Key sectors

Estonian Chemical Industry is characterized by strong concentration, proceeding from the traditional fields and development potential of the relevant region. Thus the largest part of the chemical industry has concentrated to East-Virumaa (AS Viru Keemia Grupp, AS Nitrofert, OÜ Kiviõli Keemiatööstus, AS Genovique Specialties, AS Silmet, etc).

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In spite of the big changes in the structure of chemical industry in 1990s, expressed mostly in decrease of production volume and in vanishing some of the sectors of chemical industry (production of phosphor fertilizers, benzene and toluene has finished, production of medicine decreased), the chemical industry has retained its stability.

The sales of chemical industry accounted for 5,9% of the total sales of manufacturing in 2008. The sales of chemical industry was 498 million EUR and it has grown ca 6% compared to 2007.

Main sub-sectors and producers

Chemical industry, based in East Virumaa, has to a great degree concentrated to the thermal processing of oil shale. As a result of it shale oil, coke, shale oil phenols and other chemicals are produced. Some of the enterprises are based on imported raw materials, such as synthetic phenol, methanol, toluene, land gas etc.

Viru Keemia Grupp (VKG) is the fourth enterprise in East-Virumaa by its turnover. At the same time it is the biggest oil shale producer in Estonia and the leading oil shale producer in the world. In 2006 VKG sold approximately 200 000 tons of shale oil, giving job to more than 1400 inhabitants of East Virumaa.

The fifth enterprise by turnover in East Virumaa is AS Nitrofert. It re-established its manufacturing in 2004. They produce ammoniac and urea. The main production of AS Genovique Specialties (former Velsicol Eesti), which belongs to the USA Corporation Velsicol Chemical, is benzoic acid. Sodium Benzoate, produced by the same company, is used as a conservator and in producing several drinks and coca cola.

Estonia has long-term experiences in producing cosmetics and applied chemistry. Everybody is familiar with cosmetics and applied chemistry, produced by Flora Kadrina and Orto. The consumer has accepted well the series of Mayer applied chemistry, produced by Mayeri Industries. AS Estko produces washing chemicals, used in agriculture and food industry.

Well known is a branch of construction chemistry. Biggest producers of lacks and paints are Vivacolor AS, Eskaro AS and ES Sadolin AS. AS Krimelte and AS Henkel Makroflex produce foamed polyurethane. Production of coagulant was started in 1994 in AS Kemivesi.

Export

Chemical industry has been very export oriented. 90% of production of chemicals and chemical products were exported in 2008. The growth in the proportion of exports indicates the growth in foreign demand. Production of chemicals and chemical products has had one of the highest shares of export in sales in manufacturing, the figures have over the years been above industry average.

Main export countries are Latvia, Russia, Lithuania, UK and the Netherlands.

The main export articles of Estonian chemical industry are:

• Oil shale
• Dyes
• Organic chemicals
• Fertilizers

Human resources

In 2008 there were 99 enterprises of chemical industry in Estonia, 85 of which have up to 50 employees, giving  8% of the realization of the products of chemical industry. 14 enterprises have 50 and more employees and they give 82% of the realization of the chemical industry.

Average number of people, occupied in manufacturing and chemical industry (thous)

Specialists in chemical technology are trained at Tallinn Technical University and Tartu University. The training of employees is also organized by the Federation of Chemical Industry and by the companies themselves. EU specialists are also used as trainers.
Despite of increasing labour costs in Estonia, the salaries of workers are still modest if compared to the corresponding figures in Western Europe.

Foreign capital involvement

Chemical industry in Estonia is a sector with very high foreign direct investment (FDI) penetration rate. The total stock of FDI invested into chemical industry was in the end of 2007 86 million EUR, which is ca 5.2% of total FDI into manufacturing sector.

Favourable investment climate

Main reasons to invest in chemical industry in Estonia are:

• Well-trained chemical engineers
• Relatively low costs of production (including relatively cheap skilled labour)
• Opportunity to cover Baltic, Russian and/or European markets
• No income tax on reinvested profits

The further development of the Estonian chemical industry, particularly the oil-shale industry, depends on the world market situation and foreign investments. Proceeding from the deepness of scientific investigations and the resources of oil shale with relatively good quality, this branch of industry should provide a noticeable interest to the foreign investors.

More information about Estonian chemical industry Institutions

The Federation of Estonian Chemical Industry: www.keemia.ee/?go=index=eng
Ministry of Economic Affairs and Communications: http://www.mkm.ee/?lang=en
Statistics Estonia: www.stat.ee
Institute of Chemistry at Tallinn Technical University: www.chem.ttu.ee/chem_en

Viru Keemia Grupp AS: www.vkg.ee
Nitrofert AS: http://www.nitrofert.ee/en/about.html
Flora Kadrina AS: www.flo.ee
ES Sadolin AS: www.varvimaailm.ee
Krimelte AS: http://www.krimelte.ee/
Henkel Makroflex AS: www.makroflex.ee
Estko AS: www.estko.ee/index.php?lang=eng
Kemivesi AS: http://www.kemira.com/regions/estonia/ee/pages/default.aspx
Kiviõli Keemiatööstus OÜ: www.keemiatoostus.ee
Orto AS: www.orto.ee/index.php?lang=eng
Silmet AS: www.silmet.ee
Vivacolor: www.vivacolor.ee
Eskaro AS: www.eskaro.com