industrialpark Archives - Suoth-East Estonia

Võrusoo industrial area awaits new businesses

Posted on 7. October 2022 by Kaido Palu

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 17^th 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

Posted on 7. October 20227. October 2022 by Kaido Palu

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.

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

Posted on 7. October 2022 by Kaido Palu

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.

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.

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 30^th operating year

AS Moodul, which produces metal constructions celebrated its 30^th 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€