Estonian economy and food industryKarel LemberExecutive officerEconomic analyses division

Valmiera14.11.13

Food industry

• 453 enterprises• Half of enterprises has 1-9 employers• Family and lifestyle enterprises

segment is growing• 38 enterprises with 100 and more

empoyers

Structure of Manufacturing Industry 2012

Apparatus industry25.7%

Food industry14.8%

Wood industry13.1%

Chemical industry9.5%

Metal industry8.3%

Light industry4.3%

Furniture industry3.8%

Transport equipment3.7%

Construction materials3.5%

Machinery industry3.1%

Others 10.1%

Source: Statistical Office of Estonia

Food industry in Estonian economy

Share in value added

Share in man. in-dustry exports

Share of exports in

sales

Share in employ-ment of

man. industry

Ratio to average

wage

0

10

20

30

40

50

60

70

80

90

100

1.87.0

34.0

12.387.2

Source: Statistics Estonia

%

Sales and exports

2007 2008 2009 2010 2011 2012*0

200

400

600

800

1,000

1,200

1,400

-15

-10

-5

0

5

10

15

20

25

Sales Exports Change in sales (r.s.) Change in exports (r.s.)

Source: Statistics Estonia

million € % y-o-y

Number of workers and wages

2007 2008 2009 2010 2011 2012*0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

-12

-10

-8

-6

-4

-2

0

2

4

6

8

Number of employed peopleAverage wages (in Euros)Change in the number of employed people (r.s.)Change in wages (r.s.)

Source: Statistics Estonia

% y-o-y

825

Value added, labour costs and productivity

2007 2008 2009 2010 2011 2012*0

50

100

150

200

250

300

350

-15

-10

-5

0

5

10

15

Value addedLabour costsGrowth in total productivity (r.s.)Growth in labour costs productivity (r.s.)

Source: Statistics Estonia

million € % y-o-y

Food industry by sales

Meat processing industry18%

Fish processing industry11%

Dairy industry24%Production of prepared

animal fodder3%

Production of bakery and pasta products

10%

Production of beverages14%

Other17%

Processing and preserv-ing of fruit and vegeta-

bles4%

Source: Statistics Estonia

Dairy products 2012

Drinking milk cheese Cream Butter0

10

20

30

40

50

60

70

80

90

100

EstoniaLatvia

Exports by main target countries

Finland

Latvia

Lithuania

Russia

Sweden

Germany

0% 5% 10% 15% 20% 25%

2012 2011Source: Statistics Estonia

Imports by main origin countries

Latvia

Lithuania

Poland

Finland

Germany

Denmark

0% 2% 4% 6% 8% 10% 12% 14% 16% 18%

2012 2011Source: Statistics Estonia

Exports by commodity group

Dairy products27%

Meat products12%

Beverages7%

Fish products22%

Other products33%

Goods of Estonian originSource: Statistics Estonia

Investments

2007 2008 2009 2010 2011 2012*0

20

40

60

80

100

120

140

160

180

200

-80

-60

-40

-20

0

20

40

60

80

Investments in fixed assets Change in investments (r.s.)

Source: Statistics Estonia

million € % y-o-y

Consumer price index

2007 2008 2009 2010 2011 2012 2013100

110

120

130

140

150

160

TotalFood

Source: Statistics Estonia

Real wages and productivity growth

I'05

II III IVI'06

II III IVI'07

II III IVI'08

II III IVI'09

II III IVI'10

II III IVI'11

II III IVI'12

II III IVI'13

II0

200

400

600

800

1000

1200

-12

-9

-6

-3

0

3

6

9

12

15

18

Average wage Real growth of wagesReal growth of productivity

euro %

Source: Statistical Office of Estonia

Growth in manufacturing output in industries with higher value-added

Q1

2005 Q

3

Q1

2006 Q

3

Q1

2007 Q

3

Q1

2008 Q

3

Q1

2009 Q

3

Q1

2010 Q

3

Q1

2011 Q

3

Q1

2012 Q

3

Q1

2013

60

80

100

120

140

160

180

200

"Good" sectors "Average" sectors "Below average" sectors

Productionindex,

2005=100

Sectors with higher value-added have performed better after the crisis (also without electronics), recovery of industries with lower value added is modest. Similar trends illustrate employment, exports and profits.

Source: Statistical Office of Estonia

Smart Specialisation

1. ICT (horizontally through other sectors)

a) ICT in industry

b) Cyber security

c) software

 

2.Healthcare.

d) biotechnology

e) E-medicine

3. Resources.

f) Material science and industry

g) Knowledge based construction

h) Functional food

i) Chemical industry (oilshale)

Innovation in Estonia

Taxes in Estonia

Social&Headlth Insurance

Tax on dividends

Individual Income Tax

VAT

Corporate Income Tax

0 5 10 15 20 25 30 35

33

21

21

20

0

No corporate income tax on reinvested earnings

Thank You!