1. Metal Industry In Lääne-Viru County Lääne-Viru Development Center 2013 Investor consultant

2. Sustainable competitiveness in business services Estonia offers distinctive opportunities for business service centres for both in-house and outsourced solutions. Estonia is the emerging Nordic location and an excellent gateway between Northern, Western and Eastern Europe and Russia. Estonia offers sustainable, high-quality, competitive costs and low risk solutions for BPO, IT and financial services shared service centres, customer and technical support centres. Enterprise Estonia is here to help you achieve and maintain these competitive advantages.

3. Why Estonia?  Quality technical skills  Foreign language skills  Competitive costs and taxes  Cutting-edge ICT infrastructure  Strategic location and global vision  Easy to do business  Low risk: economic & political stability  Room for growth: a sustainable solution  Supporting your investment

4. Why should you set up business in Lääne-Viru County ? Closeness to important markets: the largest Estonian market in Tallinn and Harju County, the largest Finnish market in Helsinki region, one of the largest Russian markets in St. Petersburg region; Closeness to important business areas: the largest Estonian business areas in Tallinn, Harju County and Ida-Viru County; Helsinki region ; Closeness to the largest sources of Estonian labour force: Tallinn, Harju County and Ida-Viru County ; A good transport network ; Existing business areas that offer various services (including electricity and gas supply); Various existing companies: building materials, wood processing, food industry, metal and engineering industry, electronic industry; A good living environment with a normal social infrastructure and recreation opportunities

5. Business enviroment in Estonia Estonia's economy offers key opportunities for companies in a number of sectors including ICT, electronics, machinery and metalworking, wood processing, logistics/transport and food. The R&D elements of these activities are supported by the country's 10 universities and 25 higher education colleges, which collectively provide a source of graduates, often fluent in English, Swedish, Russian, Finnish and German.ICTelectronicsmachinery and metalworking wood processinglogistics/transportfood Estonia has been ranked 16th in the Index of Economic Freedom (2012, Wall Street Journal/The Heritage Foundation), 24th in the Ease of Doing Business Report (2012, World Bank), and 33th in the Global Competitiveness Report (2012, World Economic Forum). Estonia has some of the highest credit ratings in the region (Fitch IBCA, Standard & Poor's, Moody's).

6. Business enviroment in Estonia Estonia is a member of euro area as of January 1, 2011. 0% corporate income tax is imposed on all reinvested earnings in Estonia. The Estonian cost level is still significantly lower than that of neighboring Scandinavian countries. In Estonia, all capital is treated equally, foreign or domestic. Estonia is a member of the International Center for the Settlement of Investment Disputes, the Multilateral Investment Guarantee Agency, and the New York Convention. Estonia is the leading country in Central and Eastern Europe in terms of attracting foreign direct investments. Estonia is one of the leading countries in the world in creating and implementing e-government solutions and cyber security

7. Location Situated in northern Estonia. Bounded by Ida-Viru County on the east, south and west of Jõgeva, Järva and Harju counties. Bounded on the north by Gulf of Finland Fifth most populated county in Estonia, with the population of 66 701 people Territory is 3609 sq km and we are the third largest county in Estonia. Divided into 15 municipalities (13 rural municipalities and 2 towns). Rural population is 55% The largest municipality is town Rakvere with 16 570 inhabitants, being the county center as well

8. Connections

9. Transport and logistics Lääne-Viru County has a very favourable logistic location by the sea, between Tallinn on one side and Ida-Viru County on the other side. Rail link with St.Petersburg and Pskov (Russia) and Riga (the Baltic States, Belarus, the Ukraine) Port of Kunda – located 26 kilometres from Rakvere Close to Tallinn-Narva highway (Rakvere – Tallinn 98 km, Rakvere – Narva 120 km) Rakvere-Väike-Maarja- Vägeva highway (Rakvere – Tartu 135 km) Sõmeru- Rakvere –Pärnu highway (Rakvere – Pärnu 178 km) International road transport companies: transport operations all over Europe as well as in Russia and in the Ukraine Storage terminals for chemical and oil products Airport in Tallinn – 98 km

10. Power network Electric power reaches Estonian households and companies with the help of Eesti Energia Jaotusvõrk OÜ which provides services for 87,7 % of Estonian electricity consumers. Lääne-Viru County is supplied by a network of power lines with a total length of 5235 kilometres, 4520 kilometres of it is made up by overhead transmission lines. In the financial year 2010, over 2.58 million € was invested by the distribution network in the renovation of the power network of Lääne-Viru County. Nearly half of that sum was spent on the installation of underground cable lines. In 2011 the focus was on replacing overhead transmission lines with underground cable lines, the company replaced 80 km of lines with underground cable lines. The distribution company invested about 2.88 million € in 2011 in Lääne-Viru County for the construction and renovation of networks. In addition, maintenance and repair work necessary for sustaining the operating reliability is carried out. www.energia.ee

11. Regional workforce skills and costs Estonia has relatively low taxes and a simple tax system. Currently there is no corporation tax ( tax is not imposed on reinvested profit) Income tax on dividends forms 21/79 of the dividends received. Value added tax is 20 per cent with just a few exceptions. The average labor cost per hour worked in metal industry was 8,18 eur (www.stat.ee, year 2008)www.stat.ee Educational level in Lääne-Viru County Statistics 2011 (people, thousands) Primary education or lower 5.2 Secondary, post secondary and pre tertiary education17.3 Tertiary education9.2 Education after secondary education2.7 Higher education, mater`s doctoral degr ee 5.5

12. Unemployed metal industry skilled workers at Lääne-Viru County 30.11.2012 (www.tootukassa.ee )www.tootukassa.ee Product painter 1 Electrical welder 2 Welder 14 Tinman 2 Car tinman 2 Metal construction producer 1 Locksmith 9 Tool locksmith 1 Machine tool operator 3 Metal cutting machine tool operator 1 Metal turner 3 Metal decorator 2 TOTAL 41

13. Taxes and duties Rate of tax on income 21%. Additional tax-exemption income when accidents at work or occupational disease benefit is 64 euros monthly Social security tax is 33%. The minimum obligation base monthly rate for social security tax is 290,00 euros, which means that the minimum obligation social security tax is 95,70 euros monthly. Unemployment tax for the worker is 2%, for the employer it is 1%.

14. Taxes and duties The company must be registered as a VAT payer when from the beginning of the calendar year, turnover is in excess of 16,000 euros, on a voluntary basis can be registered also earlier. When the company is registered VAT payer in Estonia and starts to use the imported (equipment, goods) for goods under VAT too, it can deduct VAT paid at customs on these good from its taxable supplies VAT. Each month for the 20 th is needed to present a tax return when registered VAT payer, VAT return form KMD. VAT payer can read from the registration requirement of § 19 VAT law (law is also available in English). When the company will make special payments or other distributions paid in Estonia, and the company already is registered in Estonia, then you may re-turn to the specific tax questions also directly at jurisik@emta.ee.

15. Labor costs The average wages in Estonia in 2011 was EUR 839. The monthly minimum wage for full-time work is EUR 290. Approximately three to four times lower labour costs, compared to Scandinavian countries, in miscellaneous business activities sectors. More than three times lower labour costs in the computer related services sector compared to the EU27 average. Accountant – 15 Credit control officer – 4 Head of finance and administration – 1 Junior accountant – 28 Senior accountant – 9 Customer service manager – 5 Computer operator – 2 Data entry clerk – 9 Office services specialist – 2 Secretary – 4 Source: fDiBenchmark.com, spring 2012

16. Metal industry in Lääne-Viru County Long history and traditions Developing sector, reproducing workforce itself The most suitable areas for production: Rakvere, Sõmeru, Kadrina, Tamsalu, Tapa, Vihula 35 companies, 215 employees Revenue 13159993 Export 2335024 Profit 888585

17. Industrial areas in the region Rakvere Industrial Area Location in the centre of county Reconstructed infrastructure Good logistical position of the highway (Tallinn-Narva), railroad and port of Kunda Good labor force potential in urban and in near rural municipalities Perspective of bring one of railway line to industrial park Perspective of developing airport for serving enterprises Existing neighborhood of the Estonian energy and natural gas distribution network Possibility of developing the industrial park area existing residential areas and residential land to allow the relocation of labor The business environment in addition to a quality living environment Opportunity to provide affordable and cheaper production costs, while logistically well-located plots (eg Harju county companies)

18. Kadrina Industrial Area Kadrina industrial village is situated on 21,5 ha in the northern and north-eastern part of Kadrina. Operating enterprises own 7 registered immovables with the total area of 16,8 ha, two plots are owned by the state. The territory has a good access roads and streets. Location: Kadrina municipality Technical networks: Free electrical capacity of 1200 kW, heating 70 MW/ daily, water 150 m³/daily, sewerage-waste water treatment facility, capacity 400 cupic metres per 24 hours Desired use: Metal industry, building material industry, production must be environmentally Distances: Tapa railway junction (Russia, Latvia) 15 km Port of Kunda 35 km Port of Loksa 60km Tallin-Narva highway and Pärnu- Rakvere-Sõmeru highway – Tallinn 90 km, Rakvere town 15 km

19. Tapa Industrial Area The industrial park is located in the south- western part of Tapa. The area has access to a railway line owned by the town and a good entrance road. A water and sewerage network was built on the territory of the industrial park. A new high voltage line and two new substations supply the area with electricity. Total area: 50 ha Distances: Tallinn 100 km, 70 km by railway Rakvere 30 km, Technical networks: Electricity 2*1000 KVA,substation and 2*630 KVA substation. Heating can be purchased from the boiler- house of a timber-processing enterprise. Communications cable available in the centre of the industrial park, water and sewerage available. The area of business is expected to: - wood products manufacturing industry; - cluster companies servicing companies (wood cluster, metal cluster); - companies related with logistics - production must be environmental friendly; - production should not be labour intensive. The area of business is expected to: - wood products manufacturing industry; - cluster companies servicing companies (wood cluster, metal cluster); - companies related with logistics - production must be environmental friendly; - production should not be labour intensive.

20. Biggest suppliers in the region Rakiste Tehas AS General info: Export share of turnover:13 % Number of employees:58 Year of establishment:1992 Working languages: Estonian, Russian, German, Finnish, English Certificates: ISO 9001 : 2000 Fields of activity: Design and production of metalwork. Manufacturing of metal framed garden furniture, machine-building subcontract works Products: Metal framed outdoor furniture, punched details, light welded frames, machining (CNC turning, milling, drilling, grinding), special equipment and inventory according to drafts of customers, subcontracting. Technologies: Mechanical processing (turning, milling, drilling, grinding), thermal processing. Turnover: (2011) 2 246 991€; (2010) 1447817 € Profit: (2011) 321 291€; (2010) 199158€ Export turnover: (2011) 273 400€; 279 561€

21. Kunrex OÜ Established in 2003, Kunrex OÜ is a fast growing company engaged in metalwork. Our main activity can be divided in two: sale of workforce services and production of industrial and structural metal constructions and facilities including installation. In addition we act as construction subcontractors and manufacture different metal parts by order. Today the company has 54 highly qualified employees and a 1250 m² production facility with lifting gear and equipment needed for metalwork. The main markets are Estonia, Finland and Sweden. In 2007 Kunrex OÜ achieved a top 5 position in the Estonian Competitiveness Chart. Sertifikaat: ISO 9001:2008 Turnover: (2011)3330072€; (2010) 1878788€; (Profit:(2011) 58 503€; (2010)-93389€ Export turnover: (2011) 3140800€, (2010) 1624970€

22. Lindfords Steel OÜ Established in 2006, metalworking company, has premises in Rakvere, Lääne-Virumaa. Specialized on producing of stainless steel equipment and inventary: -Different transporters -Lifting and inclineing appliances -Inventary for facilities -Different appliances and solutions according to customer`s needs Turnover: (2011) 348376€; (2010) 293265€ Profit: (2011) 24134€, (2010) - 49597€ Export turnover: (2011) 108353€, (2010) 95983€

23. HeTi Pere OÜ Estonian based metalworking company manufacturing complex high-quality machines and precision details for customers with high requirements since 1995.HeTi Pere has developed a complete production process from storaging of raw materials, welding and mechanical processing to painting, assembling and testing. The company currently has 64 employees whose task is to provide fast and flexible high- quality supplies on a subcontracting basis in a short period of time. The company is useing different materials in their products: steel, high resistant steel (Hardox), acid-proof stainless steel (AISI 316, Duplex), etc. HeTi Pere produces a wide range of conveyors and equipment for plywood and paper industry, mainly for export.. Turnover: (2011) 4280106€; (2010) 3164459€ Profit: (2011)187617€; (2010) -153645€ Export turnover: (2011) 3653532€; (2010) 2874645€

24. Pomemet OÜ Pomemet LLC was founded in 1996. Today, the production volume is steadily increasing and improving and meets the most strictest quality requirements. The company has hold ISO 9001:2008 certification since 2005: in the field performing metal and welding jobs, and in manufacturing accessories for construction machinery. The company's product range includes snow plows, buckets for loaders and excavators, quickcouplers, asphalt cutters, cable shovels, forks. Export represents almost 90% of the turnover. Products are mainly exported to Finland, Sweden and the Baltic countries. Through the ages have been Pomemet mission the client's wishes to grant flexible manufacturing in high quality products to ensure customer satisfaction Turnover: (2011) 3631440€; (2010) 2475393€ Profit: (2011) 729740€; (2010) 373161€ Export turnover: (2011) 2483074€; (2010) 2047417€

25. Kopar Baltik AS Kopar Baltik AS, established in 2005, is a subcontracting company founded and owned by a Finnish engineering and manufaturing company Kopar Oy. For the moment approximately 90% of all of its production Kopar Baltik supplies to its Finnish parent company. Kopar Baltik AS has premises in Lääne-Virumaa, close to the city of Rakvere, approx. 100 km from Tallinn to east. In the small village of Uhtna, we have some 2000 m 2 of production and office facilities. In January 2007 we had 23 employees, 16 of which worked in manufacturing.Kopar Oy Turnover: (2011) 2425226€; (2010) 1302069€ Profit: (2011) 189633€; (2010) 4003€

26. Foundation Lääne -Viru Development Centre Investor consultant ar@arenduskeskus.ee Phone nr: + 372 32 58 028 www.arenduskeskus.ee