RIGA - Finland's Metsaliitto Group announced this week that it has dropped plans to build a pulp mill in Latvia, ending the long saga of what had potentially been the single largest investment project in the Baltics.
After meeting with Prime Minister Aigars Kalvitis, Eero Kytola told reporters that the 900 million euro project made little sense since it lacked the support of Latvians. "If the government, Parliament and the Latvian population do not want a pulp mill, we won't build it," he said.
Kytola said that Metsaliitto and the government had nearly reached an agreement a year ago on construction of the pulp mill in Ozolsala, in the eastern part of the country near the Daugava River, but once the state environmental effects assessment office prohibited the use of the proposed bleaching method 's on the basis that the latter could have threatened the delicate ecological system and fish resources in the river 's the project no longer made economic sense.
He stressed that all pulp mills in Finland use this technology and other methods were used very rarely.
Metsaliito could change its decision not to build the pulp mill in Latvia when "conclusions will be made based on facts, not assumptions," Kytola said.
Kalvitis, in the meantime, did not hide his disappointment in the decision. "We will have lost a large investor and a project important for the forestry industry," he said.
Industry officials echoed this sentiment. Latvian Timber Industry Federation executive director Harijs Jordans told the Baltic News Service that "for the forestry industry it would definitely had been better if that plant had been built, but in fact such a scenario had to be anticipated."
The pulp mill project started in 2000 with the formation of Baltic Pulp. Metsaliitto promised to build a plant with annual output of 600,000 tons and create some 350 jobs. In 2001 the company identified Ozolsala as the prospective site for the plant, but the choice elicited vehement protests from environmentalists concerned about likely effects of the pulp production on Latvia's largest river.
In the environmental effects assessment prepared last fall, the state's assessment office prohibited Baltic Pulp from using the chlorine dioxide method for pulp bleaching, fearing detrimental environmental effects on the Daugava.
Baltic Pulp closed its office in Riga on Feb. 1. Metsaliitto said it would begin working on plans to build a pulp mill in Uruguay.
