Auction of industrial plots in Võrusoo

The Government of Võru City organizes a two-stage auction for the disposal of the following properties located in the Võrusoo Industrial Park:

1. Põllu tn 20 (area 7809 m², intended purpose 95% production land, 5% business land);
2. Põllu tn 21 (area 6671 m², purpose 95% production land, 5% business land);
3. Põllu tn 22 (area 9677 m², purpose 95% production land, 5% business land).

The deadline for the first stage of the auction is February 1, 2023 at 10:00 a.m. The auction participant must submit a written offer to the information hall of the Võru City Government at Jüri tn 11, Võru city.

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Võrusoo industrial area awaits new businesses

The benefits of southeastern Estonia as an industrial area:

  • Located near the border – Southeastern Estonia is good location for both domestic and foreign markets. International transport corridors pass through the area.
  • A strong wood & furniture industry, successful food, and metal processing companies – Southeastern Estonia is the home for dozens of mid-sized wood and furniture producers, of which most export their goods. Processing companies employ more than 6000 people in the area.
  • Preparing qualified workforce – three big vocational education schools train over 2000 students in the area (Võrumaa Vocational Education Center, Valgamaa Vocational Education Center, Räpina School of Horticulture). Next to the vocational education center in Võru lies the Centre of Competence for Wood Processing and Furniture Manufacturing (TSENTER), which connects the public sector, private industry, and schools. All counties have local development centres too, which help and counsel existing and starting local businesses.
  • Beautiful nature, a good environment, and a strong regional identity – Southeastern Estonia attracts new residents with scenic views and safe towns that feature all necessary institutions and communal services.

    Photo: Robi Zuts

Currently, a 5.5-hectare sized new industrial area is being developed in Võru town, with the future potential to expand up to 40 hectares. The initiative to build came from the local government, not entrepreneurs. “If the local government is not interested in their residents having stable jobs, who would be?” states the mayor Anti Allas rhetorically.

According to Allas, the business world is constantly changing – manufacturing companies look for new ways to expand and become more effective. Soviet era warehouses and infrastructure is not enough, they need modern facilities and equipment to grow and evolve.

Since Võru is located in the southeastern corner of Estonia, processes and arrangements are not as fast as in the capital. On the other hand, Võru has a very strong attraction for families and individuals. We have more jobs than people – so we employ people in the whole southeastern region. As a regional center, we have the responsibility to offer businesses good conditions and help them. We have seen that entrepreneurs are very interested in moving to one location, where they have everything in one place – necessary infrastructure, joint operation possibilities with other businesses and modern facilities”, states Allas.

The town of Võru has years of experience in creating new industrial areas. Together with local private businesses, Võrukivi industrial area was built in 2010-2012. The town built the roads, communication lines and installed sewerage and district heating. The local government also purchased a piece of land from KEK, in order to set up proper access roads and infrastructure. “The local businesses would have struggled without modern infrastructure, because building it themselves is too expensive”, explains Allas. Võrukivi industrial area did not fill up instantly but needed some time. However, Allas thinks it is only natural that businesses take some time to relocate and move their operations.

As the regional center, we are interested that more residents move in the area and have good opportunities to work and settle down.

The first stage of Võrusoo area development

Total cost of creating the Võrusoo industrial area is 1 428 292€, of which 214 244€ is funded by the town of Võru. A sum of 192 900€ is added to the total, which is the cost of purchasing necessary land from the state. The project is funded by the European Regional Development Fund in order to strengthen regional competitiveness.

By 2026, the town hopes to have completed the first stage of development – 7 finished manufacturing plots where at least 8 companies will hopefully operate, employing 75 people. In the future, 20-30 more businesses can move there, offering work to 200-500 people.

54 bigger manufacturing companies are located near Võrusoo industrial area, where qualified workforce is valued highly. To name a few – Cristella VT OÜ (frozen bakery and pastry products) with 300 employees, Wermo AS (furniture production) with 60 employees, Valio Eesti AS owned Võru Juustutööstus (cheese production) and Võru Hallid AS (metal structures) operate in the area.

Construction has already begun in the industrial area, the first bids for the plots are expected to receive by 17th of October. “We’ll have to wait and see how interested the businesses are. When we were designing and preparing the project a couple of years back, companies were very interested in moving to the new area. It is possible, that the changed economic conditions and times of crisis have altered the businesses’ future plans. On the other hand, times of recession and growth are normal to the economy and while the current situation may slow down the demand for the industrial area, overall demand should still be relatively strong”, says Allas.

Plot purchasing conditions are very favorable for the businesses. Starting square meter price is 4€, which is 2-3 times lower than market price. However, the new business then has an obligation to build new warehouses and necessary buildings, start production and create new jobs for the town.

Help from the municipality is much appreciated

According to the mayor, selling cheap plots eliminates market inefficiencies, which have been created by uneven regional development. “I’m convinced that Estonian liberal economic system has let us down a bit. The role of the local government in supporting manufacturing and housing development can not be understated, which can be seen by the example of Võru’s Sister Cities in France and Finland. In more rural areas, the local government has to put more effort into building the infrastructure and helping businesses expand, which is why we have also contributed to the development of private houses. For example, eight young families who wanted to build a house were able to purchase plots from us with a good price. We are also thinking about further developing rental houses and suburbs. As the regional center, we are interested that more residents move in the area and have good opportunities to work and settle down. We don’t want to hinder or block the new developments of private businesses, but rather cooperate with them. According to this principle, we have created favorable land purchasing terms.”

We welcome all businesses to Võru industrial area, who match our set conditions and requirements and create new jobs to the area. Currently we have 7 available plots to offer, ranging from 6000 to 10 000 square meters in size.


Võrukivi technology park is expanding

Photo: private collection

During their 10 years of history, Võrukivi tech park has gotten to a point where they need to expand their operations, because all available plots have already been taken. Board member of Selista Ehitus OÜ Indrek Klampe says that technically there are two available plots in the area, but they are shaped in a way that makes building warehouses and processing plants very difficult. “Currently we are in the process of negotiating with the town to acquire more land. Then we’d have five available plots instead of two. The area has all necessary access roads and connection points so why not use them, and create new plots”, says Klampe.

Võrukivi tech park has been in development for 15 years already. There used to be a brickworks, but those buildings have been long demolished and now many companies and factories operate here, such has KPG Kaubanduse OÜ (Magaziin retail chain), Kagu Elekter and Estelaxe (building chairs and seats for trains and concert halls). The tech park is located next to the Tallinn-Tartu-Võru-Luhamaa highway, which makes it a good location for both companies selling to domestic and foreign markets. Currently there are 14 production and business plots in the tech park.

Võrukivi Tööstusala Kagu-Elekter
Photo: private collection

A modern and comfortable living environment

Võru may seem like a remote town on the borderland, but the local living environment satisfies all modern requirements and demands, states Klampe. We have all necessary services and facilities – from educational institutions to good infrastructure. “I’d say that Võru is a good place to live and work in. The local government is business-friendly and cooperative, which is very important for entrepreneurs”, says Klampe. Selista Ehitus has years of experience in quality design-build projects – they have built most of the nearby manufacturing buildings here.

Businesses are always interested what is the workforce situation in the area. Thanks to Võru County Vocational Training Centre, there are many potential qualified workers in the field of woodworks, metal, mechatronics and culinary. “Labor force is an actual topic in the whole area – there is a lack of employees, especially if you’re looking for special skills and knowledge”, says Klampe. There used to be many people commuting to Finland for work, but this trend is changing – nowadays, local companies pay wages good enough that there’s not much point in going to Finland anymore.

Photo: private collection

Mayor of Võru: The technology park has been a very important investment for the town

According to the mayor Anti Allas, Võrukivi tech park has been a very important investment for the whole town, because it has attracted many new investors and companies.

“It can be quite expensive for the entrepreneurs to build and establish everything themselves, so having the city build the plots with necessary connection points has been a great help. It has been a joint effort between businesses, the local government and different funding programs to create the tech parks”, says Allas.

Allas states that the town of Võru is currently in the process of creating new industrial areas, which will be sold with a starting price of a third of the current market price.

Väike-Laatsi industrial area in Valga has huge potential

Photo: private collection

Valga municipality has been developing the Väike-Laatsi industrial area for the last 15 years. The area is 65 hectares in size, which according to the local entrepreneurship and development specialist Mare Raid is big enough to even accommodate big manufacturing companies. Currently private owners hold the industrial plots, but there also is one property which Valga municipality would like to own themselves.

EHA Metal & Woodworks, Moodul OÜ, AS Tarvas Ehitus and Baltic Forest Master are a few examples of the companies operating in Väike-Laatsi industrial area. The process of installing streetlights and renovating access roads was completed in 2020. Now, the area also has amenities such as running water, sewerage, and an internet connection.

Photo: private collection, Eha Rauatööd

Water and sewerage connections have been renewed and the companies can use those access points, explains Raid. Since there is an electrical substation next to the industrial area, sufficient electrical supply is guaranteed to the new companies and residents. The heating is local, there is no central heating connection in the area. Internet is provided via broadband network and the connection point is located at the border of the property. Valga also has a functioning railway network, which can be a huge advantage to new residents. At the moment, there is no railway spur connecting to the main line, but it can be built, if necessary. The area’s closeness to Latvia is also one of the selling points of the area, because the connection to Riga is very good and raw materials can easily be imported from Valga. The trip from Valga to Riga is shorter than from Valga to Tallinn.

We are open-minded to new residents

Valga is open-minded and welcoming to new potential new companies. Usually, the local community and neighbors have the say in the decision, but we don’t have any limits to the field of activities for the companies – we are open to different ideas. “Our biggest wish is that the new companies would create new jobs to the area, which would also encourage new people to move here”, says Raid.

Photo: private collection, AS Moodul

Dozens of mid-sized wood and furniture companies operate in the south-east of Estonia, employing over 6000 local people. According to Raid, finding new workforce can be a challenge – a common concern in southern Estonia. Companies often train their own employees, and many people have relatively long commutes. There are also Latvians who commute to work across the border. “Valga has all the necessary services for life, I think it is a good place for families to settle down. During the last years the city has developed a lot – many roads have been fixed and overall progress can definitely be seen. We don’t call ourselves a borderland, but rather a gateway to Estonia. We think that since the government supports the industrial development in East-Virumaa, it should do the same in the south-east of Estonia”, says Raid.

A steel company in Valga celebrates its 30th operating year

AS Moodul, which produces metal constructions celebrated its 30th birthday in the industrial area this year. Currently they employ about 50 people. Most of the output is sold for export, depending on the projects.

According to AS Moodul board member Roland Karpats, Väike-Laatsi industrial area is a good location for manufacturing companies. They have enough space for their operations and buildings and the commute for the employees is relatively short. “There is room both for existing companies to expand and newcomers to build. Since we have a lot of oversized truck loads, we really value the good access roads to the area”, says Karpats.

Karpats also praises the local municipality – their cooperation has been efficient and smooth. “For example, we are constantly building new warehouses and the municipality has always been very collaborative”, says Karpats.

Valga municipality by the numbers

  • Population 15 200
  • 70% of residents live in the town of Valga
  • Working age residents ~10 000
  • Average gross monthly income in Valga County in 2021 – 1208€

Antsla municipality awaits new businesses to the new Maratinurga industrial area

Antsla is located near Võru, Valga and Otepää – the connection to all three cities is very good. According to the Assistant Mayor of Antsla, the municipality already has the experience of creating a successful industrial area, where a metal manufacturer Baltic Steelarc and timber producer MPPuit are currently operating. As a result, about 30 new jobs have been created. Many other companies operate in the neighborhood, including Antsla Inno, which is the biggest manufacturing company in the region with 200 employees.

photo: private collection

The local municipality has acquired the new industrial area from the state and new communication lines will be built with funds from the EU. The line network connections include electricity (capacity to be announced), sewerage, and fast internet. Currently, a detailed project report is being made for the new area, which is supposed to be validated in the first half of next year. 11 hectares of land has not been parceled out yet. “Our purpose is to be as accommodating and approachable as possible to the new entrepreneurs who want to come here. If a company wants to take up the whole lot, then we will not parcel it. We can also consider the new residents’ requests in the detailed project report”, says Müürsepp.

The municipality would prefer entrepreneurs who create jobs, however there are no limits to the field of activity of the companies, aside from solar parks. The questions arises – does Antsla have enough employees for future companies? According to Müürsepp, there are already many industrial companies operating in Antsla and they have enough people to work for the new companies. “The local people are very mobile, the daily commute can be up to 60km. If the people are well-paid, finding employees should not be a problem. However, some people are afraid of the misconception that rural people only get paid the minimum salary”, says Müürsepp.

photo: private collection

Companies are given building rights

The future industrial area currently belongs to the local municipality but building rights can be sold with a reasonable price if there is an interested entrepreneur. There is also the condition that if the company starts the construction within the prearranged time, they have the option to purchase the given land. “This makes it easier for the companies to make deals with the banks and also rules out a situation, where somebody just buys the land and does not use it”, explained Müürsepp. “The local municipality is ready to start negotiations with potential prospects and consider their special requests.”

photo: private collection

Cooperation with the local municipality is going well

The metal manufacturer Baltic Steelarc built an industrial building on the Kobela area a few years ago. The company focuses on metal works and offers different type of steel and aluminum processing services, including CAD design.

Vjatšeslav Andritski, the board member of Steelarc says that the municipality has been very cooperative – they have helped the company overcome various challenges and allowed Steelarc to purchase the land they used to rent. “In return, we provide jobs for 44 people, of which most are locals from Antsla.”

Steelarc chose Kobela industrial area because it has suitable infrastructure, inexpensive land, and a good supportive team.

Antsla municipality

  • Located in Võrumaa, between Valga and Võru
  • 77 km from Tartu, 34 km from Võru, Valga and Otepää to the new industrial area
  • 4500 residents in the municipality
  • 2700 working age residents

Drones – the new Estonian Nokia

The drone sector is rapidly developing in the European Union, as confirmed by the European Parliament. Studies indicate that 150,000 new jobs will be created in this sector by 2050. Ten years from now, the drone industry may make up 10% of the entire aviation market in the European Union. This accounts for ca 15 billion euros per year.

The local players say that the Estonian drone sector has every possibility to grow exponentially, thus greatly increasing local export. Additionally, the drone sector will receive a piece of the hundreds of billions of euros in play in this sector every year. “The drone market will grow to 50 billion euros by 2026 and I see a fantastic opportunity for export; Estonia as a whole has the possibility to benefit greatly,” assured Marek Alliksoo, CEO at SKYCORP OÜ, a company that develops hydrogen drones in Estonia.

Alliksoo believes that Estonia will become one of the most prominent development and operating destinations in the drone industry in Europe. “There is a great deal of potential in drones that perform logistics or gather data, air taxis that transport people or hydrogen and electric aviation,” he shared his thoughts. Invest Estonia’s Business Development Manager Raido Lember agrees. “Estonia has a good chance to become a unique drone development centre if they collaborate and innovate with universities in Tartu and Tallinn.”


A small nation has powerful advantages

Alliksoo believes that a unique way of thinking compared with other European nations will make Estonia a leader in the industry. “Our first option is not looking for justification for why we can’t do something; our country’s regulatory aspect is simple and supportive regarding unmanned tools,” he clarified.

Additionally, a clean and underutilised airspace provides support to the Estonian drone industry. “Drone mapping is rather straightforward over Estonia’s largest cities. It provides many opportunities for further development, collection of existing use-cases and raising awareness,” said Alliksoo. “Therefore, we don’t have the obstacles other countries have in these fields.”

Furthermore, Estonia will benefit from being a small country. “This provides us with an important competitive advantage, which is speed – we are able to do things nationally, while at the same time, our competitors can only operate regionally,” said Alliksoo.

Helen Kalberg, Marketing Manager at Tartu City Government, represents the public sector and she added that Estonia’s high technological level is also a competitive advantage. “The interest in the drone industry is at a high level in higher education institutions and they wish to train more specialists. Versatility exemplifies Estonia because we are a small country, information is passed on quickly and there isn’t too much bureaucracy,” she assured. Likewise, the know-how in this sector is at a high level, and if resources are used correctly, the drone industry could develop into an ‘Estonian Nokia’ type of venture,” Kalberg was certain.


Serving cocktails, governing crises and controlling the border

According to Alliksoo, success stories in the ground-based unmanned transport field or logistics field show that Estonia has a favourable regulatory framework. “Auve TechCleveron and Starship Technologies are but a few examples,” the expert noted. “Estonia has a number of industry leading companies in the drone sector,” Alliksoo added.

The companies Alliksoo named demonstrate their own success every day. For example, a few years ago, Cleveron showed near Lake Viljandi how they are able to use drones to sell cold cocktails to clients. Orders were completed in less than five minutes, and by doing so, they showed the world another area in which technology is able to replace human labour.

As the coronavirus spread, the local drone industry proved its worth once again. Threod Systems drones were used to support the Estonian Police, as well as the healthcare sector, by informing the public about current restrictions via drone. The drones also transported coronavirus tests to the mainland from the island of Saaremaa.

Krattworks has developed technology that can be utilised in firefighting efforts, meanwhile EU drones allow Estonia to shine at its Eastern border – Estonia’s eastern border is the most wisely guarded border in the European Union. “Using drones allows us to nip incidents in the bud and react to them as soon as possible,” said Helen Neider-Veerme, Head of the Bureau at Border Police, three years ago. She also stated that this technology is of great help in monitoring and detecting what occurs at the border.

Kalberg lists a few other success stories: Milrem Robotics, a well-known company in the defence industry, as well as SKYCORP, led by Alliksoo. “The latter manufactures hydrogen-powered drones. The company recently signed a partnership agreement with French company Drone Volt. SKYCORP’S new generation technology will affect ecological footprint, vehicle weight as well as autonomy,” she explained. She also lists Hepta Airborne as a success story – this company develops aerial surveillance of power lines in cooperation with Elektrilevi.


Limitless potential

Alliksoo states that the greatest success story in the Estonian drone industry is participating in the SESAR JU Gulf of Finland U-Space project as well as in the subsequent Gulf of Finland 2.0 project. “Both projects are quite unique; in the latter project they are planning to implement an air taxi service and apply it across the Gulf of Finland between the two countries – this would be an unbelievable achievement on the world stage,” the expert believes.

He adds that three Estonian drone companies are supported by the European Space Agency’s business incubation centre. “Even today, we don’t really comprehend the scope of this market,” Alliksoo noted. He provided an example – Nordic countries are developing 6G mobile networks in order to more successfully take advantage of unmanned aerial traffic. “I can’t wait until our network operators discover this niche.”

New and comparable success stories should be further supported by Tartu’s ambition of building an area in which to develop and test drones in collaboration with the Estonian Aviation AcademyTartu Airport, the University of Tartu as well as Tartu Biopark. SKYCORP also collaborates with the City of Tartu. “We have mapped out a number of existing use-cases in collaboration with Tartu City Government, in which drones are able to be used to create added value as well as resolve actions better, faster and automatically, especially those that are currently completed manually,” Alliksoo concluded.

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Estonia’s high-tech ambition is to bring traffic accident fatalities down to zero in ten years

The Vision Zero is achieved by increasing traffic safety and creating safe solutions for roads.

“Our mission is to eliminate all fatalities and injuries related to traffic accidents while also expediting the wider use of self-driving cars in order to ensure higher road safety,” said Mart Suurkask, CEO of Bercman Technologies, which produces smart pedestrian crosswalks and trades on the Tallinn Stock Exchange. Suurkask added that he hopes to see the number of deaths and injuries halved within five years in Estonia.

Allan Lahi, the founder of the startup e-Pavement, believes that the number of traffic accident fatalities could be brought down to zero in ten years. “Even one traffic accident death is too much,” Lahi notes.

CEO of Teede Tehnokeskus Taivo Möll agrees with him. “Our awareness has increased,” he said. “The development of automotive safety and driver assistance systems that correct errors or oversight and intervene at critical moments has contributed a lot to road safety.”

Technology gets the parties to interact with one another

The companies’ CEOs see the development of self-driving cars and technology as a whole as a factor that will tremendously increase traffic safety. “They will significantly diminish the human’s role in the human-vehicle-road system,” Möll explained. “I hope that the vehicles in Estonian traffic in ten years are capable of communicating with each other as well as with the infrastructure – this would help bring fatalities down to a one-digit number,” Suurkask added.

Möll notes that using IoT technology fosters the exchange of information between vehicles, road users and roads. “The sensors that gather the necessary information consume little energy, are very compact, can communicate with one another and forward information from every corner of Estonia,” he explained. “Another point to consider is their price level: if we compare it to the traditional traffic monitoring systems, we can place more sensors for the same price and exactly where they are needed. This will definitely impact traffic safety in the future – data will become more accessible and decisions will be more informed both for road users and road owners.”

He is convinced that roads, vehicles and road users will be communicating with one another even more within the next ten years. “If one car detects that the road is icy via its various sensors, it will also inform the others,” Möll noted. “A good example of this are the smart pedestrian crosswalks that are being developed in Estonia. The sensor systems installed on the pedestrian crosswalks warn approaching vehicles about pedestrians crossing the road and the driver assistance systems can stop the car if the driver doesn’t for some reason.”

But Möll would like to see traffic signs that change based on the data they receive on major roads. “This would make it possible to change speed limits according to road conditions – another step towards road safety,” he states.

Möll added that Teede Tehnokeskus has begun to create a network of mini-weather stations based on IoT technology in Estonian cities to receive information about road conditions and other weather conditions that can affect road safety. “We have installed stations in Tallinn and Rakvere and we will add more of them in the near future,” he noted. “What is for sure is that the technical solutions to achieve Vision Zero are developing at an enormous rate and we will certainly see its positive impacts in the next ten years.”

Road surface as the key to safety

Teede Tehnokeskus is conducting a traffic behaviour monitoring study, based on which they will develop various solutions and services. “We have developed a method to manage traffic control devices that can change the highest allowed speed limit on the Estonian national roads according to the road conditions,” Möll told. “We have installed radar speed signs that warn people about their excessive speed throughout Estonia.”

Teede Tehnokeskus is also working on prognostic models predicting icy conditions on roads during the winter. “We have created the website for gathering all the necessary information for road maintenance during winter, including predictions of road conditions,” Möll explained. “This information service is mainly intended for road maintenance companies and road owners so that they can perform de-icing where it is needed and before the roads become slippery.”

Teede Tehnokeskus uses open data from various sources and data from sensors to develop their prognostic models. “We can calculate the conditions on the road surface using our models up to 48 hours in advance,” Möll says. “At the moment, we predict road conditions in Estonia, Latvia, Lithuania and Finland, but if needed we can also offer predictions globally. Changing the focus to preventative de-icing will make our roads much safer during the winter – many dangerous situations will not occur.”

The data available in Teede Tehnokeskus’ system and/or the predictions also show if a section of the road will still not meet the standards in three hours, for example. “Then our system automatically generates warnings that are sent to whoever is responsible for the road maintenance in this area and who can complete the necessary preventative tasks,” Möll explained. “Thanks to this, road maintenance during the winter will become more accurate and we can prevent unexpected iciness on the main roads as well as in cities.”

They are working with Lux Express to monitor road conditions. “With the help of the Transport Administration, we have equipped nine intercity buses belonging to Lux Express with road sensors which give us regular real-time data about the road conditions,” Möll explained. “We also display pictures of the roads taken by the front cameras of the buses on our website, thus the buses have also become mobile road cameras. Buses that drive on a specific route within a specific interval are good platforms for gathering data.”

International cooperation and smart pedestrian crosswalks

Bercam Technologies is working globally to prevent and recognise conflicts between vehicles and pedestrians. “We develop and bring to the market physical and digital products and services that help to increase the safety and quality of traffic and our environment,” Suurkask noted.

This is achieved in cooperation with the University of Hamburg and the Artificial Intelligence Centre Hamburg (ARIC). Invest Estonia’s representative in Germany Riina Leminsky commented that Bercman Technologies reached out to their Hamburg office with the aim of getting in touch with possible partners. “I introduced them to ARIC and in cooperation with them, they developed a joint project called NATIC GmbH,” Leminsky said. In addition to ARIC, the University of Hamburg is also part of this project.

They are also developing the prediction capabilities of crosswalks in edge cases. “The project was financed by the German government and is an important step in entering the German market, receiving additional investments and continuing our cooperation,” Leminsky explained. “Bercman’s project can also become a stepping stone for other companies to develop business relations with Germany.”

Bercman Tehcnologies’ success in Germany so far is not limited to the University of Hamburg and ARIC. The public limited company also received financing for their project Smart Walk from the Federal Minister of Transport and Digital Infrastructure in Germany. Bercman’s own share in the project was 100,000 euros and they are using it to develop a smart traffic sign that would detect dangerous situations.

E-Pavement is also contributing to the development of pedestrian crosswalks at the Estonian level. “Our existing solutions are mainly directed at pedestrian crosswalks,” Lahi explained. “They enable the pedestrian and the driver to better perceive when the pedestrian is about to cross the road via an unregulated crosswalk.” He noted that this is especially important during the dark and rainy season when pedestrians’ dark clothing makes them hard to notice for the drivers.

Additionally, the regulated crosswalk solutions created by e-Pavement display traffic lights in the waiting areas of crosswalks. “This is especially important for pedestrians who usually use mobile devices when walking,” Lahi noted. “Colour-blind people can better differentiate between the traffic lights.” Lahi also hopes to develop an application that would give the driver colour signals about the safety of their driving speed.

Thus, high technology solutions are the key to increasing road traffic safety and significantly decreasing the number of fatalities. Many Estonian companies are working hard to develop these solutions, whether that’s creating safer pavements, smart pedestrian crosswalks, self-driving cars, smart weather stations based on IoT solutions or creating a synergy between all the abovementioned technologies.

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The green ambition of the Põlva dairy industry broadens the prospects of the southeast Estonian economy

Raul Kalev, Võru County Development Centre Foundation

Ülo Kivine, Head of the Nordic Milk GroupPHOTO: Joel Kirsimaa

Many of us have admired the Great Taevaskoda and the ancient valley of the Ahja River, but few know that the people living in the middle of this breathtaking natural wonder are some of the most resourceful in Estonia. Alongside many new and smaller companies, whether they are wine- making or dairy plants, the Põlva dairy industry stands proud as a monument to diligence and ingenuity. The company, which was famous throughout the Soviet Union in the 1970s and 1980s due to its innovative spirit, is now at least as active in modern innovation: reducing its ecological footprint.

When I first came into contact with people from Põlva County as a young journalist in the 1990s, these meetings had been with extremely enterprising large company founders who had attended school in Põlva, but later moved to the capital. At that time, there was even the phrase ‘Põlva mafia’ in circulation in the economic circles of our country, which was used to describe a whole generation of successful people in the fields of industry, banking and production. They were thought to have achieved such success because of their resourcefulness and support for each other. According to folklore, the entrepreneurship and ingenuity stemmed from the Seto blood.

PHOTO: UPM-Kymmene Otepää OÜ

Modern times, old customs
And perhaps there was a grain of truth in the folklore. The Põlva dairy plant, which was opened at the end of the 1960s, became the flagship for industrial development in the county and indeed the whole country at that time, which, as a result of its own success, led to the development of the entire town and its surrounding areas. The contribution of the young director Tiit Kõuhkna is especially remembered, along with the incredible ruble deposits he managed to bargain from Moscow on the basis of so-called rationalisation proposals. This attracted the envy of many leaders of Estonian cities much larger than Põlva. If I remember correctly, the production of curd in the cheese category also started in Põlva. The reason for this was to increase sales under the restrictive quotas. Cottage cheese is still one of the greatest production successes there.

PHOTO: UPM-Kymmene Otepää OÜ

Although times have changed, the powder towers of the Põlva dairy industry still stand tall not far from the town. Even today, 250,000 kg of milk per day is stored here. Milk trucks start their rounds at 3 o’clock in the morning, the factory working non-stop in several shifts. Every day, more than 150 people come to work here. And the workers do not only come from Põlva, but also from further afield. Some of the workers are even from the Pskov region in Russia.

Around here, a daily 100-kilometre ride to work is no exception. The main thing is to ensure a pleasant and stable job and a steady income.

Loyal employees are the cornerstones of the company
Today Põlva dairy industry has been part of the Tere Group for 13 years. Its official name is now Nordic Milk. While milk powder production is still the main production direction, whole milk products have also been further developed alongside it. The former Mumuu brand no longer exists, and the products are now well-integrated into the Tere brand.

Ülo Kivine, Chairman of the Management Board of Nordic Milk, says that he is especially satisfied with the commitment of the employees of southeast Estonia. The number of people leaving the company at their own request has remained around 1% in recent years. In our capital Tallinn, this would be unheard of! A lot of people have been working for the company for several decades. It is no wonder, because in addition to the above-average salary in the region, they also receive various benefits from the company. Jubilee benefit related to seniority. Childbirth benefit. School satchel benefit. Child camp benefit. Benefit in case of the loss of a close one. Sports and eyewear benefit. In addition to the annual summer holiday, employees also receive a winter holiday. Seniority will also provide additional days off. On birthdays, the contributions of employees are recognised with gifts. Learning is supported (cooperation with Olustvere School of Service and Rural Economics). The aim is to ensure the existence of adequate offspring.

Doesn’t reading this just make you want to send your resume to Põlva?

PHOTO: UPM-Kymmene Otepää OÜ

Production is sold to 25 countries
Ülo Kivine admits that milk storage volumes have increased in recent years and milk yields on farms are also growing. Although only one of the company´s three powder towers currently operates, this is only due to current world market prices. However, as powder prices have risen again by 70% in the last year, it is planned to increase stockpiling and production soon.

Various dairy products from Põlva industry find their way to 25 foreign countries. The powder is sold all over the world. Even to such far-off countries as Japan and Vietnam. Yoghurts and other whole milk products are mainly exported to Finland and the Baltics. In order to increase the volume of value-added production, 100% handmade cottage cheeses have been made in Põlva industry for some time now, with real Setomaa mushrooms inside. These products offer great competition to the production of another local and popular small dairy producer, Nopri.

The local authorities of Põlva County know how to maintain companies as well as help them thrive. The concerns of every investor and employer are important to them. ‘We have enjoyed exceptionally pleasant cooperation with the last Põlva rural municipality authority,’ says Kivine. ‘They have been very understanding and accommodating. When the main bridge was being repaired in the summer and cars were diverted from the town, we were made an exception so that our 20 milk trucks would not have to make big loops around the town each day.’

The dairy industry is reducing its ecological footprint
In recent years, a vigorous green transition has begun in the Põlva region. The Nordic Milk Põlva dairy industry has also joined the movement. ‘Estonia chief export in the world can still only be clean air and clean food, which is becoming less and less everywhere,’ says Kivine, a note of pride softening is voice. ‘We are the founders of the Green Tiger in Estonia, actively measuring and reducing our footprint.’

In order to export to certain markets, the existence of a green certificate will soon become critical for all food producers. It is towards this certificate that people are moving in Põlva. This means that the ecological footprint must be reduced on farms, in packaging and even in the jams put inside the yoghurt. There are no exceptions. For an average person, it is difficult to even imagine all the things that have to be traced for the ecological footprint. ‘We have already made smaller plastic caps for milk packages, abandoned the foil packaging in curds and switched from the “use by” date to the “best before” label to prevent waste,’ Kivine lists the instances of reduced footprints he remembers first.

Needless to say, the Nordic Milk Group continues to invest in the Põlva dairy industry in southeast Estonia. Every year, some of the equipment is replaced with newer and more efficient models. Recently, the first packing robot was procured. Every year, the industry invests around 3–4 million euros.

The whole county has been affected by the green revolution

Lennart Liba, Head of Põlva County Development CentrePHOTO: Private collection

Lennar Liba, head of the Põlva County Development Centre, confirms that in reality the Põlva dairy industry is only one alongside many of the best in the region. Räpina Paper Mill, Arcwood and several other smaller companies are almost as diligent in monitoring and minimising their footprint. Some do it more consciously, some instinctively.

In reality, the green transition, ecological footprint reduction and the circular economy are the leading ideas of the whole county. These areas are so important that in the near future it is planned to hire a full-time specialist who will be focused solely on issues of the green and circular economy. Such a position does not yet exist even in the Ministry of the Economy located in our capital. Põlva County motto ‘Greener life’ also does not provide an opportunity to doubt the earnestness of the intentions.

Hope for increased funding
But there is another plus to all of this. Perhaps even the biggest. Namely, supporting the green economy is one of the top priorities of the European Structural Funds. And with the help of these subsidies, the smart leaders of southeast Estonia want to develop their county to a whole new level. It seems their next trick of the trade is to be one step ahead of others and reap more benefits. Benefits that affect the whole region and its inhabitants.

Establishing telework centres alongside large industries
According to Lennart Liba, head of the Põlva County Development Centre, southeast Estonia does not have the space to welcome new large food and wood companies. This is even somewhat feared, as they would start competing for workers of existing large companies in the face of intense competition. This is something to be avoided. Local businesses are cared for.

Instead, the future is seen in new types of green smaller manufacturing plants and telework centers.

Incentive state support
Why bring your company to southeast Estonia? Why establish your start-up in Põlva, Valga or Võru?

The reasons are, among other things, the state money distributed here. In addition to the state support specifically intended for southeast Estonia to promote innovation and the creation of more diverse job opportunities, with respective application rounds renewed every year, Kaido Palu, head of the Võrumaa Development Centre´s business area, mentions another particularly topical and useful support measure. It is the housing support measure for specialists in southeast Estonia. It is paid once a year by municipalities to professionals that are highly valuable to companies, with the aim that professionals can move to the area, acquire a home and renovate it. The support measure in the amount of 10,000 euros is so popular that the entire amount is usually distributed within a few days.

Kaido Palu, head of Võru County Development Centre entrepreneurship areaPHOTO: Private collection

‘Our region is characterised by excellent cooperation between entrepreneurs and the public sector,’ says Palu. ‘Entrepreneurs are good partners rather than competitors.’ According to Palu, this means that entrepreneurs come to the aid of each other as soon as someone has a problem finding a technique, device or a specialist. ‘Local governments are definitely making an effort, however they can, to speed up conducting business with entrepreneurs,’ he adds.

And, of course, the development centres are of great help. They help food, timber and tourism companies in terms of both joint marketing and knowledge transfer.

Estonia´s best residential and business area in 2030?
‘Here in southeast Estonia, we have everything that can only be dreamed of in many regions of the world,’ Lennart Liba, head of the Põlva County Development Centre, also believes. ‘We are not affected by stormy winds, a scorching sun or floods. Instead, it is peaceful and safe here, with clean nature and the necessary infrastructure for raising children. If anybody does get bored, they can always drive to Tartu, which is just half an hour away.’

And the distance to Riga is the same as it is to Tallinn.

Lennart Liba sighs when he thinks about one of the last big problems waiting to be solved. Once the solution arrives, many companies could relocate here as soon as the following day.

‘We are of the opinion that the 65 million euros planned by the state is not enough to build the Internet in rural areas – for this, it is necessary to take a loan of 200 million euros,’ says Liba. ‘Otherwise, in a few years’ time, we will be far behind in competition with other countries.’

Liba believes that if digitalisation, i.e. bringing the data communication infrastructure to the world level, succeeds, companies from all over the world could be managed on-site in Räpina or Mooste. On the other hand, the Germans and the British could control the complex technological processes of the local farms or timber industries by means of computers.

‘Then there may not be a better place for an ingenious person to live and do business development than in southeast Estonia,’ he notes.


The publication of the article is financed by funds from the Southeast Estonia Programme


Other significant production investments in southeast Estonia in recent years:
• UPM-Kymmene (40 million euros). Plywood production.
• Toftan (32 million euros). Sawn timber production.
• Peetri Puit (9.4 million euros). Manufacture of laminated timber constructions.
• Rauameister (3 million euros). Manufacture of metal structures.
• Atria Eesti (8.9 million euros). Food industry.

Following the success of the Otepää plywood factory – why is southeast Estonia gaining popularity as a business area?

Raul Karev, Võru County Development Centre Foundation

Silver Rõõmussaar, Manager of UPM-Kymmene Otepää OÜPHOTO: UPM-Kymmene Otepää OÜ

When a modern plywood factory was established on the site of the former car repair factory in Otepää at the turn of the last century, the town was mainly known as a ski resort and winter capital of  Estonia. At the time, some even thought that large-scale production is not suitable for a small town. Today, exactly 20 years later, this south Estonian factory producing high-quality birch plywood is the largest in Estonia, being the immediate employer of 240 local people and many more through partnerships.

Following the success of the plywood factory, the area, once considered a periphery, is slowly but surely gaining popularity as a pleasant and profitable business environment. There are specific reasons for this.

If you ask a random Estonian to name the keywords that they associate with ‘southeast Estonia’, then an attractive and growing business environment will most likely not be at the top of the list – instead, people associate it with thick forests, a landscape of rolling hills, and excellent recreational opportunities. It is, however, indeed an attractive and growing business area! In terms of innovative and higher value-added entrepreneurship, it is no longer just a distant dream of the locals, which is also supported at the state, county and rural municipality level at every step, but also an increasingly prominent reality.

One of the pioneers of the new era is located right next to Otepää. The plywood produced in this UPM Group factory is exported to locations all around the world. The plywood known under the UPM WISA brand is used, for example, as a base material for heavy-duty trailers. A well-kept secret is that a significant part of birch plywood made in southeast Estonia is used far away in South Korea, where the container components of liquefied natural gas (LNG) tankers are built. ‘It is possible that we are the most well-known Estonian company for South Korea,’ says Silver Rõõmussaar, the factory manager of UPM Otepää, jokingly.

PHOTO: UPM-Kymmene Otepää OÜ

He is proud that their factory is able to value local wood so highly. Container components for gas tankers are technologically complex and there are only a few companies in the world that have certificates for such production.

Otepää Plywood Factory stands out for its good financial results. According to the manager of the factory, the cornerstones of good results are a stable economic environment, a favourable tax system, high-quality raw materials, and a stable and curious staff.

PHOTO: UPM-Kymmene Otepää OÜ

High amount of birch wood within a radius of 50 km

The plywood industry, which initially began as an Estonian-Finnish joint venture and has now been a full member of the Finnish UPM Group for 18 years, started from the fact that there are sufficient high-quality birch trees in southern Estonia, gaining further support from the existence of suitable buildings on the area of Otepää’s former car repair factory.

Birch is a common tree species and continues to be sufficient in Estonia today as well. How else would the factory have been able to gradually increase its production capacity from 20,000 cubic metres per year to 90,000 cubic metres? According to the factory manager Silver Rõõmussaar, however, this is not the only advantage. ‘The locals here are very loyal, having contributed to the development of the company for many years,’ he notes. ‘We are clearly lucky because the majority of the people in this area value great cooperation and job stability the most.’

And the salary levels are not bad either, somewhat above the Estonian average. And much higher than the average in Valga County. In the first half of 2021, the average salary of the UPM-Kymmenen Otepää factory amounted to 1,615 euros.

The owners of the Otepää plywood factory have invested more than 40 million euros in the area in recent years. This includes, among other things, setting up its own woodchip heat production. Given the company 50 million annual turnover and an average profitability of 10–20%, it is not difficult to recoup this investment within a reasonable time.

PHOTO: UPM-Kymmene Otepää OÜ

The rural municipality offered a helping hand

Silver Rõõmussaar recalls that when the factory was established in Otepää, the support of the local municipality was evident. He hopes that today rural municipality leaders will be equally understanding in terms of new developments. This is a peculiarity as well as an advantage of small places that a large number of municipalities take the investor concerns very personally and try to be as accommodating as possible.

Rõõmussaar admits that in a normal situation, without the active contribution of rural municipality leaders, the planning of production areas could take as long as five or six years, which is too long for most entrepreneurs. ‘Although the rural municipalities do not yet have a direct financial motivation to support production, it is still important for them that more people come to the rural municipality and that new specialists settle here. This is direct income for the municipality. And when an investor has such a perspective to offer, they are generally ready to provide comprehensive support.’

New plots in anticipation of new companies

Having been positively inspired by his own experience, the manager of UPM-Kymmene Otepää factory believes that there is still room in the area for several smaller production and service companies. Some of them would also be welcome to become UPM partners. ‘With so many opportunities, it is important to find your own niche, ideally supporting the already established business environment,’ observes Rõõmussaar enthusiastically. ‘For example, both we and our neighbouring companies use a lot of cars and heavy trucks that need repair and maintenance. If
someone came and set up a repair workshop, I believe that they would have enough customers from this immediate area alone.’

According to Rõõmussaar, however, there is also existing demand for companies that would value the plywood leaving UPM factory in a new and useful way. ‘It is pleasant to work here, with extremely kind and hard-working people, unique leisure and sports opportunities that you can find anywhere else in Estonia,’ he claims confidently.

In order to attract new companies and investments to the region, UPM has undertaken to build a small production park. ‘Otepää municipality is currently processing the plan on a 10-hectare plot of land. I believe that in addition to the six companies in the Hundisoo area, there is room for a couple more companies to operate here alongside us. This will create new jobs and opportunities to speed up the development of the region.’


Asso Uibo, foreign investment consultant at Enterprise EstoniaPHOTO: UPM-Kymmene Otepää OÜ

Southeast Estonian municipalities contribute to cooperation

Asso Uibo, Enterprise Estonia foreign investment consultant in the South Estonia region, confirms that at the moment it is indeed a very good time to invest in southeast Estonia and establish new small productions. And this does not apply only to the establishment of production, but also to the establishment of companies providing administrative and support services. He is referring to the Southeast Estonia Programme, born out of cooperation between the municipalities of southeast Estonia and the state, and the support measures contained therein.

He cites the increasingly active network of rural municipalities in the region as the reason why entrepreneurs should look to southeast Estonia, where it is common practice to try to process plans very quickly and flexibly as well as find other support for companies.

Although new apartment buildings have not been built, with the exception of Võru and Põlva, and there is currently a shortage of modern housing stock, fortunately the municipalities are aware of this and are actively taking it into consideration,’ notes Uibo. ‘I have spoken to several rural municipalities and received confirmation that as soon as a company wants to invest in southeast Estonia or move its industry here, the municipalities are basically ready to offer land almost free of charge for setting up the production units.’ If an investor needs apartments for their employees, it is possible that some municipalities will come to the rescue with favourable offers.

In 2022, several state subsidies are available to entrepreneurs in southeast Estonia. For example, the Southeast Estonia Entrepreneurship Support Measure and the Southeast Estonia Specialists Housing Support Measure, where each local government itself organises a support round for specialists. But there are also other municipality-based subsidies. For example, the Setomaa Rural Municipality Programme. True, none of these programmes and subsidies are so powerful as to be the sole reason that you would move your business to the outskirts of Tartu. But if you already have a viable business plan, subsidies will definitely help to boost it.

Both Asso Uibo and Silver Rõõmussaar are optimistic about the development prospects of southeast Estonia. Regardless of whether the target is foreign investment or local initiatives. Asso Uibo constantly interacts with investors as part of his work and knows that in today’s green and digital age, many start-ups are looking for a unique and motivating growth environment for their employees. There is no better message for young people if your workplace not only reduces your ecological footprint, but also exists in harmony with a clean environment.
Why not establish an IT development company in Põlva, Võru, Räpina or Otepää, where employees clearly have better recreational opportunities than in big cities?

Why not have larger companies, in cooperation with rural municipalities, and build modern apartment buildings with green plots for their employees, thus attracting young specialists and families from Tallinn and Tartu to move here?

Both Uibo and Rõõmussaar emphasise that there is no need to fear a shortage of people in southeast Estonia. After all, life has shown that the more added value companies can offer in the value chain, the more they will be able to make a profit, pay higher wages and attract employees from companies with less value added.

In their opinion, the future of Estonian rural areas is largely related to these types of companies, which will replace depreciated primary production by making more complex, more environmentally friendly and higher-priced innovative products. ‘The people who live in this area are open, loyal, and eager to learn,’ states Silver Rõõmussaar. ‘Both Otepää and southeast Estonia in general are a good area to live and work in.’

The largest production investments in southeast Estonia in recent years:

  • UPM-Kymmene (40 million euros). Plywood production.
  • Toftan (32 million euros). Sawn timber production.
  • Peetri Puit (9.4 million euros). Manufacture of laminated timber constructions.
  • Rauameister (3 million euros). Manufacture of metal structures.
  • Atria Eesti (8.9 million euros). Food industry.
  • Cristella VT (7.7 million euros). Food industry.
  • Räpina Paper Mill (4.1 million euros). Manufacture of paper and paperboard products.

The publication of the article is financed by funds from the Southeast Estonia Programme