but we’re in the fog for the near future. Industrial parks are an endeavor with a long horizon. Ida-Virumaa has potential,” said Juhan Parts, Minister for Economic Affairs and Communications.

According to Urmas Niine, with Kodu Grupp, the developer of Juri Industrial Park, foreign manufacturers are again interested in Estonia. “In fact, foreigners’ interest for production premises in industrial parks in Estonia has picked up again. Actually, 90 percent of [these firms] are foreign companies which are interested in production premises,” said Niine.
According to Ain Kaljurand, chairman of state-owned Port of Tallinn, in the last 3 - 4 years, the port has acquired territories in Muuga and in Paldiski. “This year we will continue investing in connecting the Muuga Industrial Park with the port area and will start building an overpass that will be completed in 2011,” said Kaljurand.

“We have developed infrastructure systems and connection roads. We have created the environment to attract [in] this zone especially those operators who create additional value. I hope that we will adopt the euro in 2011, which will boost foreign investment. We have available resources, good infrastructure. I am more than sure that these preparations will bear fruit sooner or later.”