Sillamae gets an investment boost

  • 1998-09-17
  • By Urmas Maranik
SILLAMAE - At least one group of British investors see investment opportunities outside Tallinn. The Green Wood Furniture Company is ready to set up a furniture plant in Sillamae, an industrial town with a population of about 20,000 residents in northeastern Estonia.

Late last month, the British furniture company sent the 75 million kroon ($5.35 million) investment plan to the Sillamae City Council for reviewing.

Sillamae Mayor Jaak Tamm said the protocol for the construction of the furniture plant has already been signed.

"The company's representatives have already found a suitable production facility to launch the first phase of the plant, which would employ 50 to 60 people here," Tamm said.

Tamm said the unemployment rate in Sillamae is quite high. According to official figures, it reaches 10 to 11 percent, but Tamm said he thinks the actual unemployment rate reaches as high as 18 percent.

"Sillamae is a truly industrial town, where employment relies greatly on how large companies are doing. The ones employing the most people are the oil shale company Eesti Põlevkivi and the metal producer Silmet," said Tamm. "After Silmet was on the verge of bankruptcy at the start of the year, this new plant relieves the unemployment situation, diluting the risk concentration."

According to Green Wood Furniture Company's investment plan, construction of a new facility is required for the new plant. It is planned that the first production lines will start operating by the end of 1999.

"At full capacity the plant could provide work for almost 250 people at Sillamae," Tamm said. "This new plant is a boost for Sillamae, where the average gross wage is about 2,500 kroons per month, which is 1,700 kroons below Estonia's average."

Tamm said he thinks the British firm's investment plan looks quite adequate. Mainly, the company will produce bureau furniture and furniture for schools and hospitals.

"The production is to be exported mostly to Russia, where Moscow alone has 1,200 schools and more are being established each year, and to Western markets. Some of it could be marketed in Estonia as well," Tamm said.