The Puhos bio-wood terminal in Kitee attracts competitive green industries with its excellent logistics. There are already eager investors in line: from food production for further processing and export to eco-friendly charred wood products and materials made from the sidestreams of sawmill and planing industries. Responsible building materials ranging from acoustic panels and, topping it all off, a ski factory chosen by NATO as its partner, contribute to the optimism for the future in Kitee.It was a strategic move when Karhu Ski Factory was relocated from Askola to Kitee in 1972, justified by the proximity to raw materials, mainly birch at that time, abundant in Central Karelia.
- In the 1974 Falun World Championships, Sweden's Thomas Magnusson won gold on plastic skis, marking a revolutionary moment for the entire ski industry, provides Harri Kirvesniemi, CEO of KSF Sport, the ski factory in Kitee.
With over 40 years of experience, including the last 10 as CEO, Kirvesniemi reflects on the unexpected NATO partnership. In 2017, when approached by the Sodankylä Jaeger Brigade, his team began developing forest skis for the Finnish Defense Forces.
After three years of hard work, Kitee awaited the Finnish Defense Forces' order, which never came. Instead, the news arrived that their skis were so exceptional that they should be submitted to NATO's tender.
- At first, I was worried - NATO tender is open to all. Will our work go to waste?, Kirvesniemi recalls.
The interaction with NATO's procurement organization NSPA (NATO Support and Procurement Agency) began. The outcome was eagerly anticipated both at the ski factory and in Kitee City Hall.
- In December 2022, an email arrived from NATO's office in Luxembourg. Our ski had been selected as the NATO ski. Shortly after that, we received an order from the Defense Forces. And soon enough, phones started ringing, and people began inquiring about jobs.
With the ski order, we recruited around ten new employees for production. The workforce in the facility averages about 20 people. In addition to NATO skis, Kitee manufactures world-class racing and recreational skis. A civilian version of the NATO skis has also been produced.
So far, the majority of the 8,200 pairs of skis ordered by the Defense Forces are already completed. Additional orders are expected from domestic garrisons, NATO countries, and partner nations. The CEO remains silent about the quantities mentioned in the NATO agreement.
- NATO needs a lot of everything, from footwear to helicopters. Our strength lay in specialization and in-house product development, Harri Kirvesniemi smiles.
Facing structural changes
Kitee has a long history in mechanical wood processing, but the industry has been shaken by structural changes. In the early 2000s, Havukainen Oy, once a subcontractor for Ikea, ceased operations. At its peak, the company employed well over 100 people. In 2011, the chipboard company Puhos Board Oy declared bankruptcy, leaving nearly 100 people unemployed. In 2019, Stora Enso's Kitee sawmill made headlines due to job losses affecting 121 professionals in sawmill operations, maintenance, logistics, and support services.
- Many industrial jobs were lost. Some found work in other local industries, but most had to commute to neighboring municipalities and even farther. Now, with new industry emerging in Kitee, professionals are returning, says Risto Hiltunen, Kitee's Business Development Manager.
Hiltunen, in his current role and as the former head of the KETI economic development company, has been closely connected to the pulse of local businesses. In a city of around 10,000 residents, people know each other, and support is readily available.
- Business is conducted within companies, and in that core, public authorities cannot intervene. However, where possible, assistance is provided, and things are facilitated: workforce availability and training, business premises and industrial plots, comprehensive business development services, and networks. For the city, companies are a prerequisite for vitality, and that's why investments are made in them. There is no hesitation to ask for help and reach out to us.
Green Future
Wood, plastic, metal, chemistry, sustenance for body and soul – Kitee has always provided a fertile ground, premises and plots, and talents for good and innovative ideas.
Kitee gained international attention through the Nightwish band. In early February, Kiteen Mato ja Multa Oy made national headlines. The company, specializing in reed-based bedding and growing substrates to reduce carbon footprint, received the Save the Baltic Sea Award.
Recently, Kitee's Mayor Pekka Hirvonen, along with MTK's local executive director, visited the Ministry of Agriculture and Forestry to discuss matters related to the further processing and export of food. Kitee's input was considered, given that Central Karelia has already become a leading region for berry production.
In 2022, Kitee celebrated the decision of Nordic Freeze Dry Oy to establish a freeze-drying facility in Puhos. Nordic Freeze is Finland's first industrial-scale freeze-drying facility. The company plans to locate in the Puhos Hall, which the city is renovating to suit food processing needs. Nordic Freeze's plan is to freeze-dry domestic berries and natural products and to develop food and other natural products for export markets. Nordic Freeze is laying the foundation for its future on new technology.
Innovative initiatives also include Hiil Oy, which has announced its plan to launch industrial-scale recycling and charring of waste wood in Puhos by 2026.
Hiil has developed a method where the surface of the wood is treated through charring. Charring protects the wood from decay and combustion. What's new in the process is that charring is done using wood gas instead of liquid or natural gas, obtained from demolition waste. This way, even lumber that is unsuitable for further processing can be utilized in the process. The production method is more energy-efficient than other charring methods.
- Energy-intensive companies insist that both raw materials and energy must become greener. It's a significant competitive factor in European markets where the demand for increasingly sustainable solutions is high. Wind power would be great, but finding other solutions for green electricity is crucial, as Mayor Hirvonen summarizes.
At the end of last year, Jyväskylä-based Aisti Corporation announced the start of industrial production of acoustic panels in Puhos. These building materials, made from natural fibers without plastic or synthetic binders, represent a robust commitment to a greener future.
- Energy-intensive companies insist that both raw materials and energy must become greener. It's a significant competitive factor in European markets. Markets demand increasingly greener solutions. Wind power would be great, but finding other solutions for green electricity is crucial, summarizes Mayor Hirvonen.
At the end of last year, Jyväskylä-based Aisti Corporation announced the start of industrial production of acoustic panels in Puhos. These building materials, made from natural fibers without plastic or synthetic binders, represent a strong green future.
Broader shoulders for support
The decision to dissolve the Central Karelia Development Company KETI was made in 2022; a need for more substantial support in business development was identified, and this support was provided by Business Joensuu Oy.
- Over the decades, the demands for business counseling and development have grown. In addition to basic counseling, specific expertise and knowledge, coaching for growth, and support for our important Invest In work are needed. Towards the end, KETI had just under ten business experts. Business Joensuu now has around forty of them, reflects Risto Hiltunen.
Kitee has been working with Business Joensuu for just over a year, achieving significant results in that time.
- Over the past year, businesses in our region utilized the expertise of 35 professionals from Business Joensuu. Business Joensuu was involved in preparing investment support applications for companies in the Kitee area, totaling approximately €20 million. Companies have also received assistance in digital matters, growth coaching, and recruitment. The feedback from businesses in the area has been positive, as stated by Mayor Pekka Hirvonen.
€5.5 million for Puhos infrastructure
At the end of February, excellent news was heard at the meeting of the cooperation group of the North Karelia Regional Council. The cooperation group endorsed the application of the City of Kitee for JTF investment funding for the construction of a bio-wood terminal in the Puhos industrial area. The Just Transition Fund is the European Union's fund for a fair transition, aimed at promoting green development while securing regional economies. The financing decision for the bio-wood terminal is a significant matter for Kitee and the entire eastern Finland.
- The total cost estimate for the Puhos project is 5.5 million euros – making it a highly significant infrastructure project on a national scale in Finland. The project involves constructing a bio-terminal area for the processing, logistics, and storage of wood and bio-based raw materials, refurbishing the leading roads and lighting in the area, and installing a track to the Puhos harbor. The track enables the integration of inland and waterway transportation, summarizes Kari Siponen, Technical Manager of Kitee.
To achieve success in the logistics setup, the revision of the previous decision by the Finnish Transport Infrastructure Agency regarding the Syrjäsalmi railway bridge must also be taken into account. Thanks to the new railway alignment, there will only be a disruption of a few weeks in VR's freight and passenger traffic. Originally, the Finnish Transport Infrastructure Agency estimated the disruption to last for several months.
- The significance of the Karelian Railway is extremely important for freight traffic and also for over half a million annual passengers in passenger traffic. The new Syrjäsalmi bridge ensures our accessibility, outlines Siponen.
Further information:
Harri Kirvesniemi, CEO KSF Sport Oy
+358 207 342 830, info@ksfsport.fi
Pekka Hirvonen, Mayor of City of Kitee
+358 40 105 1001, pekka.hirvonen@kitee.fi
Risto Hiltunen, Business Development Manager of City of Kitee
+358 50 303 1313, risto.hiltunen@kitee.fi
Kari Siponen, Technical Manager of City of Kitee
+358 40 105 1201, kari.siponen@kitee.fi
Katariina Eskelinen, Business Coach for municipal responsibility in Kitee
Business Joensuu, +358 40 140 7505, katariina.eskelinen@businessjoensuu.fi
Text: Sirkka-Liisa Aaltonen / Viestintä Ässä Oy
Photos: Jarno Artika
