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Estonian forestry industry grows with EBRD financing
To expand the production capacity of an Estonian saw-mill company, the European Bank for Reconstruction and Development (EBRD) is providing a DM 13.8 million (ECU 7 million) loan to Imavere Saeveski AS, the most modern saw-mill in the country. The loan will allow the company to process the full range of log sizes of coniferous species available in Estonia.
"The EBRD will finance this expansion together with two local banks, Hansapank and Estonian Investment Bank, which will benefit from the due diligence experience of the Bank. The project will also demonstrate to local intermediaries the advantages of co-financing with the EBRD", said George Krivicky, Director of the EBRD's Baltics/Belarus team. He continued: "The Bank attaches high priority to supporting Estonian private sector development, both through financial intermediaries and directly financed transactions."
The financing will be used to purchase and install a new saw-line, expand an existing log yard, and purchase log handling equipment. An additional ten drying kilns will also be built. After the investment programme, the saw-mill capacity will increase to 200,000m³ of sawn-wood per annum based on two-shift operations. This will consist of 80,000m³ on the existing line and 120,000m³ on the new line.
The investment will allow Imavere Saeveski to make maximum use of raw materials and to achieve high productivity and high flexibility as far as production and shifting market demands are concerned. Furthermore, the company intends to introduce international management standards for control and environment.
The forestry industry has a long tradition in Estonia and, after the collapse of the Soviet Union in 1991, the industry concentrated on exporting mainly unsawn timber to Scandinavian and western European markets. This was because at the time there were no saw-mills in Estonia with modern equipment capable of producing sawn products of the quality required for export markets.
Imavere Saeveski AS was founded on 1 August 1994 by the timber supply and processing company Sylvester AS and started production in the second half of 1995. Its shareholders are Estonian enterprises (72 per cent), Finnish companies (24 per cent) and a Danish enterprise (4 per cent).
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