Swedes build Estonian plant

  • 1998-10-08
  • Urmas Maranik
TALLINN - The Swedish electronics corporation Berifors chose Estonia out of six Eastern European countries to build a subsidiary plant for the production of electrical car equipment.

"We based our selection on purely economic indicators and opportunities," said Sten Mogard, manager of the Berifors' Estonian project. "We needed a plant down in Eastern Europe to be closer to our customers. Estonia offered us the best possibilities, and not only because it is the closest to Scandinavia. Here we found the lowest production costs." The other five contenders were Latvia, Lithuania, Poland, the Czech Republic and Hungary.

The Swedish company is planning to invest 25 million kroons ($1.87 million) in the first stage of the project.

"We hope to start production in January because we started with renovating the production facilities," said Mogard. Berifors will employ 15-20 people in Estonia and is looking to construct their own facilities in two or three years.

The Swedish company anticipates the Estonian branch will reach the annual turnover of 35-40 million kroons by April 1999. Berifors is a part of an international holding company Stoneridge Inc., which has an annual turnover of about 6.5 billion kroons and employs about 3,500 people. It's biggest clients are car companies Volvo and Mercedes.

"The Estonian branch will start producing power distribution centers for trucks," Mogard said. "These will be supplied to our long-term customers. We will not market our production here in Estonia."

Agu Remmelg, director of the Estonian Investment Agency, said Berifors' investment clearly indicates that despite the Russian crisis, foreign investors' interest in Estonia is still high.

"This particular investment is especially significant for Estonia, because it creates new high-quality employment opportunities in the electronic sector," Remmelg said.

"Another important aspect is that if everything goes well, Berifors will multiply its investments here in Estonia," Remmelg said.