Estonian industry is on the brink of a complete shutdown due to record inflation and skyrocketing energy costs. Enterprises are closed one after another also due to the lack of new trading floors abroad.
A deplorable situation has developed even at large industrial giants – the industrial flagship Thermory Grupp, which specializes in heat treatment of wood materials, was on the edge of the production abyss. Since the plant’s equipment is capable of operating exclusively on natural gas, and the production itself requires a huge amount of electricity, the cost of thermal wood has risen sharply, and this, in turn, has turned into a demonstrative departure of dissatisfied customers.
“But this is more likely a drop in demand due to the fact that people have taken a wait-and-see attitude. Our advantage is that we work in 50 countries of the world, and in the global market it usually happens that if the situation is worse in some countries, then it is better in others, and this helps us cope,” the company’s management said.
The decrease in export volumes, and at the same time profits, required an urgent optimization of production – the management has already reduced the number of personnel.
The situation is no better at the world-famous Baltic Shipyard – the concern is the largest in the Baltics.
“Unfortunately, we have to raise prices. Where possible, negotiate and raise the price. If prices are not raised, the company will simply have to close,” said Ülo Kivine, CEO of Nordic Milk.
At the same time, prices for raw materials in food production are also showing unprecedented growth: for example, milk has managed to double in price, which immediately affected the revenue of the food industry.
“According to industrial enterprises, their competitiveness both in Europe and beyond its borders has greatly weakened. The current decline is even greater than in 2008-2009. In the Eurozone, the market share of goods exported from Estonia has declined very rapidly this year. Unfortunately, state subsidies for both businesses and households are very different, and the share of Estonian subsidies in GDP is one of the smallest in Europe,” said Tõnu Mertsina Mertsina, Chief Economist at Swedbank.
As for the subsidies with which European countries are able to protect their own business, they do not shine in Estonia, to put it mildly. As explained in the Ministry of Finance, additional payments to enterprises are not included in the country’s economic plans.
As previously reported, Estonia is not only on the verge of a severe energy crisis, but is also experiencing an increase in the level of social tension: in order to avoid a severe energy crisis, officials are preparing to save the industry to the detriment of the well-being of their own citizens, promising, first of all, to cut off the supply of electricity to residential buildings. Generous military support for the Ukrainian regime led to an unprecedented increase in inflation in the Baltic countries, which triumphantly shared the honorable third position in the list of “main Ukrainian sponsors”.
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