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Kemi-Tornio area gets €4.2m recovery package to cope with Veitsiluoto mill closures

Funding will be targeted at development projects to create new jobs in the region, as well as investments in small and medium-sized companies.

Kuvassa näkyy etualalla merta ja puita, taustalla on Veitsiluodon tehdas savupiippuineen.
Stora Enso will cut 550 jobs due to the closure of the Veitsiluoto pulp and paper mill and sheeting plant. Image: Antti Ullakko / Yle

The government has authorised the Northern Ostrobothnia Centre for Economic Development, Transport and the Environment (ELY) to grant 4.2 million euros in business support to deal with sudden economic upheaval in the Kemi-Tornio region of northwestern Finland.

The funding, announced on Wednesday, is intended to soften the blow of the closure of Stora Enso's Veitsiluoto paper mill and sheeting plant in Kemi.

Billed as the northernmost paper mill in the world, it is among the region's biggest employers. The first sawmill on the island site opened in 1922.

In April 2021, the Finnish-Swedish forest products giant said it would close down pulp and paper production at its Veitsiluoto site. Its three paper machines, chemical pulp and groundwood production, and the sheeting plant are to be closed permanently during the third quarter of this year. It also plans to close a mill in Sweden.

Last week Stora Enso confirmed that 550 people would lose their jobs as a result of the Veitsiluoto shutdown.

Funding will be targeted in particular at small and medium-sized enterprise (SME) investment and development projects aimed at generating new jobs in the region.

Since the announcement of the plant's closure in April, various measures have been launched to support workers and livelihoods amid the sudden restructuring.

More support promised

The total funding for the Kemi-Tornio region will be announced next Tuesday, when the government is to decide on more regional development money for the area.

"The aim of the additional funding granted by the government is to create new business and jobs in the region. The support will be directed, among other things, to support the renewal of companies, innovations and know-how, as well as to improve capabilities related to digitalisation and the utilisation of technology," Minister of Economic Affairs Mika Lintilä (Cen) said in a press release.

In April, the Ministry of Employment and the Economy granted the Lapland ELY Centre 2.3 million euros to manage the employment situation in Kemi-Tornio. According to Minister of Employment Tuula Haatainen (SDP), additional resources will be considered if necessary.

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