VKG pushes bioproducts plant investment decision to 2028

5 October 2026 · Estonia

Estonian industrial group Viru Keemia Grupp has pushed the investment decision for its planned bioproducts complex in Lüganuse to the first quarter of 2028 as it continues to search for an investor and a cost structure capable of competing on global markets.

VKG chairman Ahti Asmann told ERR that if an investor cannot be secured by then, the company will reassess whether to continue with the project. If it proceeds, the plant is now expected to begin operations in 2030, four years later than envisaged when the project was first announced in 2021.

VKG currently puts the project cost at around €1.2 billion, 50% above the original €800 million estimate announced in 2021. The figure should be treated as a current project estimate rather than a linear increase: in December 2025, VKG itself described the planned mill as a €1.3 billion project.

Around €2 million has so far been invested in development work, according to Asmann. VKG has also relinquished a ten-year timber supply agreement with Estonia’s state forest manager RMK.

The planned complex would process lower-value wood into pulp, dissolving pulp and biochemicals. VKG now estimates that the plant could also generate around 800 GWh of electricity annually as a by-product.

The central issue is no longer only construction timing. VKG is still trying to find a financing and investment structure that would allow a large European greenfield industrial project to compete internationally.

Sources: ERR; Viru Keemia Grupp