About the company
Contents

About the company

We are characterized by openness, dedication to what we are doing, and the ongoing development. We believe that each step and activity must create a higher value for everyone, both for our own people, partners, and clients and for the local community.

We are a large Estonian industry enterprise that is based on local private equity, and our main fields of activity are oil shale extraction, shale oil, heat and electric energy co-production, and the production and marketing of fine chemistry products.

VKG’S mission

valuing the most essential Estonian natural resource - oil shale.

Our vision

is to maintain the role of the sustainable leader in the Estonian oil shale industry, which has been attained due to the growth in efficiency within the changing situation at the market and be an innovative initiator in terms of opening up the oil shale potential.

VKG’S values

  • Openness
  • Commitment
  • Development

VKG's strategic goals for the next few years

Ensuring the availability of raw materials

VKG's current total demand of raw material is 5 million tonnes of oil shale. The maximum extraction volume granted to VKG, with the possibility of retrospective mining, amounts to 4.4 million tonnes of oil shale. Thus, one of our main tasks is to constantly look for ways to change this situation.

Extraction of maximum energy from oil shale

An indication of the efficiency and sustainability of each production is the energy efficiency of the production process, which shows how much energy entering with the raw material becomes useful products. For example, the average energy efficiency of VKG's shale oil plants Petroter is more than 90%. The high figure is achieved due to the fact that in addition to shale oil, steam, hot water and semi-coke gas with high calorific value are produced, from which VKG Energia produces electricity, steam and district heating water. Our goal is to reduce the unused part by increasing the energy efficiency of production processes.

Adding maximum value to the final products

The goal of every modern industrial company is to continuously extend the value chain. The greatest potential in current production chain lies in adding value to waste and improving the properties of oil products, which is particularly important for maintaining demand for the products in the world market under increasingly stringent environmental requirements.

Creating an effective organizational culture

Regarding effective organizational culture, we can look at increasing the productivity of assets and labour, the increase in the added value of jobs, and management directed to results and improvements.

Competitive cost price of shale oil

VKG operates on a volatile market, where the price of shale oil can fluctuate to a very large extent over a short period of time. Competitive cost price allows us to achieve high liquidity, which helps to survive periods of crisis and to invest in technology and workforce.

The company has 7 subsidiaries

Production

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VKG Kaevandused

The excavation of the main raw material, i.e. oil shale

Turnover 72,3 mln euros
Employees 536
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VKG Oil

The production of shale oil and fine chemistry products

Turnover 214,5 mln euros
Employees 678
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VKG Energia

The production of heat and electric energy

Turnover 80,5 mln euros
Employees 115

Services

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VKG Soojus

The distribution and sale of heat

Turnover 14,9 mln euros
Employees 19
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VKG Elektrivõrgud

The sale and distribution of electric energy

Turnover 13,6 mln euros
Employees 42
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VKG Logistika

Logistic services related to automobile and railway transport

Turnover 13,8 mln euros
Employees 108
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Viru RMT

Repair and assembly services

Turnover 10,7 mln euros
Employees 169
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Viru Keemia Grupp

Auxiliary services provided to the subsidiaries of the Group

Turnover 9,1 mln euros
Employees 95

Main products and services of VKG

  • Ship fuels
  • Heating oil for local heating boiler plants
  • Electrode coke for electrode manufacturers
  • Oil shale fine chemical products for perfumery, cosmetics and textile industries
  • Oil shale gas for production of heat and power
  • Vehicle and railway transport services
  • Steam and air conditioning for large-scale industrial companies
  • Production, transfer and sale of heat and energy to households and companies
  • Repair, assembly and rental services of machinery and equipment
  • Consulting services in the field of oil shale processing technology

Geographical sales distribution of the
products and services of VKG

Belgium
Estonia
Gibraltar
China
Spain
Netherlands
India

United Kingdom
Italy
Japan
Lithuania
Latvia
Poland
Germany

Saudi Arabia
Senegal
Slovenia
Finland
Denmark
Togo
Ukraine

Uruguay
USA
Belorussia
Russia
Vietnam

Main production indicators of VKG in 2018


Oil shale extraction volume
4.35

million tonnes of trade oil shale

+ 6 %

Oil shale processing volume
4.76

million tonnes of trade oil shale

+ 10 %


Commercial shale oil production
606600

tonnes

+ 13 %


Production
454 GWh

of heat

+ 0.4 %


Production
466 GWh

of electricity

+ 12 %

This makes VKG Energy the second biggest producer of electricity in Estonia.



Focus on the Upcoming Period

  • The maximum and stable loading of current production facilities
  • Boosting the value of end products to the maximum
  • Improving energy efficiency
  • Enhancing the efficiency of business processes via digitalisation and automation
  • Ensuring the availability of raw materials
  • Reducing the environmental footprint
  • Developing the organisation and its people

Projections for 2019


Oil shale processing
4.35

million tonnes

Oil shale mining volume
4.3

million tonnes

VKG's share in the state tax revenue
47

million euros

VKG's number of employees
1750

Highlights­ of the reporting periood

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According to the rental contract entered into in 2018, the company Nordcoin Mining is going to set up a container fleet on the production territory of VKG that is required for excavation works, and cryptocurrency mining process was launched.

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The collective agreement entered into the management board of VKG and the Trade Union of Chemists for two years entered into effect, which covers all of the employees of the Group, even those who are not members of the trade union.

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The graduates of Ida-Virumaa upper-secondary schools represented the area at a prestigious 'Five School Contest'. It is a large-scale initiative of ours that is aimed at increasing the interest in learning sciences and engineering among the youth.

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The financial indicators for the past year were obtained, according to which, in two years time the Group will once again come into profit.

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The pilot project involving the cooperation between VKG Kaevandused and Ida-Virumaa Vocational Centre was completed successfully, within the frames of which the young specialists from the Ojamaa mine completed a special course, coordinating their work with studies. As a result, 16 employees obtained a professional qualification of mine workers.

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For the first time, VKG took part in the country-wide initiative 'Bring your child to work!'. Within the frames of this event, the pupils of 7th-9th grades had the opportunity to come with their parents to their workplaces and familiarize themselves with their working environment. This way young people get an overview of what is happening in the world of labour and by the end of the day they get a better understanding of why different jobs are important, and that every single worker and employee is significant.

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On the production territory in Kohtla-Järve, the semi-coke pipe conveyor was launched, and in the future, the entire amount of waste from the oil shale plants of Viru Keemia Grupp, both semi-coke and ash, will be forwarded to the storage area via the environmentally-friendly pipe conveyors. It is an innovative solution that has been used in the latter decade in many branches of industry, but VKG was the first one in this region that has implemented this technology. The use of this system means a considerable decrease in the effect exerted on the environment, cleaner production territory, and higher economic efficiency. The investment in the amount of 1.5 million of euros was made into the development of the semi-coke pipe conveyor at Kiviter, and it allows to stop using trucks for loading semi-coke at the plant and taking it to the dumpsite in the hills. The trucks had to climb the hill 50 metres high on the path of 900 metres, which was accompanied by significant fuel consumption and a high level of CO2 emissions. The pipe conveyor has helped to decrease the path driven by trucks by 2.5 kilometres, which means that the total reduction of the number of kilometres driven per day is 625 km, and 563 litres of fuel is saved. The ash generated at Petroter plants has been taken to the dumpsite since 2015. The ash conveyor was launched together with the third Petroter oil shale plant, and this logistic solution cost 10 mln euros.

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Changes took place in the management boards of VKG Elektrivõrgud and VKG Soojus. Ivo Järvala became the chairman of the board of VKG Elektrivõrgud, while Andres Klaasmägi, who had so far been working as the administrative manager of the Group, became the new member of the board of VKG Soojus.

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At the beginning of April, the consulting company Sustinere, the developer of the concept of sustainability, published research that was conducted all over Estonia among 100 the most successful companies that provide employment to 80,000 people, i.e. 12.5% of the working population. Sustinere analyzed the annual reports of those companies in order to find out the topics described; what lies beneath the financial indicators; what principles the companies are managed by; how the companies treat people, the environment, and the society as a whole. 14 companies were differentiated in the results of the research, and one of them was VKG, whose reports contained a well-informed and integral description of social responsibility.

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In May we got together with the most active employees of the Group in Kiikla in order to help our good neighbour Kiikla Children's Home in spring communal works that have already become a good tradition.

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VKG is still one of the leading socially responsible companies, and it received the bronze medal for the eighth time.

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After a three-year break, the Chemist´s Day was held once again, and one of the events within the Chemist´s Day was the Eastman Charity Run.

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For the fourth time in a row, the yearbook concerning the oil shale industry in Estonia was published. According to the data collected in 2017, it became clear that, within the context of the growing global economy as well as the variability of market prices and a small increase in oil prices, the oil shale industry had revived: a record-breaking amount of over one million ton of shale oil was produced and over 16 million tons of oil shale were excavated.

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School Bell Day was held, which is one of our favourites. 58 boys and girls, whose parents work at the Group, went to school for the first time in their lives.

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The Estonian Mining Museum in Kohtla-Nõmme hosted the people living in Ida-Virumaa on the Miner´s Day, which, according to tradition, takes place at the end of summer.

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The employees of VKG and Eesti Energia, together with the guests of the Miner´s Day, took part in the 'Estonia is Dancing' initiative, proving by personal example that there are no limits for those who love dancing, and the industrial landscape can be even more suitable for dancing than any dancefloor.

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The management board of VKG had a meeting with the president of the Republic of Estonia Kersti Kaljulaid when she was working in Narva. A lot of topics were discussed at the meeting, starting from the developments in the sector in the long-term perspective and up to the opening up of the potential of the region and a more distant future.

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The updated Personnel Policy of the Group was published, which is based on our mission and vision and supports our basic values.

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At the Ojamaa mine, the first stage of the two-year project aimed at enhancing underground safety was completed, in the course of which the most state-of-the-art smoke detectors were installed in the most dangerous areas under the ground, which control the level of carbon monoxide in the air.

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With the purpose of joining the provision of all of the logistic services in one unit thus increasing the transparency of this business sphere, from 1 October the logistic services have been offered by VKG Logistika instead of VKG Transport.

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The Environmental Board and the town of Kohtla-Järve confirmed the action plan aimed at reducing the number of aromatic substances submitted by the Group, according to which we made an investment in the amount of 1.1 mln euros into the improvement of the quality of ambient air. Five measures will be implemented within the next two years, in the result of which we are planning to reduce emissions by 12%.

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Our long-term and varied cooperation with the educational institutions in the area was acknowledged on the national level. Viru Keemia Grupp became the finalist in the 'Education friend' category. All in all, there were 19 diligent contributors to education in this category.

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The traditional Environmental Day was held at Viru Keemia Grupp named 'The environmental effect - acceptable or unacceptable? within the frames of which the possibilities for the development of large-scale projects in contemporary Estonia were discussed within the context of the assessment of environmental effects.

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The Group opened its doors to future specialists on the state-wide Labour Shadow Day.

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The Competition Authority approved of the application of VKG Soojus to reduce the prices for heat for its own customers by 5%. In the network area, the new sales price for heat energy became 52.66 euros (plus VAT) per megawatt per hour.

Recognition

  • Estonian Responsible Business 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019 ‒ VKG
  • Smart Industrialist 2019
  • Estonian culture-friendly company 2012, 2013, 2014
  • In October 2012, Viru Keemia Grupp was elected among the best 3 enterprises Swedish Business Award in the category of 'Sustainable growth'.
  • On 23 February 2012, Nikolai Petrovitš, a member of the VKG board and the head of the best enterprise in Estonia in 2009, VKG Oil AS, received  an Order of White Star, IV class  from President of Estonia Toomas Hendrik Ilves, for supporting the development of the region.
  • Viru Keemia Grupp (VKG) received the Environmental Enterprise of the year 2011 Award in environmental management category.
  • Enterprise of the Year in Ida-Viru county - 2010
  • Grand prize within the framework of the contest Entrepreneurship Award 2009 ‒ VKG Oil