Best practices from Estonian businesses

Introduction

The Republic of will be one hundred years old in 2018. Of this, more than 51 years were influenced by the Soviet occupation, which literally destroyed the entire economy. Since independence was regained in 1991, Estonia has become one of the world’s success stories – in just a few decades we have built a vibrant economy where there is a place for traditional industries with their long history, as well as innovative enterprises.

How did we do it?

Estonia’s population is small, but our people are smart and innovative and they take the initiative. Estonian soil has no oil or gold, but we have . The Estonian labour force is not as profitable as that in China or India, but our political and seismographic environments are stable. Estonia does not lie at the heart of , but we have a unique geographic position on the border between the EU and Russia, which makes us a gateway in both directions.

This , “Made in Estonia”, provides the reader with some examples of the Estonian economy: companies stemming from Estonian capital, ideas or history, which are successful in international markets, and for which is integral to their growth. Some of them represent proud moments in the history of the Estonian economy and can boast one hundred years of existence, whereas others are fresh enterprises that are already enjoying the first fruits of success.

This book could include a lot more companies, but space is limited. This selection is not conclusive as there is an abundance of great exporting and innovative companies – but hopefully there will be new publications in the future to introduce them.

We hope that these examples will awaken an interest in the Estonian economy, help create contacts and show off the beneficial enterprising environment which awaits international companies and new start-ups in Estonia.

Shale oil as an alternative to petroleum

One of the most used fuels in the world is oil. For decades, this resource has brought wealth to many countries, including Saudi Arabia, Russia, Iran, the and even Norway. But now, energy experts are seeing a future in . Crude oil resources are declining and the price has remained high for several years. For this reason, experts are constantly searching for alternatives to oil – for example, in the United States the use of fracked shale oil is quite widespread. Another alternative fuel is oil-shale oil or just shale oil. The world estimate of petroleum resources is 1.2 trillion barrels and of 2 trillion barrels. But shale oil resources are noticeably larger than both, namely 2.5-3 trillion barrels. On the other hand, the production of shale oil is much more complex and resource-intensive than oil drilling and for this single reason technological advancements play such an important part in the extraction of shale oil. This is where the extensive experience Estonia has comes into play. Estonia has the longest history of are 45% lower than in ash-burning IEA believes that the demand for fossil working with shale oil in the world – kettles used in traditional electricity fuels will remain the same for decades approximately 100 years. The first production. Enefit is in to come. Twenty-five years ago, fossil attempts of producing oil from oil shale accordance with all the strict European fuels covered 82% of the world’s were made as early as in 1919 in the Union environmental standards. energy demand and the percentage has Tallinna Sadamatehas, and within two Estonia has crossed borders in order remained fairly constant. This illustrates years a trial oil was started in to share their knowledge about oil how difficult it is to change the energy Kohtla-Järve. Eesti Energia, owned by shale, by attending conferences about resources the world uses. IEA’s prognosis the Estonian State, has been producing energy production and talking about shows that even if methods of saving oil since 1980. their experiences, and by developing energy are used and new, renewable Eesti Energia owns unique shale oil the oil shale . Eesti Energia sources are found, by 2035 a quarter , where the patented Enefit runs development projects in of the world’s energy needs will still technology, which has been produced and Utah, in the US. Other developers be covered with fossil fuels. This is by Eesti Energia engineers, is used. This have started oil shale projects in the reason why fossil fuels, including technology enables the production of oil Australia and preparations have begun oil shale, should be used as efficiently even from oil shale with a low calorific in Canada, Mongolia, Morocco, and environmentally consciously as value. As a by-product of this kind of oil, and Uzbekistan. If the projects are possible. Enefit technology is one of the high calorific oil shale gas is produced. successful, the amount of oil produced most environmental-friendly oil shale Both the gas and the residue heat of from oil shale is set to increase rapidly production methods available, and it its production is used for producing in the coming years. So far, shale oil has enables the extraction of all that shale electricity. The ash that is left behind by been industrially produced – besides oil has to offer. the process can be used in . Estonia – in China, , Australia and Shale oil is experiencing a second This means that nearly 100% of the the USA. coming all over the world. Between energy in oil shale is used. The experiences Estonia has in the 1970 and 1985, for shale Up until 2012 Eesti Energia had two field of oil shale industries and shale oil oil production were actively developed Enefit140 for oil production. production are valued around the world in the United States, but the whole At the end of 2012 the first Enefit280 and they have opened several doors process slowed down because the price oil production factory was completed. for the country. For example, Estonia of oil decreased and it no longer made The two Enefit140 devices and the was able to join the International economic sense to continue along Enefit280 factory produce up to 3 Energy Agency (IEA) in November 2013. this path. Now, however, the topic of million barrels of shale oil, 140 million The head of the agency, Maria van shale oil production has again become m3 of oil shale gas and approximately der Hoeven, says that it is important attractive, because the price of crude 200 GWh of electric energy a year. for the agency that Estonia has been oil has reached record heights and is Enefit technology is clean – no water is researching oil shale for nearly 100 years showing no signs of reducing. required, the ash produced contains no and is at the forefront of developing organic materials and the CO2 emissions shale oil technologies.

6 Oil production plants of in Kohtla-Järve, built in 1925–1936 The glorious history of brown gold

The Estonian oil shale industry will soon be one hundred years old. This resource, which has been named the Brown Gold of Estonia, was first extracted industrially as early as 1916 – and this is the year which is officially considered the trade’s birthdate. But in reality, the story of the burning stone started a long time ago. Back in 1870, the local baron Robert von Toll used the resource in running his distillery. There are over 20 locations in Estonia where oil shale has been mined in some point in history. Oil shale is a common resource all over the world, present on all the continents, with over 600 known locations. All deposits are slightly different from each other in terms of colour, calorific value, humidity and other chemical and physical values. But only a few countries are actively extracting it and the Estonian oil shale industry is remarkable for its long history and know-how.

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Therefore, in some places, it is possible to extract this resource from . If the oil shale lies deeper than 30m, it is more practical to construct a mine. Both methods are in use in Estonia. At least two centuries passed before the initial hints about the burning stone entered modern knowledge. Historian and writer August Wilhelm Hupel (1737–1819) mentioned findings of ‘oil stone’ near a little Estonian manor. German naturalist Peter Simon Pallas (1741–1811) published the notes of A. J. Güldenstädt, a traveller and explorer, who mentioned some 1725 findings of a stone which burned when ignited, in Jõhvi, Estonia. The first scientific studies on Estonian oil shale were conducted by Gregor von Helmersen, who announced in 1838 that local oil shale is suitable for the production of heat energy, oil and gas.

Open pit mining of oil shale in Kohtla-Järve (before 1930) Underground mining of oil shale (before 1940) Loading of oil shale on railway carriages (before 1920)

Estonian oil shale, or kukersite, was formed more Many other studies were made as well, but large-scale studies than 400 million years ago. It was made by plankton regarding industrial use had to wait until the fuel crisis which sediments in a shallow sea. On closer inspection, the oil followed the First World War. shale often shows up remains of ancient marine animals The first preparations for extensive oil shale mining were made and plants. In Estonia, the oil shale deposits are quite in eastern Estonia, near the village of Pavandu, in a close to the surface compared to many other deposits. belonging to the Russian Ministry of Trade and Industry.

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At first there was no noteworthy Production capacity was low during Bor nuclear power plant was built. Oil capacity, the machinery was demolished the initial years of mining, but it shale mining amounts decreased gradu- during the war and every­thing had to boomed very quickly at the end of ally and now some 19 million of be started anew. The concept of the the 1940s. The regime had changed brown gold are extracted each year. Eesti Estonian oil shale industry lived on and once again and under Soviet rule Energia is the biggest oil shale processing grew in St Petersburg, where a number the oil shale industry was one of the company in the world and it uses some of Estonian engineers and technicians most keenly developed branches 15 million tonnes of oil shale to produce worked. They had their own society and of economy. Energy produced from electri­city and shale oil each year. There a goal of putting their knowledge and Estonian oil shale had to cover most are a couple of other companies using experiences into good use for the sake of the energy needs of north-west this resource in Estonia. of their homeland once the war ended. Russia. In 1956, 1.3 million metric Oil shale’s role in global energy produc- They also considered the possibilities of tonnes of oil shale was mined in tion has been quite small compared to oil shale. Estonia, and 93% of the locally and petroleum, for example. The In , Estonian territory produced electricity came from oil high price of petroleum and the ever- was freed from German occupation. In shale. In 1959, the Baltic Thermal increasing energy need have increased , construction engineer Märt Raud Power Station was launched in the debate about reviving the use of introduced his plans for developing the with a power of 100 MW, which Estonia’s brown gold once more. oil shale industry to Estonian statesmen, was meant to guarantee the energy showing it to be an important resource. supply to north-west Russia. Its Raud was assigned as the director of burning systems were specifically Interesting facts the oil shale department of the Ministry designed to use oil shale. • Oil shale is suitable for direct fuel to of Trade and Industry and started As the energy requirements of north- produce electric energy or liquid syn- purposeful to implement his plans west Russia increased, another big thetic oil. for developing an industry. thermal power station, the Estonian • Estonian oil shale deposits cover The oil shale industry was mostly owned Electricity Station, was built between around 3,000 km². Some 425 km² have by the state and its controlling body was 1969 and 1973 in north-eastern already been extracted. the State Council of Oil Shale Industry, Estonia, with a capacity of 1,610 MW. • According to various estimates, consisting of government representatives Oil shale mining expanded, and in around 1–2 billion tonnes of usable and professors. 1970 17.5 million metric tonnes were oil shale remains, and around 1 billion The first industrial heavy user was the extracted. tonnes have already been extracted. Kunda Industry, which started The mining peak came in 1980 • Estonian oil shale is about 450 million to use oil shale in their rotary kilns in when approximately 30 million years old. 1921. Around the same time, the first tonnes were extracted. Following • The energy value of local oil shale is testing factory for shale oil was launched this record year, the ’s approximately 8–11 MJ/kg. in Kohtla-Järve. Electricity from oil shale hunger for Estonian oil shale elec- • Estonian oil shale lies between 2 and has been produced since 1924. tricity decreased, as the Sosnovy 70 m below the earth’s surface.

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Kalev – the confectionery factory for generations of kids The confectionery company Kalev touches the heart of every person living in Estonia. Generations have grown up being treated to the sweets made in the factory and everybody has their own story associated with one of the products. Some remember the box of assorted chocolates by Kalev they used to get from Grandma each Christmas or the alternative, the Soviet New Year party. Legends are told about Kalev chewing gum – such rarity this side of the Iron Curtain that if you got one, you kept chewing it for a week or so. The marzipan from Kalev was a mystery item – you never saw it in the stores, as all of it was sent to . Kalev refers to 1806 as the year of its establishment – that’s when Lorenz Caviezel opened his tiny confectioner’s in Tallinn. The house where the business was located still belongs to Kalev and the Maiasmokk café in the is considered to be the oldest operating café in Estonia. Production by Kawe, the predecessor of Kalev, was well-known outside Estonia prior to the Soviet occupation of the Estonian Republic. The company exported a third of its production and the high season meant working three popular well beyond Estonian borders – How Kalev chewing gum made a space shifts: one for the Estonian market and the Russian court of Nikolai II regularly flight? two for other countries. ordered shipments from them. Kalev was the first company in the Before the outbreak of the Second Kalev continued the tradition of making Soviet Union to produce chewing gum. World War, Kawe had commercial marzipan figures and these were the This remarkable event took place in representatives in several locations all favourites of the rulers in the Kremlin 1968. The chewing gum, called “Tiri- over the world. The beginning of the at the time. Leonid Brezhnev was the aga-tõmba“ (“Pull and Drag”), had been Soviet era slowed down the progress of biggest fan, for his jubilees a lot of produced for just a couple of months the company – the variety of chocolate overtime was needed at Kalev. At the when the Soviet leaders declared the and cocoa products was cut back and same time, the “common Soviet people” chewing of gum to be an inappropriate the production numbers were halved. barely knew about marzipan, as the western habit, incompatible with Soviet On the other hand, cookie production famous figurines hardly ever made it to people. increased. regular shops. Shortly after that the leader of Kalev, But a progressive Soviet factory Today the Kalev confectionery belongs Edda Maurer, still found a way to needed a different name to Kawe – a to Orkla, one of the largest Norwegian produce chewing gum. To wit: at that combination of the letters of the names conglomerates, but despite the foreign time the Soviet cosmonauts were of the capitalist owners Karl and Kolla owners still feel the bond taken on a tour of the sweet factory Wellner – so a new name was needed with the traditional production. This and Maurer got them interested in the – fast. A commission to pick the best sentiment is confirmed by Kalev being forbidden gum. She encouraged several name was appointed. Believe it or not, the best known brand in Estonia, tests with chewing gum in the Star but the name Red Sweetie was almost and the fact that sweets produced City Space Centre near Moscow, and chosen. Kalev, the hero of the Estonian by Kalev are very competitive on the the results confirmed the outstanding national epic, won by just one vote. local market compared with imported taste and hygienic properties of the Kalev has always been famous for hand- confectioneries. As much as 45% of the gum, as well as the refreshing effect on painted marzipan figurines. In Estonia market is still held by Kalev. Kalev has the cosmonauts. As it is not possible the confection made of almonds and about 400 employees and produces to brush your teeth on space flights, powdered sugar has been produced about 200 varieties of treats: mainly the cosmonauts were given Kalev since the Middle Ages. chocolate bars and sweets, but also peppermint chewing gum to keep Marzipan figures made by Kalev and caramel, chewing gum, toffees and their teeth clean and fresh. The whole its predecessors have been known and dragées. The historic hand-made sweet process was top secret of course, as loved throughout history. At the end of tradition is proudly kept alive: exclusive there was nothing more classified than the 19th century Georg Stude, a Baltic gift boxes are filled with fine chocolate the space programme’s information. German, established a marzipan and candy, and marzipan figurines are still chocolate production factory in the hand-shaped and hand-painted today. rooms of the former Lorenz Caviezeli Alongside all this, much attention is paid confectionery. Stude’s marzipan was to innovation and new products.

12 Loading of the Liviko in Mere Puiestee in Tallinn (beginning of the 20th century) Milk and vodka – the source of riches in Estonia from time immemorial Estonia has always been a foodstuff producer: the history of the local goes back centuries. Manors profited from distillation of vodka and making dairy products, whereas bakeries prospered in towns and cities. There were times when vodka distillation was more profitable than any other activity, and there were 700 distilleries in Estonia. Most of them were in manor farms, as distilling vodka created a fire hazard and could not safely be done in cities. Vodka was distilled by peasants in serfdom and peasant farms were required to participate as part of their corvée. Distilling was not always easy and it gave grounds for riots; one of them, known as ‘the War of Mahtra’, being one of the biggest peasant riot in Estonian history.

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plant in Narva, and some others as well. These plants also provided distilling devices for other Russian provinces. Liviko is the oldest surviving continuously operating producer of alcoholic beverages in Estonia. It was established (under a different name) in 1898 and it was the sole producer of spirits and alcohol in Estonia during the Soviet era. But vodka was not the only local product. Around the same time the started to grow, dairy production became increasingly important. At the end of the 19th century there were around 200 manor dairies in Estonia, either steam or horse powered. They produced mostly butter and Swiss cheese. Taking their lead from the manors, even farmers started to establish their own domestic dairies. Thus, dairying became the main source of income in Selection from an Estonian lunch table Estonia before the First World War. In the period 1924 to 1939, butter Estimates suggest that Estonia was producing 1.4–1.6 pails of vodka each year accounted for about a quarter of Estonia’s by the end of the 18th century. total exports and for around half of the A pail was the unit of measurement for vodka and it equalled 12 litres, so exports of agricultural products. Two-thirds the total production was 17–20 millions of litres. As a comparison, Liviko, of the butter went to the United Kingdom Estonia’s biggest spirits producing enterprise, produced 22.3 million litres of and one-third to . vodka and spirits in 1984, just before the prohibition years enforced by Mikhail Complex events in the 1940s decreased Gorbachev, the last General Secretary of the Communist Party of the Soviet the amount of dairy products. The pre-war Union. So it can be said without doubt that the prosperity of the manors in levels were not seen again until 1965. Then Estonia depended greatly on the of the spirit. some major restructuring started in the And it was the rapid growth of the spirit industry that gave rise to the Estonian dairy industry. The subsequent decades industry. The famous Krull mills were established mostly because saw the building of giant integrated plants, the distilleries needed equipment. In the 1880s, the Krull mills produced and old, small diary plants were closed. only distilling apparatuses. In addition to Franz Krull, they were made also in In 1950 there were 212 dairy industries in Friedrich Wiegand’s engineering plant in Tallinn, Fr. Mehring’s engineering Estonia, but at the end of the Soviet era,

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all the milk produced in Estonia was processed in just nine integrated dairy plants and two integrated meat and dairy plants. After the end of the Soviet period, production and consumption of dairy products experienced a sharp decline. Then, in 2004, after joining the , dairying started to grow again. New plants have been built and the enterprises are using world-class technologies. There are a number of small industries as well. The range of dairy products in supermarkets is wider than in many other European countries. In addition to butter, bacon was another famous export product which was also shipped to the United Kingdom before the Second World War. Back then there were hundreds of meat production plants in Estonia. Our current biggest meat products provider, the meat processing plant Rakvere, was established in 1890 when the first slaughterhouse was opened in the city of Rakvere. In 1944, enterprisers Baumann and Shenkel opened the meat processing plant based on the city slaughterhouse and a sausage plant. The enterprise was reconstructed in the 1960s. In 1987 it signed a contract with the Finnish company Suomen Rakennusvienti and by 1990 they built a new meat processing plant, the biggest and most modern in the Baltic States, with technology which matched European standards. During the Soviet era it was customary to expand all enterprises into giants, and the same applied to meat processing plants – they were gigantic, designed to supply the whole of Russia. Therefore, it is of no surprise that many of them went bankrupt after the fall of the USSR – the market simply ceased to exist. This was the fate of the meat processing plants of Tallinn and Võhma. The latter induced a social catastrophe, as the whole town of Võhma was focused around the meat plant and there was hardly a family where at least one member didn’t work in the plant. O. Jaska, foreman of the Pastry Plant Estonian bakeries have their own reputable history. of the Tallinn 2nd Bakery (1954)

15 Tallinn bakers were first mentioned in 1312, regarding their newly formed guild. Three centuries later there were 14 bakers plying their trade in Tallinn; the majority had their workrooms and a shop under their own roof. Industrial baking started on 2 November 1762, considered the birthday of Leibur, the biggest bakery in Estonia. On this date, Julius Valentin Jaeksch bought a two-storey stone house in Tallinn’s Old Town and started a bakery. Newspaper advertisements from that time tell us that the baker made black bread and simple white bread. In 1881, the bakery obtained steam-powered equipment. Electricity was introduced to the bakery as early as in 1914, although they were the second

bakery in Tallinn to do so. The enterprise had up to 16 employees in 1938, and had increased to 71 ten years later. The bakery made black bread, white bread and pastry products for decades. It also Tallinn Meat-Packing Plant (1980) boasted a cafe. The bakery had been in continuous operation for 232 years until 1994, when Leibur had to return the house to the Quality inspection at the Sausage Unit of the successors of its former owners. Meat-Packing Plant (1972)

16 During Soviet times, small bakeries were joined together as integrated plants where they started to produce bakers’ and pastry-cooks’ wares, as well as pasta. In 1976, four plants and five other production units were joined under the name of Leibur. The new enterprise also included the yeast factory of Salutaguse and the bread factory of Haapsalu. The enterprise then started to ship their products in containers – and important step in the modernisation of production processes. A notable leap in the number of bakeries occurred during the ‘new’ republic – in 1990 there were only 18 bakeries in Estonia, by 2012 there were already 125. In 2012, the food industry was responsible for 1.6% of Estonia’s GDP, and food exports formed 14.6% of the exports of industrial products. There are approximately 450 food industries in Estonia and half of them are micro enterprises with fewer than nine employees. The export of dairy products is growing the fastest, a quarter of the food exports.

Interesting facts • Spirit production was an extremely important industry at the end of the 19th century – estimates suggest it made up almost 60% of the whole industry in north Estonia. The majority of it went for export, whereas the Russian province of Estonia only managed to use 5–6 per cent of the production capacity of the north Estonian distilleries. • In the 19th century, an average farm cow produced 360 kg of milk a year. • By the end of the ‘first’ Republic of Estonia prior to the Soviet times, there were 696 dairy plants in Estonia.

• Among Estonian Red cows, the record holder is Liqueur master Ilse Maar, one of the authors Miilas, who produced 18 187 kg of milk in 305 days. of the legendary Old Tallinn liqueur (1960s) Estonia ranks high among European countries in terms of milk production per cow. Staff and production of the Leibur Plant (1980)

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Tallink – not just the largest passenger shipping company in the world

The owners of the shipping company have – in 17 years – expanded the company to be one of the largest passenger shipping companies in the word. None of its competitors have as many new ships as Tallink. The start of operations for Tallink can be considered 1996. Back then the only route was between Tallinn and and the company used a few rented ferries. But just a year later the company purchased the first ship of their own and from then on their fleet has been gradually expanding. The CEO and one of the owners of Tallink, Enn Pant, remembers that back then there were constant whispers about how the business model of Tallink has been built on Finnish ‘vodka ’ and the company had over- extended itself. Today the owner can look back on these stories with a grin because a large, well-operating shipping company could not be maintained merely on ‘vodka tourists’ and there is no sign of struggling with loans. In 2013, Tallink is one of the largest companies in Estonia, employing 6700 people, with a fleet of 19 ships. If you take into account the fleet’s accommodation capacity, meaning the number of bed company and shipping and the amenities offered on the ships are only a part of the services the company has to offer. In theory, tourists can receive all the services they need from Tallink: they can travel on their ships, stay in a Tallink , shop in stores owned by Tallink and be driven around in Tallink taxis. Vessels owned by Tallink also sail on other seas besides the Baltic. One ship is rented to Canada and sails in the spaces on the ships, then Tallink is the good connections with Western Canadian Archipelago and two run largest passenger shipping company in and so we went ahead and did it.” He is between Ireland and England in the the world. And the competition is left very happy about the constant growth of Irish Sea. What makes the Tallink ships far behind. Although Tallink has been the company, even during the economic unique are their ice classes. expanding year on year, the purchase of crisis. Pant has no fear that Estonians one of its competitors – Silja Line – was and Finns will tire of travelling across Interesting facts of notable importance in the company’s the Gulf. “We see a lot of potential for • In 2012, 9.6 million people sailed development. This purchase is the development in the area. If you look with Tallink. Tallink’s routes are Estonia- largest business deal in the history of at the development of airports, in the , Finland-, Estonia- Estonian businesses and in all likelihood olden days there was only a shop or two Sweden and Latvia-Sweden. it will never be topped. The 800 million there, but today they have turned into • The company runs four in euros which Tallink spent on buying out large shopping centres. Ships are the Tallinn and one in . their competitor – which, it should be same – they are turning into shopping • In 2013, Tallink owned a total of 19 noted, was larger than Tallink – is an centres,” he says. “The Finns have vessels. incomprehensible amount of money always been fond of minibreaks, and • 47% of Tallink’s customers are to most people. Pant says that the deal they are starting to become more and Finnish, 21% Estonian (2012 data) was compared to the yearly budget of more popular among Estonians as well, 10% of the company’s customers come the Estonian Health Fund. who like to go to Helsinki for a day of from outside the Nordic countries. Where did the courage come from to shopping, for example.” • On the Riga- and Tallinn- purchase the larger, financially struggling For quite some time Tallink has been Stockholm routes, Tallink has no competitor? “We figured that we were more than just a company ferrying competitors: they are the only carrier. doing quite well running a shipping people from one side of the Gulf to the • Half of the market share of passenger company, so taking over Silja shouldn’t other. Today the company is more of transportation in the Baltic region is be a problem either” says Pant. “We had an than a transportation owned by Tallink.

20 View of the Port of Tallinn (1930s) Estonian tourism industry began with mud baths Tourism in Estonia started to grow when the railways were built in the 19th century, and first it was mostly associated with health resorts. The mud on the seashores of Haapsalu was found to have useful properties and Haapsalu became the favourite leisure destinations for Russian courtiers and the intelligentsia. Popular resorts were opened in other coastal regions of Estonia as well: Narva-Jõesuu, Pärnu and Kuressaare. Resorts were established in naturally beautiful places; they in turn generated businesses and launched a new economic line – tourism. In 1920, local authority leaders and entrepreneurs formed the Estonian Association of Tourism as a civic initiative. The aim of the association was to create interest within Estonians and foreigners alike in travelling to Estonia, Estonian holiday locations and health resorts and in Estonian nature and people. In several locations, holiday homes, or ‘tourist homes’ were established.

21 In 1921, an company called Aeronaut was founded and it started flying between Tallinn and Stockholm, but mostly it commuted between Tallinn and Helsinki. It was an important transportation route, especially in winter, when severe ice conditions discontinued sea for months. From 1921 to 1927 Aeronaut made 4419 flights, carrying 10 000 passengers, 78 tonnes of and 20 tonnes of post. The first tourist bus in Estonia was completed in 1935. It had room for The first postal flight to Finland of the Aeronaut airplane on 7 February 1920 up to 50 people and it even had a toilet. 1936 was a record-breaking year for tourism, for there were over 117 000 foreign visitors, almost twice the number of the previous year. There were over 2000 guest rooms available throughout Estonia, in boarding houses, inns and tourist homes. The Second World War disrupted the growing tourism industry. Many hotels were destroyed and hoteliers fled the country. Later, all the accommodation establishments were nationalised by the Soviet administration. Estonia was now part of the USSR and the borders were closed. After the death of Joseph Stalin in 1953, it became a bit easier to move around, but still it was mostly domestic tourism, visiting other Soviet republics and receiving visitors from them. For foreign tourists, the borders were still almost totally closed and if they still managed to get in, they were prevented from moving around. There were no decent accommodation or catering establishments. Lobby of the Kuldne Lõvi Hotel In the mid-1950s the so-called ‘thaw period’ started, and along with it came some contact with the outside world. In Estonia it meant the large-scale construction of resorts and holiday homes. Estonia became a very popular holiday location throughout the USSR, for

22 Beach Cafe (1930s) Bathroom of the Kuressaare Mud Baths (1920s)

the environment here was considered to be ‘Western’ and the level was good. During the next decade, there were more and more tourists from the Eastern bloc and the first big hotels were built in Tallinn. In 1963, Hotel Tallinn was built, and in 1972, Hotel Viru. The latter remained the most refined hotel in the whole of the Soviet Union for years, accommodating only foreign tourists. In 1965, the first regular shipping line to Finland was opened, and it became an iconic marker in the history of the Estonian tourism industry. But at first it only had a small pavilion in the Port of Tallinn, where the current A Terminal is now situated. It was so miserable Tourist home at Lake (1956)

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for the massive number of foreign visitors that were expected. The city got a new air terminal, a big entertainment venue called City Hall, Hotel Sport on the seashore at Pirita, designed for the athletes and their accompanying personnel, and Hotel Olümpia in the city centre, with over 300 rooms. After the fall of the USSR, many industries went through crisis, but tourism was given a boost. In the 1990s all the local accommodation establishments underwent renovations and expanded, the number of catering enterprises exploded, a national airline was founded, transport between Tallinn and Helsinki increased remarkably, and tourists started to pour in from all over the world. Soon after re-independence in 1991, was founded. During its first year it flew to Helsinki, Stockholm, Frankfurt, Moscow, Kiev, , Minsk, and operated domestic flights to Kärdla, Kuressaare and Tartu. There were some 20 to 30 destinations in the former USSR, but they were soon closed. At first, EA only used old Russian airplanes, but

The Viru Hotel in Tallinn (1972) that it was soon nicknamed the ‘henhouse’. A voyage to Helsinki took four hours. During the first season, the line carried 12 000 passengers. In 1980, the sailing competitions for the Moscow Olympics took place in Tallinn. Before this great event there were immense construction works in the city Passenger ferry MS Georg Ots in the Port of Tallinn (1993)

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those were replaced with Boeings by the end of the decade. Today, many international operate flights to Tallinn in addition to our national airline. serves around 2 million passengers a year. Besides air travel, Estonian tourism is dependent on shipping connections to the capitals of neighbouring countries. Tallink, which was found in the mid-1990s, has grown to be one of the biggest passenger liner companies in the world, and the Port of Tallinn welcomes more than 9 million passengers each year. The biggest tourism attraction in Estonia is the medieval Old Town of Tallinn, one of the most preserved examples of its kind in Europe. Another attraction is our pristine nature – many foreigners marvel at the Shop window advertising Estonian tourism in New York (1931) amount of forests and deserted seashores. Come winter, the ice open: when the sea freezes over, tourists can drive their cars to the islands along What to see and what to experience in Estonia? the specially marked and secure provisional ice roads. And the one field that started it all is still there: spa tourism. • Some 150 years ago tourists travelled to Haapsalu in order to • Song Celebration pamper themselves in mud baths – and so it is today. During the past few decades, many spas have been established in Estonia, • and the existing ones have been renovated. They offer a very • Estonian Museum of Art KUMU wide range of services and the local spas are famous in the • Swamps, bogs and forests neighbouring countries, in busloads of health tourists. • National parks Estonia as a tourism destination has become increasingly • Deserted seashores popular, as is shown in the rapidly growing number of nights • Estonian islands spent in hotels. In 2012, Estonian accommodation establishments received over 2 million foreign tourists. That is double that of ten • Ice roads years previously. The majority of tourists still comes from Finland, • Setumaa, a rural region in South Estonia but the fastest growing segment is tourists from Russia. • Sauna a la Estonia

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ABB Estonia sells almost all its products abroad

Nowadays, the government tries hard to attract prestigious foreign companies to Estonia, but in the early 1990s it was quite a different story. For Bo Henriksson, the Baltics Country Manager of the Swedish-Swiss power and automation technologies company ABB, the first experience was being lectured by a customs officer at the port and told to go somewhere else. “ABB asked me if I’d like to go to Tallinn to do business there. I did. I packed my things in Finland and drove to the ferry. I had a computer, a printer and stuff like that in my car. I had all the export paperwork with me and then, in Tallinn, the customs officer asked where my partner was. I told them that I didn’t have partner. And that’s when I was told to go away,” Henriksson recalls. He has been the Country Manager in Estonia ever since. Actually, ABB did not have any specific long-term plans in Estonia – they simply wanted to get the most of the current market. The company had been looking for markets in the Soviet Union, which was already breaking apart, and in 1991 the headquarters decided to move east. customers in 1998, and a year later orders started to come from Sweden. The more exotic destinations for boards made in Estonia have been Brazil, Spain, Jordan and Uzbekistan, thanks to orders from some ABB partner enterprise or other com- panies for a more complex project. ABB Tallinn was actually quite a random choice. “My orders were to make business started modestly and without much fuss in and develop it – and should I fail, someone else would take over,” Henriksson Estonia, but later on the factories were set says. up because the industries in Finland were A foreign investor did not even need tax incentives or promises from ministers, as unable to satisfy the demand. That’s why the door to the market was wide open with no competitors inside. At least not yet. a factory for producing electric machinery, Despite the negative first impressions due to the irritable customs officer, ABB actuators and solutions for renewable Estonia was registered on the last day of 1991 and their activities could start. energy was established. One hundred per The times were turbulent – the value of the rouble fell every single day, and there cent of production is exported. Of ABB was no proper legislation, or even a proper state. Estonia’s production, 95% is exported. It Henriksson tells a story about a funny incident at the beginning of the time of is worth mentioning that it is not cheap the kroon as the currency. He went to the with his 10 000 subcontract production – most of the end to change into Estonian kroons. The bank teller did not have anything bigger products are exported. than the 25-kroon notes, but the total sum was almost 30 000 kroons. So, the Speaking of future plans, Henriksson says teller started to count out great piles of money. When she noticed Henriksson the company is constantly looking for new was ha­ving a bit of trouble with them, she offered him a bag to carry the production directions and is prepared money in. “I’ve never made it that fast from the bank to the office. Fortunately, it to close the ones that make losses. “I do wasn’t too far away,” he laughs. But the enterprise started to grow from the very not know what our production will be beginning, despite the difficulties. In 1992, ABB Estonia employed 20 persons, but like in five years,” he says. “Technological now the staff numbers more than 1300. progress is so mind-bogglingly fast, it’s Turnover has grown from 30 000 euros to almost 160 million euros a year and hard to predict anything.” today ABB Estonia is one of the biggest power and automation technologies com- panies in the country. The main production for the Estonian market is electric boards, wind Interesting facts and diesel generators for export, various components for wind generators and In Estonia, ABB built the first nationwide other electrical gadgets, frequency converters, equipment for producing renew- electric fast charging network in able energy and kiosk substations. When the company started in Estonia, they the world. It comprises 152 fast charging produced distribution boards – and at a mysteriously high price at that – only for points in different locations in Estonia. Estonia and as a subcontractor for Finland, but in 1995 Latvia and and The network was launched at the begin- the CIS countries were added as customers. Ukraine and Russia became regular ning of 2013.

28 Workers of the RTE Radio Plant at work (1930s–1940s)

The electronic industry drives the growth of Estonian exports

The Estonian has seen immense growth and rapid decline throughout its history of a little over one hundred years. Nowadays most Estonian electronics industry companies belong to foreign owners and they are all very active exporters. The first electronics industry company in Estonia, Edisson & Co, was founded in 1907 by Paul Mullik (aka Mullikas) in Tartu. In 1924 the company was the first in Estonia to begin producing radio equipment under licence from the German company Telefunken. Five years later the Swedish enterprise Ericsson acquired the company and it was renamed Tartu Telefonivabrik (Tartu Telephone Factory). At the start of the Soviet occupation the factory was nationalised. Unfortunately the factory did not survive the war – it was completely destroyed.

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After the war the factory was rebuilt and for several years it was only known by a number, not a name, and all of its produce was diverted to the military industry. Nowadays the successor of Tartu Telefonivabrik is a company called Hanza Tarkon, which produces various electronic components. In the 1930s, several companies building radio receivers began operating in Estonia, and once the Raadio ja Elektroonikatehas (RTE – Radio and Electronics Hans Rammo and Rudolf Kukk, workers Factory) was founded, electronics became a notable industry. The larger factories had their own units, where technical of the receivers of the Tartu Telephone Factory (1941) were made, but the smaller assembled the receivers from plans bought from abroad. Production volumes were still relatively modest. Building of the Tartu Telephone Before the start of the Second World War, RET managed to produce over Factory (1910) 20 000 appliances, ARE nearly 18 000, Tartu Telefonivabrik and J. Rammul’s radio factory Standard-Raadio nearly 10 000, and ÜLO Raadiotehas at least 3 000 units.

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The Estonian electronics industry was given a kick-start after 1945, under Soviet occupation. However, most of the items produced went straight to military use and ordinary people never even got to see them. Mainly for this reason, many electronics factories located in Estonia were so-called “numbered factories”, meaning that their names had no reference to the area where they were located, instead they were given just numbers – the enemy could not have any inkling where military equipment was made.

The new Estonia Stereo radio built in the Fitter of the Assembly Unit of Battery-Powered Receivers Punane RET (Red RET) Radio Plant (1970) at the Punane Ret Radio Plant (1951)

After Soviet rule had begun, many radio factories were combined and the resulting enterprise was named Punane RET (Red RET). The factory produced items for the Soviet war industry, but it also continued building radios. In 1960 the first Estonian computer – the M-3 Estonia – was constructed in the very same factory. Later the factory produced high-end audio technics till the restoration of Estonian independence, after which it lost most of its former market share. However, the high-end part of the survived and the Jõhvi production unit of Punane RET evolved into a new business, Audes, which even today produces top-quality speakers and acoustic systems, which are known around the world and exported to many countries.

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One of the giants during the Soviet era was the Pöögelmanni factory (officially known as the Hans Pöögelmanni nimeline Elektroonika Tehas - The Hans Pöögelmann Electronics Factory). Nearly half of the production of this massive factory was delivered to the Russian war industry, but consumer were produced as well. Because there was a constant shortage of everyday items in the Soviet Union, all factories, even those specialising in military equipment, were ordered to produce consumer goods as well. So it was no wonder that a tank-building factory also made knives and forks, and the closed Pöögelmann factory, which normally constructed military electronics, also built transistors, car tachometers and other electronic spare parts. Funnily enough, even WC cistern chains were made in this factory for six years. After the transistors, there came a leap forward – the Pöögelmanni factory started making chips, or integrated circuits, which represented the next generation of electronic components. The most important and best-known consumer goods associated with this company (the factory was later known as Tondi Elektroonika – Tondi Electroniks) were hearing aids for the hearing- impaired. In 1989 the company made a record 176 500 of them. The production of hearing aids continued until the summer of 2012. Fitter-mechanic at the Tallinn Radio At the end of the Soviet era and following Engineering Plant (1961) the restoration of Estonia’s independence, many local factories faced difficulties. Their production had been mainly orientated towards the Soviet military industry, but then suddenly Ericsson phone (1993) their products was no longer needed. The factories were privatised and even if attempts were made to keep them running, they slowly waned. However, this was by no means the end of the industry in Estonia. Far from it, because large Western groups had discovered that its location makes Estonia a prime spot for building business relations with Russia. It also had skilled workers with knowledge of electro­nics who could be used in new businesses. So in the 1990s the new surge in the Estonian electronics industry began, although

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the new production differentiated­ greatly Electronic engineer and reelman at the from that of earlier Tallinn Audio Cassette Plant (1986) days. In the 1990s, local computer Interesting facts started Largest electronics manufacturers in to develop and many Estonia today: old employees of • Ericsson Eesti AS – telecommuni- Tondi Elektroonika, for cation equipment example, found work in • Enics Eesti AS – electronic com- the newly-established ponents for industrial and medical computer company appliances Microlink. In 1997 a • Scanfil OÜ – telecommunication company called Elcoteq equipment began the mass • ABB AS – electric switchgears and production of Ericsson power generators mobile phones in • Ordi AS – computers Tallinn, and within a • Around 95 per cent of the elec- few years it had grown tronic industry’s production is sold into one of the largest abroad exporters in Estonia. • Export of electronic components After the Finnish constitutes around 20 per cent of Elcoteq went bust, the Estonia’s total export. factory was taken over by Ericsson and now In numbers: it is used for making • Between 1954 and 1992, Punane telecommunication RET built more than a million radio equipment. devices. At the beginning of the 2000s, a large concern called ABB began trading in • A factory in Võru, which built gas Estonia. Today its Estonian branch has the largest turnover of any company analysers, was already exporting its in its sector. Nowadays the Estonian electronics sector is mainly export- products to 25 foreign countries dur- orientated and most of its larger businesses are owned by foreign enterprises. ing the Soviet era. Nearly 200 companies are currently active in the field, and in recent years the • The Pöögelmann factory electronics industry has been one of the fastest-growing in Estonia. employed 3 500 people in 1980.

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Lingerie with a twist, worn by the bold and the beautiful of the world

What is the connection between such trademarks as Apple, Stella McCartney, Nikon, Sony Music and Kriss Soonik Loungerie? They all have been named the most coveted trademarks of Great Britain by CoolBrands. By the way, you can’t apply to get on this list – it’s compiled by a jury of 3,000 consumers and experts. Being one of the world’s top brands is a dream come true for Kriss Soonik, the lingerie designer behind the brand. Her story is like something out of a fairy tale – a girl who dreamed big and tried to fulfil the dreams. She started with nothing, but five years later she has a successful brand to show for her work and her products are being sold in 16 countries. And it is an exclusive brand at that – the lingerie is not cheap and her clients are among the bold and the beautiful of the world. The Kriss Soonik brand has been covered by Vogue, ELLE, GQ, Cosmopolitan and Style.com. Kriss Soonik entered the world of while helping a friend during the Supernoova competition for young designers. She got the bug and started designing clothes herself. Women’s clothes at first, but when she turned 20, it dawned on Kriss that there were no lingerie firms in Estonia. That was the start. Soonik’s line is not limited to conventional lacy bras and panties, she offers comfortable lounge and bed clothes, with a twist. They can be worn both as underwear and ‘overwear’. And she has not studied fashion or design. What she studied was business and instead. and an Estonian woman living in London “During the first five years I did things for shows, just who does her PR and marketing. out of the pure joy of making them. Those things were Besides Estonia, Soonik’s greatest not meant for sale, they were an expression of me,” markets lie in the US, Japan and the UK. Soonik says. At the same time she was working for She considers selling in Japan as her Agent Provocateur, a prestigious lingerie company in biggest achievement. “My style suits London. At their shows Soonik attracted the atten- the Japanese, but the market is hard tion of several lingerie shops, which started to contact to get into. The cultural differences her. “They asked for a price list which I did not have. are significant and you have to have To be honest, I had no idea how to manufacture those an insider there. I found ‘my Japanese things,” she laughs. person’ at a trade fair in New York, Kriss Soonik started her own company at the depth of when an owner of a Japanese online the economic recession, in 2009. Only after this step store approached me to make an order. did she start to wonder where to manufacture her pro­ Soon they became our agents and a ducts, where to get the fabrics, and so on. She found a year later there were eight stores selling Tallinn company Calibrato to be the best subcontractor. our produce in Japan.” How big is her Soonik says it is not cheap to manufacture in Estonia, lingerie empire likely to grow? Soonik but the seamstresses from Calibrato have come to be says she is currently in negotiations like her own workers. “They have put their hearts in our with the Chinese, but the market in work, they are interested in how I’m doing, and they China is frighteningly large. “There are provide high quality work, often with deadlines which huge amounts, even the test order was are quite crazy.” very large,” she confesses. But she has Four years after starting the company, Soonik felt it was no plans to become a major clothing time for the breakthrough. “Previously I had no idea company. “Ideally I would like to have what was going on, but then suddenly I got a good feeling and the moment for five people working with me, with growth had arrived.” Soonik has developed everything herself – no investors are everybody having a strictly focused role. involved, she has not mortgaged her parents’ house, and there are no significant Even my biggest competitors in London loans. She has help from her mother who is responsible for logistics in Estonia, have quite small crews, and it works.”

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Kreenholm Manufacture in Narva

The clothing and has seen both prosperity and famine

The clothing and textile industry in Estonia has a long history and there have been both good and bad times. There were times where the Kreenholm Manufacturing Company was the biggest and most modern in Europe and times when the majority of this industry was dependent on subcontracting. The industry’s history started 200 years ago, when the production of fabrics first started and industrialisation became more and more prevalent. The start of the local textile industry was 1819, when P. Momma, a merchant from Narva, launched a broadcloth mill. The mill produced mainly fabrics for uniforms and overcoats, but also some dress materials just before the Second World War. The mill was operational until 1944.

37 Stutthoff family and established the Kreenholm Manufacturing Company on the island the next year. Its cornerstone was laid on 30 April 1857. The mechanisms of the spinners and looms were driven by water turbines. The manufacturer produced cotton thread, cotton cloth and cotton for the Russian market. The whole production complex was completed by 1862. The Kreenholm Manufacturing Company was the most modern industrial production plant in the whole of the , and the biggest textile plant in Europe. And it was not just a manufacturer, it was a city in itself, providing the workers with everything that they needed in life, starting from tenement houses and kindergartens to a and a church. What’s more, Kreenholm also owned a part of the local cemetery. Kreenholm was badly damaged in the Second Viljandi Linen Factory (before 1920) World War, and it was not until 1962 that the plant was fully rebuilt. The enterprise produced a wide range of different fabrics: technical fabrics, As more and more sheep were being reared in Estonia, a broadcloth cloths for undergarments, dresses and , mill was also erected in Kärdla, on the island of . Some years decorative fabrics, terrycloth, cotton spun yarn, etc. later the Sindi broadcloth mill was started. Overall there were quite After the fall of the Soviet Union, Kreenholm was a lot of smaller textile mills in Estonia until the start of the 1900s, sold to the Swedish company Boras Wäfver, who most of them using local raw materials such as lamb wool and flax. bankrupted the enterprise in 2010. Flax growing was very popular in the second half of the 19th century, Today there is no cotton thread or fabrics produced bringing wealth to many farms. Later, flax growing went through in Estonia, only pillows and duvets, the export of hectic times - both ups and downs – but it decreased during the which forms about two-thirds of all textile exports. Soviet era and faded away after re-independence in 1990s. But the The biggest textile enterprises in Estonia are AS flax mill (established in 1851) on the banks of the Narva, was the Wendre, AS Toom Tekstiil, Hilding Anders Baltic AS, biggest flax processor in the Russian Empire (of which Estonia was AS Mistra-Autex and Qualitex AS. a part back then). At first it produced sailcloth, but later some finer The story of the textile industry also includes the linens came from that mill as well. story of Estonian garment industry, also called the A new era began in 1856, when a merchant from Moscow, Ludwig during the Soviet era. Knoop, bought Kreenholm Island in the River Narva from the There were several well-known clothing enterprises

38 in Estonia, such as Baltika, Sangar, Klementi, Marat, etc. The heyday of this industry was the 1980s, but several enterprises disintegrated after re-independence. The ones who remained have found their share of the export markets, and there are many new companies whose aim is to export and avoid cheap subcontracting assignments. The biggest clothing companies in Estonia today are Baltika, Silvano Fashion Group and Lenne (children’s clothes), as well as Sangar and Ilves-Extra from Tartu. Baltika, being the biggest clothing company in Estonia, was started in 1928 under the name Gentleman, producing raincoats. It was renamed Baltika in 1959 and started to produce formal suits. It was 40 years later that Baltika started to produce women’s clothing. Today, the CEO and owner of the company Meelis Milder calls his company a fashion industry and it is the biggest of its kind in the Baltic States. Sindi Textile Factory A good example of taking over a neglected niche is the story of Lenne, a company producing children’s clothes. It started as a family company top athletes around the world. The company started out in Tartu, in 1991, designing and producing overcoats for but now produces in China and Vietnam. “You can be as economical children. There are probably very few children as you want in Estonia, but as long as everybody else produces in in Estonia today who have never worn a Lenne Asia, your prices are not going to be competitive” – this is how major jacket or trousers. And it is no wonder, as the shareholder Arvo Kivikas explains the need to move quality is equal to any foreign competitor. Lenne is away from Estonia. The company exports two-thirds of its products to also a successful exporter, selling only every fifth approximately twenty countries around the world. item in Estonia and everything else in Finland, Today there are more than 400 companies in Estonia that design and Latvia, Lithuania and Ukraine. sew garments, employing around 6000 people. Ilves-Extra, producing sportswear, is also a good example of smart specialisation. Being almost quarter of century old, the company produces Interesting fact sportswear under the brand name ISC, the Two-thirds of Estonia’s clothing production is exported. mark that can be seen on the clothes of many

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A snow plough and innovation – what could they possibly have in common?

This is a fair question, because for most people a snow plough is nothing more than a piece of metal attached to a vehicle for pushing away snow. The owners of Meiren, Jaan Meikup and Raoul Renser, do not share this view – their company produces snow ploughs that can be driven automatically, and which are known around the world for their innovativeness. As proof, the company, which started building snow ploughs in 2003, has won several awards given to ploughs produced by them for their innovative approach. Initially Meikup and Renser had the idea of starting an engineering bureau, but as Renser had worked at the Eriautobaas and had experience with snow ploughs, they slowly started to produce those. Meikup states that at first they did not realise how moderate the development of the product had been around the world and how much business potential their snow plough advancement would have. “Yeah, I suppose you need to be a bit ‘odd’ to start designing and developing a snow plough” he says. “In reality a snow plough is a very eight metres wide in one ploughing. Such ploughs are too powerful for urban use but they are ideal for two-lane highways – both lanes can be cleared in one journey. The company has already sold the first of these ploughs to Sweden. The lion’s share of the company’s production, meaning around 80 per cent of ploughs, are sold abroad – to the Nordic countries. In Estonia complicated and high-tech device there to drive the vehicle, the plough you can see Meiren’s yellow-and-black and snow is not just frozen water, but is intelligent enough to operate itself. ploughs on the streets and at Tallinn a substance with extremely variable Furthermore – it constantly collects data Airport, which has never been closed properties.” on the condition of the surface and due to problems with snow clearance. Snow plough developers talk of snow the quality of the work, and displays In 2013 Meiren sold approximately 200 ploughing as a – the plough this info to the driver. In future the ploughs but the ambitious owners aim needs to throw the snow to exactly information shall also be automatically to start selling a thousand a year in the right spot; the plough has to follow forwarded to the client, who will have the near future. The results so far are the road surface as closely as possible a clear image of what they are paying commendable, as the company only (this means less is needed); the for. Also, the data gathered from the started serious sales work in 2010-2011. vehicle needs to use as little fuel as ploughs can be shown on an interactive The company is not concerned about possible; and the ploughing action has map, which would enable drivers to large competitors. Instead, they see to be quiet. The plough also has to be see which roads have been cleared to the small size of the business as an able to clear possible obstacles on the what extent and where the ploughs are advantage. “We are small (the office road, such as manhole covers, and not currently operating. This is the plough and production in total employs 120 damage the road surface markings. In the company is currently developing. people), but we work rapidly and we can the production of snow ploughs, high- “The goal is to maximise work efficiency, make changes quickly,” says Meikup. “It tech solutions such as polyurethane, meaning that the road is cleared in as is true that our competitors are able to laser cutting and robot welding are used. few ploughings as possible and less sell more ploughs, but their products One would imagine that this is the limit salt is needed,” says Meikup. “The cost are not as high-tech as ours and the of innovation when it comes to ploughs. reductions and environmental benefits development process in large companies Far from it. At Meiren, the future of the we could achieve are obvious.” is not as fast as it is with us. Our tech- snow plough is pictured thus: the person A vehicle equipped with two of Meiren’s nologies are a couple of years ahead of manning the ploughing vehicle is only movable ploughs can clear a road over theirs.”

42 First electric motors produced by the Volta Plant (1924–1925) The Estonian engineering industry – from vodka distilling apparatus to high-tech snow ploughs

The expansion of the Estonian industry began with the building of the first railway in 1870. If during the Soviet era the keywords of the industry were the Russian market and military, then today they are exporting and subcontracting. Over time, a wide variety of machinery has been produced here: railway carriages, aeroplanes, submarines, reactors, ships, all kinds of and details, drilling rig components, measuring instruments, machine , and so on.

43 It is notable that some Estonian industries were very large already at the beginning of the previous century and employed thousands of workers. One of these companies was Dvigatel, the railway carriage building factory, the construction of which began in 1889 in Tallinn. The construction of the factory itself was already a massive undertaking, where nearly 8000 people worked, including skilled workers from factories in Riga. The factory complex included a boiler plant, a machinery department, turning, casting and shops, a saw mill, carpenters’ and mechanics’ workshops and a railway station. The entire area was covered with a Assembly Unit of the Volta Plant (1913) dense railway network and it was all built Foundry of A/S Franz Krull (1910) in a record time of nine months. The factory began operating fully in March 1900 and after two months the first trial run was carried out with a railway car built at the factory. It is known that by 1901 Dvigatel employed 2600 people. During the first period of the Estonian Republic, the production volumes of Dvgatel and other factories similarly orientated to the Russian market reduced noticeably. And that was not the only problem – the working in the factory was also bad. This can be ascertained from internal rules written back then, which among other things stated that reporting for duty in an intoxicated state was not allowed, and neither was playing cards during working

44 hours, or bringing alcoholic beverages to work and sleeping at work. The decline worsened and in 1931 the large factory went “under the hammer”. It was purchased by the director of a similar enterprise in Riga, who managed to turn things around, to the extent that Dvigatel began building aircraft. In 1900 another large engineering factory began operating – AS Volta. Volta built electric engines and alternators for the Russian market from materials received from there. In 1913, when the AS Noblessneri shipyard began operating, Volta built the entire electrical equipment for submarines constructed in their factory.

Compressor Testing Plant of A/S Franz Krull (1935–1936) produced by the F. Wiegand Factory (1910)

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The company did very well until the end of the Soviet era, but then they lost their market, as did many other Estonian industrial businesses. Privatisation of the company was also unsuccessful at first. Dvigatel suffered a similar fate. The factory was essentially destroyed in the Second World War, but it was rebuilt and a new era began, which could be characterised with words like reactors, geological surveillance appliances and secrecy. The number of workers grew rapidly – by 1979 the company employed 5800 people. The large manufacturers in the Soviet states had another, hidden agenda besides regular production. These large enterprises drew in new people to Estonia every day from all over Russia. They came here looking for work and a better life, bringing along their families. So it is no wonder that the workers in large factories spoke mainly Russian and that the factories themselves were more like small states Mechanical of the A/S Plant (1935) within a state. The newcomers had to be housed somewhere, so living quarters built specifically for them were erected in various locations. When the First World War began, the whole Volta factory (work benches, And as if that wasn’t enough, Dvigatel workers, equipment) was relocated to Perm and a while later the factory was one the main hubs for the counter restarted in the Urals, in a small town called Barantsinski. The in Tallinn movement during the restoration of remained empty for nearly five years, after which they were used by various Estonian independence, fighting tooth other businesses, including the Kawe chocolate factory. It was not until the end and nail against the reestablishment of of the Second World War that the Volta factory was reconstructed using trophy the Estonian Republic. Opposition to the machinery, and production began once again in wholly new dimensions. For state had been shown from the company example, in 1963 the Volta factory produced 242 000 electric engines, 70 000 even during the first establishment of the small engines, 190 000 clothing irons, 2000 waffle makers and 6700 radiators. Estonian Republic.

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Like other large Soviet factories, Dvigatel crumbled after Estonian independence was restored. On the vast grounds of the company, spanning 33 hectares, lies today the diverse and future-orientated City of Smart Businesses – Ülemiste City, which houses many different companies. However, the manufacturing potential of Dvigatel has Interesting facts survived in many new engineering industry businesses, who are now making products • The Pirita Olympic torch was for the Western markets. made in the Dvigatel factory. Today the engineering industry is the leading branch of processing industries in • Before the First World War, Estonia. A third all the people working in manufacturing are employed in engineering three large shipping yards were businesses and the section also makes up a third of all Estonian exports. It is fair to located on the peninsula say that without export many local engineering factories would not exist, because as in Tallinn. They even built many as 85 per cent submarines. of companies active • Lampposts made in the Franz in this area sell their Krulli factory can still be found products abroad in some parts of Tallinn. This as well. The main factory, built in 1865, started export partners are off by constructing vodka Sweden and Finland distilling apparatus, then cooling and subcontracting is appliances, ice generators, steam used a lot. and wood processing Approximately half of machinery. It also churned out the turnover comes kitchen stove tops, wood burning from completing stove doors, chimney valves and subcontracted grave crosses. During the Soviet orders. The main era, the factory was renamed advantage of local Tallinna Masinatehas (Tallinn businesses continues ). The greatest to be the low accomplishment of the factory Grader produced by the A/S Ilmarine Plant (1930s) production cost of during the Soviet times was their output, but the construction of an oil shale many companies are extracting machine, which was working hard to reduce the importance of subcontracts and are expanding the share the only one of its kind in the of their own production. world. Of course there are also companies who target their resources at the design and • Currently there are intensive scientific research of their own products. A prime example of this is Baltic approximately 150 active Workboats, which builds small vessels, and Meiren Engineering, whose snow ploughs engineering industry companies are unique for their innovative high-tech solutions. in Estonia.

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Workboats built in can be found on many seas

Many ship building companies operate in Estonian biggest island Saaremaa, but what makes Baltic Workboats (BWB) special is that the ships they make can be found on many seas around the world, from the Arctic Ocean to the Mediterranean. In 1998 not much besides the slipway was left of the Saare Kalur ship repair yard in Nasva, Saaremaa. But businessmen Margus Vanaselja and Märten Vaikmaa decided that the time and place were right for establishing a shipyard. So it began – building ships from scratch. Today patrol boats, catamarans, ferries, police boats, pilot boats, maintenance ships, research vessels, etc. are all built here. Between 1998 and 2013, a total of 130 vessels have been built by the company. Work flows rapidly through BWB’s workshops, where all available spaces are full of half completed ships. Latvia is awaiting a research vessel for Riga harbour, and two orange oil spill response vessels will soon begin to sail on the Pechora Sea. Soon the construction of two new ships set to operate between small Estonian islands will begin, which will replace Authorities from the neighbouring the half-century old ferries that are countries prefer to order workboats currently in use. A number of ships specifically from Saaremaa. The are docked outside and are either reason might lie in the fact that waiting to be delivered to their new BWB is a very young company owners or have been brought here and everyone here is very open to for winter storage, such as Runö, a innovation and modern solutions. catamaran, which plies the route This has not gone unnoticed at between the mainland and the national level – in 2013 BWB Island during the summer months, was named the Estonian defence and Abro, which operates on the enterprise of the year for the five route. boats they built for the Swedish coast The modern workboat is very diffe­ guard. rent from its predecessors. It is natu- Over time, the size of the vessels built ral for the vessel to be quiet, warm, by BWB has increased. Development comfor­table to use and equipped towards building larger vessels has with the latest technology. The con- been gradual, mainly because the tinued increase in fuel prices places company does not want to use an importance on a vessel’s fuel effi- subcontractors. It prefers to maintain ciency. But it still needs to be fast, so full control over the entire building that any offenders are unable­ to out- process. Almost all ships built by the run it. Even the very smal­lest details company have been one-off, bespoke have been carefully consi­dered. orders, where even the tiniest detail “This railing, for example – touch has been thoroughly discussed with it – it’s heated,” says the CEO and the client, and the ship the client one of the owners of BWB, Margus receives meets their requirements Vanaselja, introducing an orange fully. Each year the company pilot boat standing by the dock. And completes about ten ships from start it’s true – the railings and ship decks to finish. for vessels sailing in rough conditions Two-thirds of the vessels built by are heated, but not for the comfort BWB go to a new home abroad and of seamen: it is to keep the surfaces the ships produced here sail on more from icing over. No other company in than twenty seas. Around here, there Estonia builds workboats like those are no seas on which a workboat made by BWB; the nearest competi- built in Saaremaa does not sail. tors can be found in Scandinavia.

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Russian-Baltic Shipyard at Kopli

Submarines, cruisers, patrol boats, luxury yachts – made in Estonia

Estonia has a long coastline, approximately 3800 km, whereas there are just 700 km of land borders. So it is no wonder that a lot of historic trades here are somehow connected to the sea and that the history of in Estonia is very long. During the 19th and 20th centuries, the shipbuilding industry grew rapidly and a maritime school was even built in Käsmu, in northern Estonia. Captains from Estonia sailed all over the world and ships built here could also be found on seas near and far. The captain’s village of Käsmu was historically well known for shipbuilding and the first vessel in the village was constructed in the 17th century. There were times when each household had their own captain or mate. The grand houses of the captains

51 and so began the construction of factories and docks in the area which now belongs to Balti Laevaremonditehas (BLRT). As orders for building a had already been placed, the Russo-Baltic Shipbuilding Company was established, which was supposed to start building six submarines. However, the political climate in 1917 was very complicated and the order was cancelled. Around the same time another large shipyard was created – Bekker & Ko. Here they were also supposed to build . Unfortunately the First World War broke out and the whole Bekker shipyard was moved out of Estonia. During the time of the Russian tsars, however, it was realised that wars were also fought underwater, meaning submarines had to be built. Therefore, in 1912 the Noblessneri Shipbuilding at the Noblessner Shipyard (1913–1915) shipyard was created (later called the Peetri shipyard), which built nine Bars-class submarines between 1914 and 1917. Then are still there to be admired in Käsmu – the captains brought along novel the company assembled several Holland-class architectural ideas and special building materials from their long travels. submarines in Tallinn and it also received The oldest watercraft built in Estonia can be considered the ruhe, an order for building 20 large submarines. originating from the Stone Age, which was carved out of a tree trunk The materials did arrive but the boats were and used for travelling on rivers and lakes. At different times very diverse never completed because Estonia declared its vessels have been used in Estonia. History enthusiasts have made independence. Instead, the materials were historically accurate copies of many of them. For example, people can try used for building three cargo ships for the out a haabjas (Finno-Ugric single log boat), which is a small boat carved Estonian shipping company. These motorised out of an aspen tree, or a Peipsi barge, also known as a lodi, or sail on a sailboats were completed in 1922 and were historic small sailing yacht or on a kaljas – a type of schooner. named Läänemaa, Harjumaa and Virumaa. However, ship construction has not been limited to just wooden boats. The newly established Estonian Republic A century ago the military vessel building plan of the Russian Tsardom benefited greatly from the improvements stated the requirement of building new shipyards and naval bases. It was made in shipping construction on the Kopli decided that the best location would be the Kopli peninsula in Tallinn, peninsula. The destroyers Avtroil and Spartak,

52 which had been built there, were now owned by Estonia and they were included in the Estonian . They were renamed Lennuk and Wambola. These boats successfully took part in the Estonian War of Independence. Interesting facts Later, Lennuk and Wambola were sold and the money was used to purchase • An ancient ship was discovered two new and modern submarines from Britain – Kalev and Lembitu. Kalev in 2008 in Salme on Saaremaa. The was lost in the Second World War, whereas Lembitu is being displayed in the determined Estonian Maritime Museum. that it sailed on the as a When the Soviet occupation began, the Noblessner factory was renamed warship. This discovery indicates that Tallinn Shipyard or Factory no. 7. It can be assumed that Russian submarines open sea sailing on the Baltic Sea began came here for repairs, but as this area was closed off and no documentation sooner than it had previously been exists, there is no definitive proof of this. thought. Until now, maritime historians The first new vessel after the restoration of Estonian independence was have considered the Oseberg Viking built by the BLRT Group in 1997. BLRT Group is an industrial holding, which ship found in Norway, which is thought operates in the area of ship building and repairs in Tallinn and neighbouring to have been built between 800 and countries, and its headquarters are still in its historic location on the Kopli 850 AD, to be the oldest sailboat in the peninsula. area. However, the Salme ancient boats Other shipbuilding companies in Estonia include Reval Shipbuilding, which (two of which have now discovered) constructs medium-sized vessels such as ferries and tankers, and Baltic are dated to 750 AD, which means they Workboats, which deals with smaller custom-ordered workboats and builds belong to the pre-Viking era. them on Saaremaa. • At the beginning of the 1940s, factory On Saaremaa there are also 19 companies that build yachts, powerboats owner Mr. Vahtman ordered a 60- and other similar smaller vessels. The largest of these enterprises is redwood yacht from Peetri shipyard. The Luksusjaht in Roomassaare. The boats this company makes are truly luxurious Germans, however, took the ship as a and expensive, and most of the production is sold to rich and famous in war trophy in 1941 and gave it to Adolf neighbouring countries. Hitler. Shipbuilding in general can be considered the driver of the economy on • In the autumn of 1917 the Front Saaremaa. A testament to this is the high number of exports in this sector – was approaching Estonia and many nearly 90 per cent of the turnover of small vessel construction companies companies were evacuated to Russia. comes from selling their production abroad. The main export countries are This was also the case with the Russo- Finland and Sweden. Baltic and Bekker shipyards which were Because the ship building sector on Saaremaa is thought to have a lot of sent from Estonia to Novorossiysk in potential in the future and the production of these companies is world class, an echelon consisting of 360 carriages. they have now began training small craft building specialists at Kuressaare However, a factory worker later recalled College, which is part of of Technology. This speciality has that only 300 carriages arrived at the never been taught at a higher level in Estonia before, and the hopes destination. Sixty carriages of goods are are that from here a new generation of shipbuilders in Estonia will be raised. still missing.

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The owner Indrek Laul has just finished a trip around the Estonia piano factory and on his way takes a seat at one of the black pianos waiting for a new home: Gershwin, Mozart, some bars of a piano concerto by Rachmaninov, then Chopin’s nocturne… there is no other comparable piano company in the world owned by a concert pianist. Probably that’s one of the keys to success for Estonia today – who else than someone who has practised the piano his whole life knows better what a really good piano must feel and sound like? But Estonia pianos must be of the highest quality – otherwise why else has the factory sold more than 2500 of the charming-sounding beauties to the United States in the last couple of decades? Estonias can be found in many homes and concert halls all over the world and are sold in almost all major cities in the United States. In total, 90% of all Estonia pianos are exported, most of them to North America, but also to Australia, Japan, Belgium, Germany, Spain, the Netherlands, Thailand, Brazil and Finland. Building a piano is done by hand from the first step to the last, and it takes months to complete one instrument. Piano factory managed by a top pianist Each master working on an instrument It is quality that counts – the instrument a market that knew our pianos due to is an expert specialist in his field, has to sound flawless and feel good to their previous poor quality. We changed many of them having worked as piano the fingers. the quality and we changed our image. craftsmen for years. What about the Today’s success is not taken for granted. It has been a long and complicated people who build pianos – are they In fact the factory was in quite a poor road.” Naturally, Indrek Laul is the best into music as well? The answer is state when Indrek Laul joined the game salesman for the enterprise. Choosing provided by the sounds of a piano from in the middle of the 1990s. The quality an instrument is a complicated and one of the rooms – the man working standards for the instruments then were emotional process, so Laul speaks about there has decided to spend his lunch from the Soviet times, meaning they Estonia, our culture, our language, our break practising. That’s not all – the were not good enough any more, and song festivals, our love of singing. And instruments that are being completed the financial situation was nothing to be about the piano. And of course he plays are regulated and adjusted by a proud of either. So, how much does an the instrument. Master’s graduate from the Estonian Estonia of today have in common with One of Estonia’s biggest competitors, Music Academy. the ones built in the Soviet times? Steinway Musical Instruments Inc., is a public enterprise, but Laul says he is not interested in stock markets. “We want to demonstrate the development of the quality of the instrument,” he says. “And we want to retain the enterprise as a family business, to build the pianos, the whole process, in Estonia. We really like what we are doing. It is beautiful, noble, sublime, and ethical to build pianos…I’m On a global scale, the piano factory “The size, the number of keys, the not sure we would be as happy as we owned by the PhD graduate from number of pedals and the name,” Laul are now in some other field.” Juilliard, Indrek Laul, is tiny – just a says jokingly. “Everything else is diffe­ fa­mi­ly business with about 40 employ- rent. Better.” Laul aimed at the US ees, which builds up to 200 pianos a market in the middle of the 1990s and year. Being small in size does not mean Estonias were of the lowest quality cate­ Interesting facts that they think small. Quite the con- gory then. • Five different models of grand piano trary: Estonia pianos have to be com- From then on, the pianos “Made in are built in the Estonia piano factory. In parable to the very best in the world Estonia” have moved straight up in the latter Soviet years there were just of pianos, like Steinway, Bösendorfer, terms of quality and reputation, right two. Fazioli, C. Bechstein. It’s worth mention- to the very top. “That’s quite an unpre­ • Up to three months – the length of ing this world is not about Facebook cedented development,” says Laul. time clients have to wait until they get adverts or mass TV advertising. “Especially considering that we went for their instrument.

56

Ernst Hiis, designer of the Tallinn Piano Factory, supervising workers (1953)

Pianos made in Estonia were already well-known several centuries ago Pianos have been made in Estonia for more than 300 years. The first written notes date back to 1779, when Johann Friedrich Gräbner advertised his home-made instruments, including pianos, in the local weekly “Nädalaleht”. Throughout the history of Estonian piano production more than 80 different models have been made.

57 When the Estonian piano industry started, Gräbner was not the only master to The best-known masters were build instruments here. During the next 150 years, several enterprises making Aleksander Läte, Oskar Heine, Johannes pianos were founded and terminated. There were smaller workshops that Vihma, Hermann Jurak, Hans Orntlich operated for a shorter period, but also masters who were renowned for a long and of course Ernst Hiis. Naturally, time and were well-known for their pianos both in Estonia and abroad, such all the instruments were examples of as Friedrich Wilhelm Hasse, who made upright and grand pianos in Tartu in pure handicraft. Tartu had the biggest 1830–1864. It is known that in 1842 the world-famous Hungarian composer and number of workshops – nine in all. There piano virtuoso Ferenc Liszt played on his grand piano in the Main Hall of Tartu were also some smaller workshops University. where just a couple of instruments were In 1846–1886 O. D. Wenzel was active in Tartu, and his spinet pianos can still be made, or there is no information about found today. The first bigger producer of pianos was probably Robert Rathke, the size of production. who also operated in Tartu and whose factory made almost 1200 pianos The most recognised master then between 1868 and 1891. Then he moved to St Petersburg and was successful was Ernst Hiis, who became the one there, too, making another 4500. Johannes Moritz (operating 1872–1918 in to create the first models for Estonia Tartu) was almost as successful. pianos. Hiis had studied how to build Pianos made in Estonia were renowned internationally. For example, those made pianos at Robert Rathke’s in Tartu and by Jaan Rässa were awarded gold medals at World Fairs in Brussels and Madrid then set up a workshop of his own in St in 1907 and 1908 respectively. Another craftsman, Jaan Olbrei, came home from Petersburg. For years he honed his skills Madrid with an honorary gold medal for his Kraemann/Olbrei pianino in 1907. there and returned to Estonia in 1918. But the piano-building craft really got into full swing during the first period of the But here he had to start from scratch Estonian Republic. It was again, as he couldn’t even take the piano then that about 50 skilled blueprints with him from Russia. masters came home from In 1922 Hiis and Co established AS St Petersburg following the Astron, which was the trademark for revolution. They had been his pianinos and grand pianos. He trained in the famous piano set as his standard the world-famous factories in St Petersburg, Bechstein, from Germany. Almost 900 and in the years that Astron pianos were produced until 1940 followed, about 20 masters and they were exported as well. In the made pianos here and the meantime Hiis managed to set up his instruments were sold own piano factory in Tallinn. The pianos abroad as well. There were built there were called “Ihse”. several piano workshops The beginning of the Second World War in Tallinn, Tartu and even and Soviet rule meant an almost total Building of the Moritz Piano Factory Kuressaare. end to piano manufacturing. in Tartu (1910)

58 The factories were destroyed, and the owners of several of them fled abroad. Hiis was the only one who continued building pianos, and he was the one to start the new piano production in Estonia in the 1950s. As to the question why he based himself in Tallinn, the legend-like story goes that Hiis had built a pianino for the Soviet leader Josef Stalin for his 70th birthday and it was sent to Moscow. No one can tell for sure if he even noticed the gift amidst the thousands sent to him, but soon after the event Stalin, as the Chairman of the Soviet Council of Ministers, issued a decree to start the production of concert grand pianos in Tallinn. Hiis was 77 years old by then, but he could not miss the chance to establish a piano factory once again. That was the beginning of the Tallinn Piano Factory that was to become one of the main producers of grand pianos in the Soviet Union. About 500 instruments a year were built in Tallinn, and Estonia pianos were in many concert halls all over the Soviet Union, in schools and homes. World-famous pianists like Emil Gilels, Van Cliburn, Eugen Kelder, Dmitry Shostakovich, Leonard Hokanson, Artur Lemba, Daniel Pollack, Oskar Peterson, Anna Klas, Bruno Lukk, George de Godzinsky, Kalle Randalu and several others have played on Estonia pianos. In 1993 the factory was privatised and later Indrek Laul became the Pianos produced at the Tallinn Piano Factory (1985) owner. He recalled the enterprise being in quite an unfavourable state then, and the reputation of Estonia pianos rather poor in foreign markets, which Laul targeted from the very beginning. Laul, who is a concert pianist himself, has initiated hundreds of changes and improvements to the instrument and changed the sound characteristics of Estonia. The work has borne fruit, as today Estonia is in competition with the top manufacturers such Also zithers were produced at as Steinway, Bösendorfer. C. Bechstein, Fazioli and others. the Tallinn Piano Factory (1976)

59 An electronic garden in your kitchen An electronic garden in your kitchen

The time is near when operators and home cooks will no longer have to buy pre-packaged salad greens or herbs which are not the freshest – instead they will be able to grow their own plants indoors on a shelf built for just this purpose. Without the hassle of actual gardening. We are taking about the clever Click & Grow solution called the smart garden, where herbs are grown in special capsules placed in a rectangular smart cartridge. Plant growth is controlled by a chip in the bottom of each cartridge. The owner of the pot does not have to do anything besides occasionally adding some water into a special compartment and plugging the garden into a power source so the plants are provided with the necessary amount of light from an integrated lamp. Mattias Lepp, the founder and owner of Click & Grow, says that he was inspired to build the high-tech plant pot when reading NASA’s Mars expedition reports, where growing plants in space was discussed. “The topic seemed very interesting, so I began looking into it more, and to my surprise I discovered most people have no idea about how to grow plants,” he tells us. “The average lifespan of an indoor plant is a mere 1.5 months! This means that it’s brought home and it immediately starts to die slowly, unil it’s finally thrown away. The plants come without any guarantee and when they die, people always feel guilty.” It took many years of testing, but in 2011 the first batch of products, called the smart pot, were finally finished and shipped to Sweden. Then the company set their sights on the US market and development of their next product began. The first creation was more of a hobby product – a flower pot where only water had to be added and the pot grew the plant on its own. However, the next solution will enable people to grow everything they need for the kitchen. Even potatoes and carrots? “In the future, why not?” says Lepp, confidently. However, for now it’s just salads and herbs. Basil and tomatoes are said to be the most popular plants to grow indoors. One smart garden should fill the vegetable requirements of a single family. The key to Click & Grow’s technology lies in a small chip placed under each plant compartment, which controls the plant’s growth using software. The software is modified according to the plant being grown. Soil doesn’t come into it – meaning that the plants are grown in a special medium which is more like than ordinary potting soil. Lepp says that using NASA technologies turned out to be too inefficient from the cost perspective. The buyer receives a box that includes plant seeds and the appropriate cartridge. Assembling the product takes just a few seconds, after which the customer is able to watch the seeds start to grow into plants. Lepp says many people who have grown up in big cities find this to be quite an experience, because they have never seen anything like it before. The lifespan of the plant depends on the individual plant and how it’s kept. “Basil, for example, can grow in a box for several years if it’s well taken care of,” says Lepp. Most of the smart pots, assembled in Hiiumaa from components sourced from all over the world, are sold in the United States. Some are sold in Estonia as well, but most locals prefer the traditional way of growing plants. Lepp hopes that his creation will completely alter the basic principles of growing food. “ in its current form is not sustainable, because it pollutes groundwater and the air. Not to mention the damage done to the ecology by transporting goods across the globe, as is the case with many products at the moment,” he says. Now in its second year on the market, the company has already sold over 90 000 pots and in 2013 they hoped to reach sales of 300 000.

62 Girl dog Lotte charms young and old alike all over the world

To Janno Põldma and Heiki Ernits, authors and creators of the Estonian animation company Eesti Joonis­ film, the success of this funny and benevolent character came as a surprise. Girl dog Lotte’s feature- length animated movies have found their way into the hearts of people of many nations and have proved to be some of the most successful movies ever made in Estonia. What’s more, Lotte is no more than a mere red-dressed girl dog born in 2000, but there have been and musicals written about her, and she has travelled the world as an ambassador of Estonian culture. “We did not foresee this success – we just wanted to make a good movie,” says Janno Põldma. But the movie did really well and soon there were entrepreneurs lining up who wanted to purchase the rights to the Lotte trademark. Today, Lotte can be seen on many consumer goods targeted at children – to the extent that there probably isn’t a child in Estonia who does not know who Lotte is. Moreover, 2014 will see the grand opening of Lotteland, a family theme park near Pärnu in southern Estonia. Together with their favourite movie characters, children will get to have the adventures they already know about from the films. Põldma assures us that the authors of Lotte are carefully monitoring things to ensure that the Lotte trademark is not used on goods which don’t fit the concept and values of Lotte and her friends. For example, Lotte will never advertise meat products, as even though it may sound odd, this dog is a vege­ tarian. She eats pancakes, salads and porridge. Many Estonian embassies have had help from Lotte in introducing Estonia. A Lotte film was used to promote Estonia in and Azerbaijan, and Lotte has been an “ambassador” in Germany, France, Hungary, the United States and Russia. Lotte movies have been shown in more than fifty countries.

63 But what is the secret of their success? Põldma believes the key is in the non- violent approach and the kindness of all the characters, and that the movie is equally understandable to everybody. “The last Lotte film was shown at a festival in Brazil and in ghettoes and jungle villages – everybody understood it,” Põldma says. There are no silly “kick in the butt” jokes – children are simply enchanted by a visual which has been honed to perfection. “Children are totally quiet when they watch our movies – the story just draws them in,” Põldma says. He agrees that there is a lot of work involved in making a Lotte movie. All the drawings are made by hand, while colouring and montage takes place afterwards in computers. Eesti Joonisfilm started out in 1993 and it has two main branches: one is non-violent family movies for wide audien­ces, and the other is unique author movies or festival films. Eesti Joonisfilm is internationally competitive in both categories and the movies made in their studio have received many international prizes. Animated mo­vies are made by Heiki Ernits, Janno Põldma, Priit and Olga Pärn, Kaspar Jancis, Ülo Pikkov, Martinus Klemet and Priit Tender. Priit Pärn is the most famous in the global film , as his ani- mated movies have gained many Grand Prix prizes during the years. The world- famous film maker even has an interna- tional film festival named after him.

Scented and natural JOIK

A sweet-spicy aroma welcomes us when we arrive at the JOIK factory – this is where scented candles and natural cosmetic products are made. It is all hand mixed, tenderly and lovingly packaged and shipped to Japan, Finland, Norway or Singapore. At JOIK, everything is made from scratch using only the best raw materials. Product development is carried out on site and the selection is constantly being expanded with something new and interesting. JOIK started in 2005, almost by chance. The founder and owner of the company, Eva-Maria Õunapuu, enjoyed burning scented candles, but the selection in the shops was not always to her liking, so she tried making her own. Õunapuu looked into an alternative to using paraffin in candles and discovered soy wax as a . It should be noted that back, then using soy wax as a candle base was still quite novel in Europe, and she was the first in Estonia to begin using it. The candles, which were initially made for her own enjoyment and as presents, were very well received and this encouraged her to offer them for sale. The candles were followed by , makes it stand out,” says Õunapuu. bath accessories and body, face, hand “They like our minimalistic and and foot care products. catchy style and at the same time our For the first couple of years Õunapuu products are brightly coloured and made every product herself, but now smell delicious, which draws people’s there are twelve people working attention. And Estonia, being a Nordic alongside her at JOIK to make sure country, is also very exotic for them.” the products are well made and reach How has the company managed to the market on time. “The early days reach thirteen foreign markets in only a coincided with the time when natural year? Õunapuu says it was done quietly products were starting to become very and organically. The company has no popular,” says Õunapuu. “People were means to enter a market with a massive starting to pay more attention to what’s marketing campaign, it’s not even in the can and natural ingredients were advertised that much in the domestic becoming more and more important.” market. “The best advertisement is For the first few years JOIK concentrated by word of mouth, it is trusted more solely on the domestic market, but the than glossy billboards,” says Õunapuu, export potential of the products soon convinced. “For us, the most important became clear. Expressions of interest thing is the quality of JOIK products, came from far and wide. In 2012 the not the advertising bubble associated company started investing more in with them. We pay a lot of attention to exporting and by the end of 2013 customer feedback.” products made by JOIK could be found in thirteen different countries, the biggest Where did the name “JOIK” come from? export partner being Japan, where Joik comes from the word “joig”, which the natural products made in Estonia is a traditional Sami way of singing. are sold in the Plaza department store A joig is usually a powerful melody chain. Entry to the Japan market came without a set beginning or end. They are to JOIK in the form of a talent seeker for improvisations and no joig sounds the the Plaza chain, who happened to read same when it’s sung again. They usually about the products on a well-known start very naturally to accompany some fashion blog. “In order to stand out in sort of activity (herding reindeer, doing the Japanese market, the product has household chores, etc.). For the Sami it to have that certain something which is a way of communicating with other separates it from similar products and people, nature, the man itself and God.

68 An ingenious for photographers created by two brothers

A plastic cone with a simple design makes cone and by 2013, as many as 50 000 the everyday work of tens of thousands products had been sold. Naturally the of photographers easier and improves cone business has not been limited quality. The product is so good and to one product; instead, the brothers efficient that the name of its brand, used it as a base and developed LCDVF, has become a commonly-used several models for various cameras and word amongst photographers in the camera generations, and continued United States. product development. The cone, made out of plastic and rubber, Tõnis Liivamägi, who himself is also is a gadget that attaches to a digital a photographer, says that what camera with a magnet and helps to makes the product so special is the reduce camera shake during filming or quality optics used inside it. “It’s when the photographer’s hands start to a niche product that professional tire. However, this item is not just plastic: photographers really need,” he tells the cone contains high-quality optics us. His brother Tarmo adds that this which enable an undistorted view of the is precisely the reason why there is image being taken. The product very no need to create fantasy demand for quickly gained approval from professional the product or put vast resources into photographers and photography marketing and advertisements. “The enthusiasts. product makes a photographer’s and The success story of the cone created by operator’s work noticeably easier, so two brothers – Tõnis and Tarmo Liivamägi we don’t have to create the illusion – began almost instantly after its creation. that the product is needed. It is Already within the first month of activity, needed,” Tarmo says. the company sold 1000 of these aids The brothers had been selling their and quite soon it became evident to the cone for about a year when a Chinese brothers that they could not continue analogue version was developed. producing them as a sideline. By the “From the outside it looks like our end of the first year of production, over product, but the lenses used inside are 10 000 photographers all over the world the same as those made for reading were already using the LCDVF photo glasses,” the Liivamägis’ smirk.

69 “Their product descriptions are the same as ours as well, so basically they have stolen our product.” The Chinese are not a threat though, because LCDVF has registered the design in Europe and the Chinese analogue version is not allowed onto the market here. Tõnis says that even as a little kid he dreamed about being able to buy fake copies of his products from the Anne market in Tartu. “It happened sooner than I expected. I take it as a great compliment when my product is considered good enough to be copied,” he tells us. What is certain though is the fact that when a person has purchased an expensive camera they will not want to attach a cheap knock- off to it, if for nothing else other than for reasons of prestige. Furthermore, when you are working professionally and earn your livelihood with your camera, you cannot allow the cone to be badly attached or the optics to be of poor quality. Some 90 per cent of the cones produced by LCDVF are sold abroad, half of which are sold in the US. In total the cones are sold on 52 different export nations. Have they ever been tempted to outsource the production of the cones to some Asian factory? The Liivamägis admit that this would most likely reduce production costs, but on the other hand the brothers do not want to let their know-how “wander around” somewhere in Asia. They say, “We want to control the process ourselves, because this is the only way we can be sure of the quality of the product.”

A worldwide database of marine data, and it all started with a buoy

How can one avoid work interruptions and accidents on an offshore platform? How can one navigate their ship with minimal fuel consumption? Where should windmills be placed? The Marinexplore ocean database helps a lot of businesses and organisations make these decisions and frees them from the painstaking task of analysing and systematising data – it is all now done by computer software. This all means that in the future a ship will not sail straight to its destination following a map, but rather it will use the most favourable wind, wave and current conditions for its journey in order to save time and expensive fuel. But the idea to create a huge database covering all the seas and oceans in the world started with a single buoy. A few years ago Rainer Sternfeld and his companions built a buoy for the Baltic Sea, which measured the movements of phytoplankton. It was needed to develop a better understanding of how fish move about in the sea. Sternfeld says that the buoy was built without too much difficulty and a quick response from the client in the form of the data collected by the buoy was expected. But On the ocean the situation is even it turned out that the wait lasted for weeks and gathering the data was a very more critical because investments complicated process. “Soon thereafter we realised that everything concerning data are large and there is no room for is usually too difficult for people, and as these processes can be automatised, we error,” says Karpištšenko Up until had come upon a business idea,” Sternfeld tells us. now the work process has consisted So the company Marinexplore was born at the beginning of 2012. It deals with the of companies spending about 80 per integration and analysis of environmental data and the development of a common cent of their time working with data, platform for cooperation. A huge amount of data about seas and oceans is gathered trying to extract the information every day, every hour and every minute. For example, satellites and sensors they need and to present it in a form connected to ships, drill rigs and animals are tasked with collecting this information that would enable them to make and various computing centres take this data and create even more predictions and decisions. Many highly qualified data models based on it. The downfall people are occupied with data of this enormous amount of information preparation and the founders of is the fact that they are not compatible Marinexplore think that this is a and most data collectors do not waste of resources. Computers and cooperate with each other. “Sea data is software can do all of this work in an like isolated islands and every company instant and the specialists can focus and enterprise covers their own tiny on much more important tasks. section of the sea. But the ocean or the And the data processing speed is sea lives its life, it’s still a large complex constantly increasing, because with system, so the information should also each new set of data the process is be available in a single system” tells automated more and more. the co-founder of Marinexplore, Andre Marinexplore has put together an Karpištšenko. Sternfeld adds that the international team to create the goal of Marinexplore is to collect the data platform and it is cooperating most detailed data of the oceans and with various organisations all to offer valuable information used for over the world. The company has day-to-day decisions to companies and offices in Tallinn and California. The organisations working at seas. funders dream of a day when their Data gathered from various sources is data platform is the main input for combined on a single platform, where it making day-to-day decisions for is unified and made readily available to shipping and oil rigging businesses clients all over the world. “All companies all over the world, and a guiding tool who make decisions depending on the for an ever-increasing number of weather want the relevant data quickly. maritime robots.

74 NOW! – bringing Estonian M-Parking to the world

How do I park, and where do I park so that I don’t get a ticket? There are pro­bably many of us thinking that when in a strange city. Now! Innovations have developed mobile parking solutions which will free people from such an anxiety. What’s more: in the future you won’t even need to take out your phone – the parking space will “recognise” the car and park it. In Estonia, parking via is quite an old thing – it’s been going since 2000. However, there are several big countries like the US, China and Australia where it is considered a fresh and innovative solution and where they are taking their first steps towards the transition to M-parking. NOW!, an innovative software company from Tallinn, is one of the five major companies working in this field. The company has been working on parking software since 2000. Their pace quickened after winning a city parking solution contract in Belgium in 2006. Their competitors were global companies such as and IBM. NOW! Innovations, which was then totally unknown, won the contract out of the blue, beating their famous competitors with its functionality, speed and price. In three years the project was extended to many other cities in Belgium and later the service operator of parking payments was sold to a local telecom company. NOW! Innovations went forward with a new idea and today they are no longer a mere parking service provider. Instead, they now offer suitable software and payment solutions to service providers.­ Their latest success is Moscow; parking was totally free there until the summer of 2013; hence parking places were hard to find and the situation was chaotic. CEO Üllar Jaaksoo says that the Moscow project was large enough to put a stop to all other assignments for a while. “Elsewhere we were only another payment method complementing the existing ones, but in Moscow we had to provide the whole software solution for parking control. Indirectly we are teaching people that parking is a service which needs to be paid for. “People find it hard to get used to paying and they are constantly trying to trick the parking wardens. But Moscow is a huge city and it is developing one of the most modern parking payment solution in the world.

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It is being conducted very profes­ sionally, using the best ideas and techno­logies. It will definitely be a case study for many others and we are proud to be a key provider in this project.” In addition to Russia, NOW! Innovations has its software running in Skopje, the capital of Macedonia, in Kiev and in 45 cities in the United States. Plus, the only two national networks of quick charging stations for electric – in Estonia and the Netherlands – are also using payments systems developed by NOW! Innovations. Their developers might work in Tallinn, but the Estonian market is too small for NOW! Innovations. Some 98 per cent of their work is exported, and it’s all run through the Netherlands. This is because the Dutch have the world’s best network of mutual taxing agreements, which means good terms for software export. NOW! Innovations has been present in the US market for four years, mostly in cities on the eastern seaboard. Jaaksoo says that the American market is very small so far, as mobile parking is a novel thing for most Americans and the majority of consumers have yet to try it out. But the market potential is extremely high – which explains their continued presence.

A map company which grew out of Estonia into the wide world

In 1989, Regio published the first Estonian road map in half a century, thus creating an important innovation. Almost 25 years later, the company has become the biggest generator of mobile positioning services for mobile operators in the world. Regio’s partners have 350 million clients in their networks all over their world. Regio is very well known in Estonia and many Estonian drivers have the Regio roadmap in their cars, along with their warning triangle. It all began with cartography, and Regio has published hundreds of different maps over the years. All beautiful, easy-to-read and accurate. Teet Jagomägi, the current leader of Regio, has been dealing with maps since his childhood as his parents were geographers and little Teet used to accompany them on their field trips. In 1989, Jagomägi was still a student at the University of Tartu when he founded Regio. Back then independence had not yet been declared, and all the maps that were available were distorted for military purposes. But people in the geography department of the university were aware that the era of map censorship would soon be over. The between cartographers and software The company which started as a super-accurate military charts were used developers. spin-off of the University of Tartu to compile the first consumer-orientated Regio’s rapid development created a will not entirely stop its business in maps of Estonia. need for additional investments and Estonia, but it will only continue with Regio has been an innovator since the thus Jagomägi sold Regio to the Finnish products that are used outside of the start. Some examples: in 1994, all the company Done. Unfortunately, Done country as well as domestically. map-making in Regio was digitised – went bankrupt a year and a half later and In the future, Regio will focus on several years before the same was true Jagomägi’s only chance to save his ‘baby’ those courses of action where they in other Baltic states and in Finland; in was to purchase it back from the bank- have an edge and a greater potential 1997 Regio was the first to offer a map ruptcy estate. “I used up all my money, for making a profit, i.e. mainly on the server with maps of all the places in borrowed from friends and a bank and export of mobile and map solutions. Estonia. As time passed, Regio the map I bought Regio back,” Jagomägi says. Map solutions can be both paper company became more and more Regio During the past decade, Regio has grown and interactive. By mobile solu- the software company. In 1999, Ericsson so much that Estonia became too small tions they mean their experiences in was the first company to install devices for it. In 2013 a decision was made to mobile networks and infrastructure. which enabled mobile positioning in focus exclusively on foreign markets. This Regio’s aim is to export 75% of their the EMT mobile network in Estonia, means that Regio will no more partici- revenues. Should they succeed, the and Regio was asked to create the pate in the Estonian state procurement company name is likely to change: accompanying software for the Rescue competitions and will put an end to all they will become Reach-U, the brand Board – and quickly. This was one of the product developments that do not show name they use when operating on first assignments which demonstrated strong export potential. foreign markets. the synergy arising from the cooperation

80 Sarkop – a furniture company with a focus on hotels

Many hotels and public spaces in several countries around the Baltic Sea have been furnished with the help of a furniture company called Sarkop. For example, all the Radisson Blu hotels built or renovated in Finland since 2000 feature Sarkop products. Sarkop was founded in 1992 as an Estonian-Finnish joint venture. It produces non- standard furniture to order and for commercial clients only. Priit Kerma, the CEO and one of the owners of the company, says that 90% of sales come from Finland. “We would love to produce furniture for Estonia as well, but here the orders are scarce. The building boom has passed.” Exports have been important to this company since the start. In addition to Finland, Sweden is also a rising market for Sarkop. And why not go further still? Kerma says that in the furniture business, the distance between you and your clients is important, and differences in taste have to be considered as well. It is almost impossible to create a product that everybody will like. And in doing business with Finland it helps to have staff fluent in Finnish. “We know their rules and we know how to do business with them,” Kerma says. So far, the main markets have been the Scandinavian countries, but some projects have also been completed in Russia, Ukraine, Poland, Germany, France, Canada, Japan and Kuwait. The latter ordered wooden window ornaments for the Ministry of External Affairs. The majority of sales consist of hotel furnishings. Sarkop has had a hand in Radisson Blu, Sheraton, Swissotel, Park Inn, Holiday Inn, Scandic, Best Western, Sokos, Nobis and Cumulus hotels in Estonia, Finland, Sweden, Russia and Latvia. Sarkop is the first choice furniture provider for Finnish Radisson Blu hotels. And Sarkop’s products can be seen in several public spaces as well: Skype, Swedbank and Nordea Bank’s offices in Estonia, the Estonian Museum of Art, Monton and Baltman clothing stores, TeliaSonera and the Embassy of Finland in Estonia, as well as Helsinki Airport, the University of Helsinki, Finnair and Nokia

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Siemens Networks in Finland, and the Embassy of Finland in Germany. In Sweden, Sarkop has furnished the Operakällaren theatre, and Burger King in Norway. While it is very common in Estonian furniture business to work as a subcontractor, Sarkop aims to sell to the end client under the Sarkop brand. Sarkop’s production plant was built in 2007 to produce fur- niture. The plant was designed by Finnish architect Pekka Vapaavuori, who also designed KUMU, the Estonian Museum of Art. Kerma recalls that the building of the plant was urgent, but no Estonian architects were very inte­ rested in the work. “We had worked with Pekka before and he teased me – let’s make you a plant so grand that your excellent results are shown on the outside as well. And so it went. Pekka was delighted to design a factory for a change.” But what is the hardest currency in this business? Kerma says it’s all down to references. “If I can say in Sweden that I am making fur- niture for the Royal Opera restau- rant, I don’t have to say any more. It’s the most elitist restaurant in Scandinavia.”

Who’s not aware of Skype?

It is the evening of 29 August 2003, and a group of IT people opens a bottle of cheap sparkling in the Soviet- era campus in Tallinn. They have just uploaded an telephone app called Skype and have decided to treat themselves. The idea of it becoming one of the biggest success stories in Estonia is beyond their wildest dreams. Roll on ten years, and Skype has 280 million active users around the world and it has recently been bought by Microsoft. Skype has overpowered its competitor MSN as Microsoft decided to close it down after purchasing Skype. At first, Skype had audio calls only: a chat option was added later and 2005 saw the start of video calls. Just two months after its launch, Skype had a million registered users. But for years it was considered a suspicious thing, almost a virus by some . Skype’s principal development manager Andrus Järg says that being part of Microsoft has helped to finally shake off this malevolent image. After being bought by Microsoft, Skype’s pace of growth has quickened. Many companies around the world now feel encouraged to use Skype and it has become an everyday piece of communication software. In addition, Microsoft has provided Skype with some extra platforms: Xbox and Windows 8.1 are already Skype is undergoing a constant state integrated into Skype. Recently this has helped expand the number of Skype of revision – it supports 20 different users. platforms.” Earlier, Skype was more widely used by Europeans, but after a cooperation Skype has been a real nursery for start-up project with Oprah, the famous American TV host, Skype became popular in the companies, as many a successful IT US as well. Oprah used Skype to carry out video interviews in her shows. This entrepreneur have worked at Skype at way, tens of millions of Americans saw Skype as a reliable product. some point. Skype also encourages IT graduate students from Tallinn University of Technology to study hard: 14 students win a scholarship from Skype so that they can devote themselves to studies without having to work as waiters or guards. Does Skype have competitors? Well, yes and no. Google and Apple have their own communication platforms and there is a constant influx of minor companies. “Skype has the privilege of being there on so many platforms, it is ubiquitous,” Järg says. “It is also known as a brand, it stands together with Google, IBM, and so Skype brought video calls to masses. Video calls existed earlier, but the quality on.” was usually poor and they were not used too often. Today, Skype has saved the planet innumerable flight hours – before Skype you had to travel to see your Interesting fact business partner in person, whereas now you can close a deal without leaving • In 2005, eBay purchases Skype for your office. Skype has a 50% share of the video calls market, meaning that every USD 2.6 billion, making Skype’s six initial second video call in the world is made with Estonian-created software. Every developers multimillionaires overnight. third international call is made via Skype. There are more than 2 billion minutes In 2001, Microsoft buys Skype for USD 8.5 of Skype calls every day. billion. It’s their biggest takeover so far. Skype is now developed in several locations, not just Tallinn. It has seven development centres with approximately 1,000 developers. But what is there Where did Skype get its name? to develop? Isn’t the product complete? Andrus Järg just laughs – the work on • The name is an amalgamation of the Skype never ends, because while the platforms which run Skype are in constant words “sky” and “peer”. Initially it read development, Skype needs to be constantly re-written as well. “We must ensure “Skyper”, but the domains Skyper.com that calls made with different platforms are working well together and this work and Skyper.net were taken, so the name will never end,” he says. “Everything looks the same from the outside, but inside was cropped to “Skype”.

86 Technology that Java people love

“When I started, this idea felt like an acorn to me. But every acorn has an oak tree inside it,” says Yevgeny Kabanov, one of the founders and an executive at IT company Zeroturnaround (ZT). To him, the acorn was an idea of how to make the work of Java programmers faster and more effective. Today, his company has thousands of clients and his ‘oak’ has multiplied in size over the past few years. Kabanov believes that this rapid pace of growth will continue, as software is becoming increasingly more important – it’s everywhere, it’s in the web and in every kind of device that surround us. Software needs to be written more rapidly and with higher quality. And that’s what ZT productivity technology is helping to do. Kabanov says that a programmer can work 20 to 40% faster when using ZT development tools. “Using our solutions, the developer gets instant feedback on the reliability of the code. The shorter the feedback cycle, the quicker the work. Formerly a code writer had to wait three to four minutes for feedback, but now it happens instantly,” Kabanov explains. Over a year it all adds up to several weeks of working time, thus increasing productivity remarkably. Kabanov was working at Webmedia (currently Nortal) when he got his idea together with Toomas Römer in 2006. They were looking for ways to shorten the feedback cycle, and at one point Kabanov worked it out. “I instantly realised that my idea was ahead of its time that this business has money in it,” he says. He struck a deal with his employer: idea from Kabanov, support and financing from Nortal. And the enterprise had begun. Kabanov recalls that ZT got its first client just one week after starting the company and turnover had already reached millions of Estonian kroons in the first few years, but the real breakthrough came in 2010. After that, the company has expanded it size several times every year and they now have thousands of clients. The results are now counted in millions of dollars.

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When asked about competition, Kabanov shakes his head – there isn’t any. In the whole world. Therefore, the company has many renowned clients: Apple, eBay, Disney, HP, IBM, Lufthansa, Oracle; the list goes on. In 2011, Nortal sold its shares to Bain Capital Ventures, a US investment enterprise, which is now the owner of the company together with ZT’s . The company is young, but has almost 100 employees. Sales and marketing are done in the US, they also have a branch in Prague. All development and programming is done in Estonia, in ZT’s offices in Tallinn and Tartu. If we can call these environments offices at all – it is definitely not commonplace to see a swing hanging from the ceiling in an office or a ping pong table in a meeting room. Kabanov assures us that it is in constant use. As the flagship of the Java world, ZT is also committing to the future of the sector, organising the GeekOut conference in Tallinn every year. This get-together for programmers has become an important event in the Java community calendar, drawing the gurus of the field together with hundreds of participants from scores of countries.

A farm in an organic forest

Not only is the Taarapõllu Berry Farm surrounded by beautiful ancient nature; the forests here are the only ‘official’ organic forests in Europe. And the juices, jams, berry and berry crisps made in Taarapõllu are organic as well, with no unnecessary additions. Taarapõllu processes 100 metric tonnes of each year, producing 77 different products. A big part of the berries is grown locally, as it is quite complicated to find suitable quality berries at the market. Taarapõllu started dealing in berries around ten years ago. Edgar Kolts, the farm manager, had previously tried his hand at traditional farming activities, but berries seemed promising. At first the farm started producing juices, but sales were small. “We realised we need more products than just juice to make the breakthrough,” Kolts says. The farm started experimenting with berry flours and berry crisps. The latter contain nothing but whole berries and eco- sugar. In today’s world, where it is hard to find foodstuff without additives, this is considered an innovation. Taarapõllu started exporting in 2012. Brussels,” he says. They needed to prove that the forest has clean air and there are no main roads or industrial produc- tion plants nearby, and they had to map their picking areas. For not every berry picked in an ecological forest can be deemed ecological – they have to be picked from the mapped areas and the picker has to do the paperwork. Taarapõllu has contracts with approxi- mately 100 pickers who bring them chanterelles and berries from the eco- logical forests. They visited trade fairs, made valuable contacts and received good feedback Taarapõllu Farm has employs six or on their products. Now they have their own trade agent in France and they seven people, but the manager is confi- are negotiating with a company which delivers raw materials to Chanel, the dent that they have capacity to increase world-famous company. They are interested in using Taarapõllu berry their undertaking two-fold. “There are flours in their cosmetics. “The vice president of the company visited us and was only a few berry processers in Estonia, amazed by the pure and beautiful nature and forests we have here,” Kolts says. most of berries produced or picked here The French company has a lot of interest in the products made in the Estonian are being exported as frozen raw mate- periphery, to the extent that they also want to buy the condensate water which rial. We think it is worth giving them forms during berry production. “This way no taste or aroma is wasted,” Kolts value here,” Kolts says. chuckles. But he is not going to sell everything to Chanel to make ointments: the plan is to market their products in French grocery stores as well. Taarapõllu How are the popular berry crisps made? products are already on sale in Finland, Sweden and Russia. Kolts assures us that Whole berries are crushed in a specially his ecological brand is a great benefit, as people everywhere are looking for pure designed mill. Eco-sugar is added and and additive-free food. “They want real jam, not a potion with a few berries, the paste is mechanically processed in thickened with pectin,” he says. ‘Real jam’ means slow cooking and pure eco- several phases. Drying takes places in sugar. This way, a 300 gram jam jar contains 400 grams of berries. a special dryer and takes between 12 Some years ago, Kolts started a project unheard of in Estonia and indeed the and 24 hours. The is concentrated whole of Europe. Thanks to his efforts, a big part of the state forests in Estonia berry with a little sugar. The berry crisps have been declared ‘ecological forests’. They are situated in south Estonia and are loved by children and parents alike, Europe has no other similarly verified forests, as far as Kolts knows. “It was a as they are at least as tasty as candy, and great effort and the paperwork took a long time, everything had to go through much healthier than other sweets.

92 Estonian scientists fighting cancer

For half of all cancer types, there is currently no specific treatment available anywhere in the world. This makes cancer research a very relevant topic everywhere, including Estonia. The Vähiuuringute Tehnoloogia Arenduskeskus (VTAK – Competence Centre for Cancer Research) brings together top specialists in the area, and the first anti-cancer drug produced in Estonia, Virexxa, is about to be released. The centre’s partners include , and biotechnology companies in Estonia, the US, Sweden and Latvia. In total there are about 100 people working on cancer research at VTAK, and there are 14 active development projects. The areas of work can be broadly divided into two: the development of new generation cancer drugs, and the development of new cancer diagnostics methods. The best known and furthest developed project is the drug candidate called Virexxa. It is a drug designed for fighting stage four endometrial cancer. “So far no specific treatment has existed for this type of cancer, so it is important for us to make it available as soon as possible,” says Riina Ehin, head of the VTAK board. The drug will be produced in Tallinn and marketed both in the States and Europe. It is a very important step for the Estonian biotechnology sector, because no other similar medicine has ever been produced here before. Advanced endometrial cancer is known as an orphan disease, which means the disease is quite rarely found. This is the reason why large corporations usually have no interest in developing drugs for such diseases. This, however, does not mean the drug does not have a market. The whole market share of orphan diseases is predicted to be USD 127 billion in 2018, which is almost 16 per cent of the whole prescription drug market. It can be assumed that fierce patent wars are about to break out in this market segment. The cancer drug candidate Virexxa has already passed clinical trials and if everything goes to plan, production could start in 2015. The drug will, however, never be available in pharmacies – it will only be administered in hospitals under controlled conditions. But Virexxa is not the only project in the works at VTAK. Numerous other projects are in progress in the company’s laboratories. If they are successfully completed, people who suffer from cancer will be provided novel treatments which are unavailable today. For example, the company has developed 28 oncological and molecular genetics tests, which help doctors evaluate a person’s individual risk of developing a type of cancer. It is important, because when we know that a person carries a gene with a certain type of cancer, it can be found more quickly should the person develop the disease – and the prognosis is better. “These tests are combined with consultations and it must be emphasised that finding a certain gene does not automatically mean the person has cancer – it merely means there is a greater risk of developing it,” explains Ehin. What’s more, these tests received a special recognition from the Finnish president in 2010 for being the most innovative product of the year. Several VTAK projects deal with research into skin cancer or melanoma. The frequency of this cancer being diagnosed is increasing, because people are much more mobile and they travel to warmer climates a lot – but the skin of Nordic people is not suited to much . In cooperation with scientists from IcoSagen and doctors from Põhja-Eesti Regionaalhaigla (North-Estonian Regional Hospital) they are trying to figure out why in some cases a person’s immune system is able to fight the melanoma and in other cases the condition worsens rapidly, often with tragic consequences.

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The answer will give them a chance to develop a drug based on the antibodies of healthy people. The treatment of melanoma is further complicated by the fact that the cancerous cell is extremely similar to natural melanocytes found in the human body, the cells which form when we sunbathe. This means our immune system does not recognise the cancerous cells and they can spread uninterrupted all over the body. VTAK is running a project for developing a for preventing melanoma. Ehin hopes that at one point the vaccine will reach the drug market as a drug candidate. Regarding the choice of projects, Ehin says that a lot of information is given to them by the doctors at Põhja- Eesti Regionaalhaigla, who highlight the most pressing issues. “We are working together with international pharmaceutical companies and we try to target our work at those areas that are in desperate need of attention,” she says. “There is no point in developing a cancer drug for just the Estonian market, the focus is on the global market. Our wish is that the fruits of our labour will improve the overall quality of cancer treatment.” Issued by: Economic History Museum Texts: Kristina Traks Photos: Meeli Küttim Historical photos: Estonian Historical Archives, Estonian Film Archives, State Archives, Tallinn City Archives, Economic History Museum Editor: Gea Otsa Translator: Tiina Randus, OÜ Translating Dragon Proofreading: Nick Moon Designer: Sirje Tooma, OÜ Oomen

Acknowledgements to: Mr Leonid Gordejev, Mr Kalev Vapper, Ministry of Economic Affairs and Communications

© Economic History Museum. 2014 ISBN 978-9949-9284-4-6

Printed in: Tallinna Raamatutrükikoda