Kreenholm Textile Manufacture was
established in 1857 by Baron Knoop
on the Narva river, which marks today
the boundary between Russia and Europe.


The factory is a unique example of
19th century industrial architecture
with water-powered complexes to
either side of a waterfall.

The manufacture handled the entire
chain from processing raw materials
to design and product development
and on to the finished product.

When Estonia regained independence in
1991, the factory was privatised.
In 1994, the Swedish company Borås
Wäfveri became the main shareholder.

In 2008, Kreenholm shut down its
spinning and weaving units. It faced
bankruptcy, and there was growing
unemployment throughout the whole Narva region.

Matti Haarajoki, a Finnish businessman
known for closing factories, led the firm
until Igor Poleschuk was appointed as
chief executive officer of Kreenholm
in December 2008.

Poleschuk had been working in Kreenholm
and knew the factory, the workers and
the market well enough to raise high expectations.

Although it was alleged that many of the
purchasing and sales contracts were dubious,
Igor Poleschuk stated that Kreenholm
was perfectly able to turn a profit.

In April 2009, the Swedish owners dismissed
Igor Poleschuk. He was replaced by Kenneth Udd
from Sweden and Tônu Luman from Estonia.

In summer 2009, the workers are just a few hundred
in bleaching, colouring, printing and sewing units,
producing home textiles.
and importing textiles from Pakistan, India and Turkey.

Relying on its flexibility compared to Asan firms, Kreenholm
plans to continue with home textiles clients

The slow decline of Kreenholm
reflects a sharp turn in philosophy in
textile production and in leadership,
from technocracy to brandmaking.

There are two major reasons for the
way that Kreenholm has evolved, says
Oleg Klushin, Kreenholm's ex-director.
In Soviet times there was a closed
market and all Kreenholm production
was intended for the Soviet Union.

This enormous market was lost
immediately in the early 1990's
with the collapse of the Soviet Union.

Then, after privatisation, the policy
was that Kreenholm should sell itself
as a brand, a devastating decision.

It turned out impossible to compete
with Asia for good markets
while remaining cost efficient.

The chosen path has proved ineffective
and operating at a loss Kreenholm will
hold out for a while, but not forever.