Oct 11, 2006. /Lesprom Network/. Production costs of a pulp plant Estonian Cell launched a month ago in Kunda, northern Estonia have turned out to be considerably higher than projected in the business plan, BNS reported citing business daily Aripaev. Compared to the budget drawn up in 2001 and 2002, prices of Estonian Cell’s main expense items have risen significantly: the price of raw material or aspen wood by 62%, payroll by 43%, transport by 20% and electricity by 12.5%. Only the cost of chemicals remains on more or less the same level and the price of gas is fixed till 2008. At the same time the world market price of cellulose has come down by about 1% annually. "Our situation is poorer than envisioned in the business plan, but we’re not in a poorer situation than our competitors," manager Margus Kohava told the paper. The cost of wood and wage level is still lower in Estonia than in Canada or Sweden, for instance. Mr. Kohava said the pulp plant which is at present working at 70% capacity will be able to cover current costs by the end of the year. "Thus, it is not necessary to plow in extra money, but when the investment will start paying back is hard to tell," he said. The owners of the Kunda plant – Norway’s Larvik Cell, Heinzel Group of Austria, and the European Bank for Reconstruction and Development - have invested a total of EEK 2.4 billion (Euro 153.4 million) in Estonia. Estonian Cell’s biggest items of expenditure are electric power and raw material. To stay competitive as production costs rise, Estonian Cell is considering increasing production volumes by means of an expansion.