Germany and other Central European countries are pioneers in "clustering" their chemical production sites, but the Scandinavians already showed their will to catch up. In Finland the Kokkola Industrial Park (KIP) is the largest centralization of inorganic chemistry in the Nordic countries. Infrastructure and geographical location offer various advantages for investors and chemical manufacturers - Kokkola's biggest plus.

For over 100 years Europe has been world leader in manufacturing and exporting chemicals, but during the last decade a shift is noticeable. Asia is attracting new investors with double-digit growth rates and is about to claim the throne of worldwide chemical manufacturing. Even though Asian production sites are becoming more and more established, there are still some advantages for the European chemical sector. With a highly skilled labor force, many decades of experience and state-of-the-art production sites Europe managed to defend its position among the most successful chemical-producing regions in the world. Especially modern production plants, which are often centered in clusters, strengthen Europe's position.

Kokkola Industrial Park - Scandinavia's figurehead

Approximately 20 companies run plants in Kokkola, another ten support them for key activities. The reasons for their investments are manifold and range from logistical advantages to legislation issues. "In Finland, research results derived from joint efforts with research organisations will become the property of the company. For this reason, we have centralized a significant proportion of our R&D operations in Kokkola," says Jöran Sopo, Managing Director OMG Kokkola Chemicals. With 375 employees the OM Group is the second biggest employer in the Industrial Park, manufacturing mainly cobalt products. In total 2000 employees are based in Kokkola. Research and development indeed plays a very important role for the Kokkola site. The new € 500.000 chemical test plant, Chemplant, offers a wide field of functions from the preparation of solid raw materials to gas cleaning and various extractions of solid and liquid materials. Companies can also link their own research departments to the technology center KETEK, which is especially designed as a R&D environment, to work on polymer applications, chemical processes or laser and material technology.

Alongside their focus on R&D facilities, the Kokkola Industrial Park benefits from its long tradition in chemical manufacturing. The chemical industry is a reputable employer in the region and the supply of committed labor is good. Due to this long tradition, the given infrastructure is well developed and meets the requirements of a modern and globally orientated production site. The airport is just 15 minutes away from the plant, offering the opportunity to ship chemicals flexible to all parts in the world. Not as flexible as the air route, but much more cost-efficient is Kokkola's outstanding railway connection. In goods traffic, the same track gauge is used all the way to China, which makes delivery to the Russian and Asian market possible.

Kokkola's harbor can be seen as a link in trade between east and west. It offers quick connections to Russia, and from there to the rest of the world. Cargo to be shipped to Russia is loaded in the harbor directly into railway carriages which will cross the border between Russia and Finland ten hours later. Several large-scale international industrial establishments have operations in the immediate vicinity of the harbor. But it is not only the advantageous geographical location that makes Kokkola harbor an important transfer site. The port is home to the only All Weather Terminal (AWT) in the Nordic countries, which is at the same time the largest in Europe. In the terminal, ships can be loaded and unloaded in a covered space, which means that the cargo will never be left to the mercy of weather.

The inorganic chemical industry sees the benefits of Kokkola's Industrial Park and started investing a couple of years ago. "In Kokkola things move very fast. The speed at which we had our new plant up and running was amazing. The cooperation between Kosek and Woikowski and the city of Kokkola was seamless," says Clas Palmberg, Managing Director Oy Woikoski AB, Finland's oldest specialized gas producer and distributor. The internal connections between the companies at KIP are interlaced in a way that leads to a cost efficient value chain. The broad product portfolio, ranging from cobalt and zinc products to calcium chloride, limestone or ammonia, speaks a clear language and illustrates the optimized value chain.

Top 10 Products

• Sulphuric acid
• Calcium chloride
• Hydrochloric acid
• Potassium sulphate
• Phosphoric acid
• Limestone
• Ammonia
• Potassium salt
• Cobalt products
• Zinc

The European Chemicals Agency is also situated in Finland and, as part of the EU's Subsidy Area 2, there is guaranteed potential for financial support. Another important partner for Kokkola Industrial Park is the European Chemical Site Promotion Platform (ECSPP). The organization was founded in 2005 and since then supports chemical clusters all over Europe. Currently the ecspp operates in ten countries, with 30 members and 70 chemical sites. The Kokkola site is among the ten biggest clusters in Europe, covering an area of 600 ha. The only chemical sites with a larger scale are either located in Germany or in the Netherlands and range from 650 to 2000 ha.

Outlook

In the future it will be crucial for the European chemical Industry to focus on clusters like Kokkola Industrial Park. In terms of costs the Asian competitors are nearly unbeatable and the one big thing that keeps European companies competitive is their level of connectivity. The chemical production in Europe is predominantly organized in clusters and investments in this area need to be intensified to face the challenges of this changing market.