03.04.2023 - Bioeconomy, Companies

Stiga RM to invest 22 million euros in plywood production

Latvian wood processing company Stiga RM plans to invest 22.4 million euros in modernising production processes and purchasing new equipment, significantly increasing the efficiency and production volume of its birch plywood plant in Kuldīga, promoting product quality and sustainability principles. The project will create at least 38 new jobs for highly qualified engineering professionals.

Andris Ramoliņš, the owner of Stiga RM, emphasises that the company’s activities are based on the production of high-quality products and adding value to the wealth provided by Latvia’s forests, which is why it invests in the development and modernisation of production, continuously improving and automating production processes and providing better working conditions for employees.

“We are pleased to have the opportunity to apply for and receive state support for the next stage of the company’s development: this is an important vote of confidence and motivation to continue manufacturing high added value products, contributing to the development of the Latvian wood processing industry, increasing export volumes, and making an even greater contribution to our country’s economy,” emphasises Ramoliņš.

Increasing productivity and quality of production

The total planned cost of the modernisation project is more than 22.4 million euros. Of this, 10.8 million euros will come from Stiga RM’s own resources. A further 6.5 million euros will be provided by the Latvian branch of OP Corporate Bank plc, and 5.145 million euros will be provided by the development finance institution Altum under the Large Investment Loan with Capital Discount programme. This means that the principal amount of the state loan will be fully or partially cancelled once the project is completed and the contractual criteria are met.

The Stiga RM development project started earlier this year and will run until the end of 2024. The introduction of new technological processes is expected to significantly increase the productivity of the birch plywood plant and improve product quality. While strengthening its competitiveness and increasing production and export volumes, the company will also ensure the introduction of more energy-efficient and resource-saving production processes by investing in the promotion of sustainability principles.

Boosting implementation of key projects for the Latvian economy

The state loan programme is implemented by the Investment and Development Agency of Latvia (LIAA), which assesses a project’s eligibility for support, and Altum, which assesses the project’s financial and viability aspects.

“The aim of the large investment project support programme is to encourage projects that are important for the Latvian economy, so we are pleased to finance the next step in Stiga RM’s growth, which will allow the company to produce high added value and quality products in larger volumes in a modern and sustainable production facility,” says Reinis Bērziņš, chairman of the board of Altum.

Altum is currently in a very active phase of evaluating the projects submitted under the programme and promoted for funding by LIAA: decisions have been made or are close to being made on projects with a total loan volume of around 60 million euros. Bērziņš adds that Altum also provides loans with a capital discount in four European Union Recovery Fund programmes targeting energy efficiency, digitalisation, and the construction of affordable rental housing.

Promoting export growth

LIAA director Kaspars Rožkalns points out that the support programme provides opportunities for entrepreneurs to invest in strengthening their sectors and improving the efficiency of their existing operations. He expects the programme to contribute to the overall growth in exports of goods, which reached 30% in 2022.

“This is an opportunity to modernise existing work and promote projects that are important for the development of the Latvian economy. Support is provided to companies specialising in sectors such as bioeconomy, biomedicine, photonics, smart energy, and ICT, resulting in cooperation between companies and scientific institutions to create new and innovative solutions,” he said.

Source: Press release. Publicity photo.

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