The Government decided to support Kymenlaakso in a situation of structural change
10.11.2023 | Kymenlaakso has been granted a total of €6 million in funding for a sudden restructuring situation. Keys to new growth in the region will be sought in particular in the battery industry and the food sector. The total development package for Kymenlaakso amounts to around €9 million.
Kymenlaakso’s long-lasting restructuring process will culminate in the relocation, transfer and closure of several large companies during 2023. In June, Stora Enso decided to close its Sunila pulp mill and will also close the second paper machine at its Anjala mill. Job losses have also occurred in the food industry.
In Kymenlaakso, the regional economy is also affected by Russia’s war of aggression in Ukraine. The effects of the war and the closure of the Russian border are significant in a number of sectors, particularly in the forest industry, logistics and tourism.
Workers are being supported in this situation by change management services. To speed up the re-employment of those who have lost their jobs, the region also needs a wide range of employment and business services. The Ministry of Employment and the Economy will reinforce employment and business services with €1 million.
New growth from the battery industry and food sector
Kymenlaakso has development potential, which is the focus of the new AKKE funding to support sustainable growth and vitality in the region.
Of this funding, €3.8 million is earmarked for the battery industry in Kotka-Hamina. The aim is to create a major industrial hub for the international battery industry. The battery industry in the region is also funded by Business Finland.
EUR 2.2 million will be allocated to the development of the food sector in the Kouvola region, with a particular focus on supporting business growth through RDI, cooperation with universities and internationalisation.
“If implemented, these projects would have a significant regional economic and employment impact. There are signs of new beginnings, but they will not take off on their own. A lot of work and cooperation with business is needed, across administrative and regional borders”, said Wille Rydman, Minister of Economic Affairs.
EU funding from regional and structural policy funds
In addition to the LFSG funding, funding from the European Regional Development Fund (ERDF), the European Social Fund (ESF+) and the Just Transition Fund (JTF) is readily available in Kymenlaakso. These funds can support various development projects and create new business opportunities and jobs.
The Ministry of Employment and the Economy is preparing the transfer of the Kotka-Hamina sub-regional unit to a higher aid I region in the mid-term review of the regional aid map. This would mean that higher aid could be granted for business investment. If implemented, the change will also require the approval of the EU Commission.
The ministry is also preparing a revision of the funding distribution of the EU’s regional and structural policy programme to increase the ERDF funding for Kymenlaakso by 20% between 2024 and 2027, for a total increase of €2.2 million.
Supporting Kymenlaakso is part of strengthening the vitality of eastern Finland
Supporting the restructuring situation in Kymenlaakso is part of a broader effort to strengthen the vitality of eastern Finland.
“The Ministry of Economic Affairs and Employment is currently preparing the programming for eastern Finland. This will continue and concretise the vision work for eastern Finland that was carried out in the summer of 2022. A particular focus in the future vision work for eastern Finland will be on supporting regional growth and investment,” says Minister Rydman.
Eastern Finland’s programming will also be influenced by the government’s industrial policy strategy, which is currently being prepared. The aim is to attract investment through a stable and competitive business environment.
Source: Government communications
Caption: In recent months, there have been several bankruptcies and closures of major production plants in Kymenlaakso.
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