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Port of Kemi prepares itself for the growth of forest industry

Winds of change blow in the northernmost general harbor of Finland. Several upcoming investment projects in the forest and mining industry may well influence the future of the Port of Kemi more than anything before.

Of all the ports in Finland, Port of Kemi Ltd provides the fastest route to northern parts of Finland and Scandinavia, as well as to the Murmansk Region in Russia. Although the sea is frozen almost half of the year, the port is open every day of the year, 24 hours per day. Reliable towing and icebreaking services ensure flexible vessel traffic regardless of the season and weather conditions.

Most of the traffic by far, about 75%, comes from the forest industry. The ideal location makes the port an important hub also for the prospective new investments in the forest and mining industry.

– We are currently negotiating with many different operators. The biggest project is naturally Metsä Group’s bioproduct mill here in Kemi. We are also waiting for the decisions about Kemijärvi biorefinery investment, as well as Hannukainen mine, states Hannu Tikkala, CEO of the Port of Kemi.

Forestry and forest industry are Lapland’s biggest livelihoods – with a turnover of over 1,3 billion euros. When the forest industry grows, it affects all the areas. For example, in Kemi, up to 15% of the 22 000 population worked for the forest industry in 2016. The new bioproduct mill would employ directly around 250 people and in total up to 2500 people, which would mean 1500 people more than today.

For the Port of Kemi, the realization of the mill would mean almost one million tons of more products to be shipped.

– That is a significant amount. It would raise the number of export up to 2 million tons per year. As the port gets it’s income from shipped tons, every new ton brings more money in the chest, Tikkala admits.

Investments add competitiveness

Bigger shipment volume means bigger vessels and therefore changes in the port and its fairways. The renovation work of the quay number two, costing 6 million euros, will be ready this autumn. The next bigger project will be deepening the port from 10 to 12 meters. An agreement has been signed with Väylävirasto, but the final schedule will depend on Metsä Group’s decision.

– Metsä Group has however pointed out, that dredging is crucial for their project. They have also engaged themselves in compensating the preparational work we are already doing in case the mill project doesn’t actualize.

All in all the coming investments will cost roughly 30 million euros. The amount is huge considering the annual turnover of Port of Kemi, which is 7 million euros.

Tikkala is hoping to get some of the money from the operators themselves. He also counts on the promise the new prime minister Antti Rinne made regarding the infrastructure funding.

– We are talking about big and expensive investments, but in case the new bioproduct mill and possibly some other smaller projects realize, it will be a jackpot for us and all the region.

Ready for the growth

– The port has to grow to enable the growth of the forest industry. As far as I can see, the dredging of the Port of Kemi would be a remarkable and nature-friendly project also for the future, states also Jaakko Ylinampa, general director of ELY, the Centre for Economic Development, Transport and the Environment in Lapland.

Ylinampa believes that developing the infrastructure of transport around Lapland is necessary for enabling the growth of forestry and forest industry. ELY center is observing closely the need for improvements, taking into account the prospective new investments and growing traffic.

– We have carried out studies to keep up with the oncoming needs. We are hoping that when a positive investment decision comes, we will be well prepared, Ylinampa says.

Positive drive brings along new industries

The Port of Kemi is likewise well prepared to start the work as soon as Metsä Group announces its the decision.

– We have a nice, positive drive going on. This is the most interesting period during my 17-year-long career here. The prospects are the best that I have seen so far. Big forest industry projects have brought along smaller projects, for example in the chemistry industry. We are currently preparing rental agreements with some of the operators.

As the search of a new CEO is currently going on, Tikkala admits that the new director will have to jump in a moving train.

– For years we didn’t even know where to search for new clients. Now we don’t have to search, as the projects just wait to be finalized. Postponing the Kaidi project was a big setback for Kemi, but it didn’t droop us. There’s a saying in the Kemijoki river that it’s worth fishing salmon even if you don’t catch any.

The final decision of Metsä Group bioproduct mill will depend on various things, the availability of wood is one of the most important factors. The decision will be made in Spring 2020, whereas the Kemijärvi biorefinery project will be confirmed already by the end of 2019.