News

ERR - On June 16, Parliament passed a measure that will cut the nation's flat income tax rate from its current 21 percent to 20 percent starting from 2015.

The measure, which passed with a vote of 54 to 39, is expected to cost the state 70 million euros per year in lost revenue, rus.err.ee reported.

The loss will be partly offset by a lowering of the ceiling on personal income tax deductions from 3,196 euros to 1,920 euros per year. That adjustment, which would come into effect next year, is likely to bring in about 5 million euros annually.

Eiki Nestor, an MP representing the opposition Social Democrats, criticized the measure, saying that it was a losing proposition for workers of all income levels.

Read more: http://news.err.ee/politics/75ac29b5-8690-4735-a8f8-58a1bf34c58b

ERR - A public procurement was declared by the state's credit fund KredEx for constructing the planned nationwide network of electric car charging stations.

The 250 charging centers, to be built by 2013, will be located along the main highways and in larger towns, including Tallinn, Tartu, Narva, Pärnu, Viljandi, Kuressaare and Kohtla-Järve. The express chargers will be capable of charging 80 percent of an empty battery in 30 minutes, the government has said.

In March, the government sealed a deal with Mitsubishi to buy 507 electric cars in exchange for trading 10 million carbon dioxide credits. The i-MiEV make cars, which are to arrive in December, will be given to state social workers.

Read more: http://news.err.ee/sci-tech/b119f2e8-abca-493c-9c1a-d52e331fd0d4

ERR - An Estonian-produced financial reports filing system won first place in the category of government services at the World Summit Award, an infotechnological innovations competition.

Two other Estonian creations reached the finals, having faced 460 contenders from 160 countries. Another 71 projects took part in the Estonia's national qualification round alone.

"All in all, we can say that the Estonian star burns brightly on the international stage," said Katri Ristal, a representative for the World Summit Award. "Many innovations such as the online tax agency and the e-elections already seem self-explanatory to us, but the majority of the world is still far behind our level of information and communication technology."

Read more: http://news.err.ee/sci-tech/21d0e542-b661-4456-b8ad-d4779170a363

ERR - The nation's "scientific output" is at the EU-average, concluded the European Commission's Innovation Union Competitiveness Report 2011.

In the last decade, research and development increased from 0.60 percent of GDP in 2000 to 1.42 percent in 2009 - "an impressive annual average growth rate above 10 percent," the report wrote.

Estonia's research and development target for 2020 has been set to 3 percent. "This is ambitious, but realistic in the case business research and development grows significantly," said the report.

The country's research is dominated by government funding and universities. While the private sector has made progress, the number of patents remains relatively low. "The Estonian manufacturing sector is not yet able to compete in hightech goods," the report wrote.

Read more: http://news.err.ee/economy/064d0626-1641-4d50-9ded-f60d08a51911

ERR - On June 9, European Union ministers approved a compromise made by the European Parliament and Council of the EU to establish the headquarters of the EU's IT-agency in Tallinn.

Estonia and France had been tussling over the rights to host the new agency until they reached a sharing agreement last year. The body will be inaugurated in 2012.

Media outlets had earlier reported that Tallinn's bid to host the agency's headquarters was a done deal, however the June 9 decision made at the Justice and Home Affairs Council meeting in Luxembourg makes it official.

"While the location of the agency was already decided months ago, today's compromise removed the last obstacles set by the council for establishing the agency," said Minister of the Interior Ken-Marti Vaher, adding that any additional postponement would jeopardize the EU's goal of ensuring internal security.

Read more: http://news.err.ee/politics/50bcfc35-1061-48b9-b12a-e47594d7fc84

ERR - The already surprisingly high GDP growth figure for the first quarter of the 2011 has now been pushed up even further - the latest review from Statistics Estonia now pegs it at 8.5 percent, a considerable bump from the 8 percent that flash estimates had given it a month ago.

The new estimates put this year's Q1 GDP at 3.71 billion euros at current prices, which is up 2.4 percent compared to the previous quarter after seasonal and working-day adjustments.

Year-on-year GDP growth has been accelerating since the second quarter of last year, the agency said in a June 9 release.

The biggest driver for last quarter's annual growth, accounting for nearly half of the result, was the rise in manufacturing seen over the past year. The sector's value added was up 29 percent, thanks in particular to increased production of radio, TV and communication equipment.

Read more: http://news.err.ee/economy/50e92fa0-ba59-4316-8f25-150f59dbe944

ERR - Tallinn will host a major conference this week devoted to the new national niche industry, cyber security.

The June 8-10 conference, the third one organized by the NATO Cooperative Cyber Defence Centre of Excellence based in the capital, will be opened by President Toomas Hendrik Ilves.

It will cover cyber defence from technical, legal and political angles, focusing in particular on developing cyberforce capability and the technologies, personnel and organizations a state needs to combat cyber threats.

Keynote speakers include German computer scientist Ralph Langner, who has publicized what has ben termed the world's first "cyber weapon", the Stuxnet worm; US special agent Richard LaTulip and American hacker Charlie Miller.

Read more: http://news.err.ee/sci-tech/0ae4f31f-497c-4861-940b-f8123ec203b1

ERR - In its Economic Outlook report, released May 25, the Organization for Economic Cooperation and Development (OECD) raised its forecasts of Estonia's economic growth to 5.9 percent in 2011 and 4.7 percent in 2012.

The figures mark a significant change from the 3.4 percent and 4.1 percent that the OECD had predicted just last month.

The rosier figures come one week after Stockholm-based Nordea Bank changed its 2011 growth forecast to 5.7 percent, up from the 4.2 percent it had predicted in January.

The OECD further predicted that consumer prices will rise 4.6 percent this year, slowing to 3 percent growth next year.

Read more: http://news.err.ee/economy/6c0e0d26-0284-4c04-a61f-33787e1e4e39

BNS – The listed Estonian furniture and softboard maker Viisnurk announced the acquisition of a softboard factory in Pussi for four million euros at auction on Wednesday.

Andres Kivistik, chief executive of the Parnu, southwestern Estonia-based company, said the purchase of the Pussi factory is a strategic investment for Viisnurk. "We have a similar factory in Parnu working at full capacity 24/7, but we are not able to satisfy the entire potential demand. As there is demand for our products, we plan to achieve the full capacity of the Pussi factory by late fall this year," he said.

"We estimate that it will be possible to produce up to 70,000 cubic meters of softboard a year in the Pussi softboard factory and the turnover of the factory could thus be around 7-8 million euros. It means a significant increase in turnover for Viisnurk and will help broaden our sales geography," Kivistik said.

With the support of the new production capacity Viisnurk will be able to increase sales to its customers in Asia and western Europe for whom it could not produce enough in the Parnu factory as Scandinavian customers were given priority, the CEO said.

Completed in 2009, the Pussi factory came to a standstill in May 2010. The factory was built by MKT Holding and the total cost of construction and equipment exceeded 14.7 million euros. MKT Holding was declared bankrupt in October 2010. The factory was first put up for auction in December last year at a starting price of 200 million kroons or 12.8 million euros.

Viisnurk posted a turnover of 13.9 million euros and net profit of 771,000 euros in 2010. Export accounted for 83 percent of the turnover.

BNS – Metso, a global supplier of industry technology, will provide a new batch cooking plant to Horizon Pulp & Paper's Kerha mill in Estonia.

The facility will go into operation at the end of this year, the company said. The purchase of the installation is a part of the sack craft production 120 million investment program that will last for several more years.

A representative reported Ashwani Sharma, board chairman of Horizon Pulp & Paper, as saying that the new technology would increase Horizon's pulp production volume from 210 to 350 tons a day. It will also contract energy consumption by 25 percent and consumption of water by 1.3 million cubic meters a year, Sharma added. According to Sharma, the carbon dioxide emissions of the facility will contract by 35 percent and the investment will make it possible to economize 2.5 million euros at the expense of energy.

Sharma said that in two years Horizon intends to bring the annual capacity from the present 70,000 tons to 115,000 tons, replacing the "three current machines by a single, top quality, cost and energy-efficient paper machine".

Horizon produces sack craft and exports its output to 50 countries. The company fully belongs to the Singapore-based global Tolaram Group. In the last ten years Horizon has invested nearly 70 million euros into the facility.

Last year's turnover of Horizon Pulp & Paper totaled 52 million euros at 8.6 million euros net profit, with the net profit margin of 1.65 percent. The sales proceeds of the company continued to improve in Q1 this year when Horizon achieved a net profit margin  of 25 percent.