Ruma Estonia OU, a branch company of U.S.-based Ruma-USA Ltd., will arrange the building process and hire local contractors in the first quarter of 2001, according to the company. The holding company, Ruma-USA, is dealing with metal export from Russia and announced its plan to build a steel terminal at the Muuga port in Tallinn this March.
The 35,000-square-meter warehousing and operation facility will include a galvanizing line with an annual capacity of 400,000 tons. The facility is expected to be operational in 2002 and will provide 150 jobs.
Danieli & C, an Italy-based engineering company, has already begun preliminary design work for the project.
Hypo Vereinsbank, the seventh largest bank in the world, arranged financing for the project. Estonian Hansapank will provide $5.5 million for the facility.
The new steel facility is adjacent to three loading berths as well as the deepest sea draft available in the Baltic Sea and will be the only port-side metals warehouse in the Baltics to offer indoor climate-controlled storage, according to the company.
According to Barry Bernsten from ISI, it will be the biggest U.S. investment to date in Estonia.
"The facility will provide the world market with high-quality galvanized steel," said Bernsten.
He added that the facility has been designed to handle transit by rail and by vessel. This makes it flexible for bringing in and out materials in different directions.
"The facility will offer significant services not offered by other Baltic ports in terms of services for metal transit. This will mean increased transit of metal products through Estonia. This is important for Estonian transit, because it further diversifies cargo flow which is currently dominated by oil products," said Bernsten.
ISI believes that foreign investors need to focus on building new state-of-the-art facilities in the region, rather than simply re-vamping outdated technology. This will take a much higher level of commitment from investors, but will ultimately pay off both for investors as well as for local economies, said Bernsten.