Feasibility study for an Estonian Materials Technology Programme

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Feasibility study for an Estonian Materials Technology Programme
2. Materials technology in Estonia
2.4.3 Chemical industry
Industry overview
The chemical industry in Estonia accounts for approximately 1% of all sales revenues of the economy and a
little over 5% of the manufacturing industry (5.3% or 5B EEK in 2009). The industry is therefore similar in size
compared e.g. to the plastics industry. 32 The chemical industry consists of two important subsectors that are
oil shale chemistry and rare earth metals and oxides production. The industry is very export oriented as 85% of
the production is exported. Oil shale exports made up 1.7% of the country’s exports in 2009.
According to the Federation of Estonian Chemical Industries, there have been a lot of efforts in recent years to
improve the efficiency and environmental friendliness of the industry. However, the federation states that the
development should still continue and needs more financial capital, skilled labour and product development to
succeed.
The majority of Estonian chemical industry related to materials technology is closely linked to construction
materials, including companies such as Henkel Makroflex, Krimelte, Akzo Nobel, ES Sadolin, Tikkurila and
Eskaro. The oil shale production is somewhat related to materials technologies as some university research
groups are studying the utilisation of oil shale waste and fly ash for construction materials production. Major
companies involved in oil shale production in Estonia include Eesti Energia Õlitööstus, VKG Oil and Kiviõli
Keemiatööstus. Materials technology is not, however, a core business of these companies and therefore, it is
unlikely that they would be willing to invest heavily in the development of the field.
A single company with relatively high importance for the country is Silmet, which has a unique position in the
whole Europe being one of the largest rare earth metals and oxides producers. The metals are of high strategic
importance globally as they are needed in various high technology applications and are difficult or impossible
to replace by other means. Some large companies also exist in agricultural chemical and fertiliser production
including Baltic Agro, Farm Plant Eesti, Agrochema Eesti and Nitrofert.
Chemical industry has undoubtedly a key role in developing materials technologies in Estonia. It corresponds
to a very large share of total production of the economy, it is very export intensive and chemistry is widely
taught at Estonian universities. Still, the role of chemical industry in Estonia is relatively small when compared
to the rest of Europe as the European chemical industry has traditionally produced twice as much chemicals as
it consumes. This is a completely opposite case in Estonia, as the country consumes twice as much chemicals
as it produces.
Unfortunately for Estonia, its chemical industry is very much SME oriented: 85% of the member companies
of the Federation of Estonian Chemical Industries are SMEs (2009) and there are only 6 companies employing
more than 100 people and 5 companies employing 50-99 people. In the chemical industry, larger companies
have a natural cost advantage gained from high volume production and therefore increasing competitiveness
of the industry requires very large investments. The REACH regulations are also a tough challenge for Estonian
chemical industry because companies need to register their products, which costs a significant amount of
money and requires an extensive amount of work. There is currently a lack of know-how in both companies
and public sector and therefore, the country needs to rely on foreign expertise regarding the REACH regulation.
R&D and education
Chemistry is widely taught at Estonian universities. Main contributors include Tartu University, Institute of
Chemistry and Tallinn University of Technology, Faculty of Chemical and Materials Technology. Other notable
players include Faculty of Science at Tallinn University of Technology, Institute of Technology in Tartu University
and Institute of Mathematics and Natural Sciences at Tallinn University. The National Institute of Chemical
Physics and Biophysics is conducting research in chemistry. The areas of chemistry education and research
include: Chemical engineering (TUT), Environmental Chemistry (TUT, TU, KBFI), Analytical Chemistry (TUT, TU),
Inorganic Chemistry (TUT, TU), Bioorganic chemistry (TUT, TU, KBFI), Biotechnology (TUT), Molecular technology
(TUT, TU), Organic chemistry (TUT, TU), Materials chemistry (TUT, TU), Electrochemistry (TU) and Physical
chemistry (TU, TUT).
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