Finnish pulp mill a model for Latvia

HELSINKI/JYUVASKULA - In addition to being the home of Santa Claus, Finland is also the home of a huge forest industry. With very few natural resources, Finland has been able to specialize in forest products Ð pulp, paper and building materials. There are about 440,000 private forest holdings in Finland, two-thirds of them with more than five hectares of forest.

One of Finland's major forest players, the Metsaliitto Group, has together with Swedish counterpart, Sodra Cell, and the Latvian government formed the joint-stock company Baltic Pulp. Its main tasks are to investigate the possibility of building a pulp mill that will produce 600,000 tons of pulp annually.

Journalists from Latvia got an idea of how that plant might operate when they visited a pulp plant in Finland last week.

A pulp mill is an impressive sight. A low roar is heard from the distance and the smoke rushes skyward from the Aanekoski pulp mill's chimneys, dead in the center of Finland. The entire complex is vast and complicated, with wires, cables and pipes running in patterns only a electrical expert could possibly understand. The industrial area, does not only house a pulp mill but also a paper mill, a board machine and an electrical water power plant.

During the journalists' visit the pulp mill suffered a malfunction in its recycle boiler and had to be shut down. Restarting this vast and complicated factory is not an easy undertaking. It could take up to a whole week and at least a few days.

A pulp mill has rigid safety measures. There are many different chemicals used for producing pulp in storage such as sulfur and sodium, just to mention a few.

The Aanekoski pulp mill is located near the Paijanne Lake. The mill, which uses water for energy, has an attached water treatment plant, ensuring the water directed back to the lake will be as pure from chemicals as possible. The final destination for much of the water in Paijanne Lake is Helsinki, where it's carried via a 120-kilometer tunnel, the longest in the world of its kind.

Mill Director Esko Turunen reflected on the fact that water from the mill, which is filtered and poured back into the lake, is drunk by residents of Finland's capital, inferring that the mill's waste water is drinkable.

The same kind of system is planned for the Latvian pulp mill, with water from the river Daugava being used as a source of energy.

The Aanekoski mill employs 272 people. But it's an aging workforce, according to company officials.

"In five years we will need a generation change here. A lot of people will retire," Turunen said.

Last year, the mill produced an all time high output, since the start in 1985, of 459,475 tons of pulp. It takes about two tons of wood to make one ton of pulp, company officials said.

The mill uses machines known as forest harvesters to pluck trees to feed the mill. On six huge wheels, all dressed in heavy snow chains, the forest harvester is impressive. Fastened on the top of the harvester is a long arm fixed with a gigantic claw.

Trees are cut down, stripped of their branches, cut into three equal pieces and hoisted onto a truck bound for the mill.

At the mill the logs are boiled to separate the wood fibers, which become the main ingredient for pulp.

Ismo Reilama, director of environmental affairs and process development for the Aanekoski pulp mill, said the European Union changed its environmental policy in 1996 so that companies had to apply the best available technique (BAT).

"As of last year, the EU has said what BAT is for different types of industries," Reilama said. "The equipment we invest in has to last for 30 years, and this equipment is the same one we intend to use in the planned pulp mill in Latvia."

Jukka Laitinen, managing director of Baltic Pulp, confirmed that the planned mill will have a capacity of 600,000 tons of pulp per year. To achieve that production level, three million cubic meters of forest will be needed.

"This won't cause a threat to the Latvian forest since it grows by 16 million cubic meters annually," Laitinen said.

The ownership of the mill will be divided between the three main owners. The Latvian government would hold 33 percent, Metsaliitto Group 34 percent and Sodra Group 33 percent.

It has not yet been decided how the Latvian government will pay for its third of the mill. There has been speculation about how much forest the government would have to promise for the project, but no final word has been given.

Erik Lagerwall, managing director of Metsaliitto International, said the project would cost about 1.2 billion euros depending on whether the Latvian government would provide logging rights on state forest land as equity.

Latvian Agriculture Minister, Atis Slakteris, told Parliament recently that the pulp mill project will require loans of up to 550 million euros.

This money, Slakteris believes, could come from a consortium of banks, including the World Bank's International Financial Corporation and the European Bank for Reconstruction and Development. Finance Minister Gundars Berzins has hinted that Latvia won't provide forest as equity as initially expected but invest money instead Ð up to 100 million euros.

Lagerwall sees the main problem as being how to ensure an adequate timber supply for the mill.

"But we're not planning to destroy the Latvian forest," Lagerwall said.