A shuttered paper mill becomes an AI hub

Kajaani is a city with a population of approximately 36,000, located about 560 kilometers north of Helsinki, Finland. After walking for about 20 minutes through dense forest paths from the center of Kajaani, a wide site lined with old brick buildings came into view.

This place, where the quiet forests of Northern Europe and the traces of a massive industrial zone create a striking contrast, is the 'Lempäälä' industrial complex, covering an area of approximately 700,000 square meters, equivalent to 100 soccer fields.

Carefully examining the plain factory buildings reveals the coexistence of entirely different eras. On one wall of a building labeled with the Finnish word 'VARASTO' (warehouse), logos of global data companies are displayed.

The contrast between old industrial facilities and advanced infrastructure was once again clearly visible in the data center building housing 'LUMI,' the European Union (EU) supercomputer, within Lempäälä.

A massive aluminum-clad structure placed in the middle of a dimly lit hall emits a bluish light, with racks of the supercomputer lined up inside. Looking up, plain and rough concrete beams and faded walls built decades ago were fully exposed through the high ceiling. It is a scene where the advanced brain of AI and the rough framework of an old factory coexist in one place.

This industrial complex once housed a large paper mill operated by UPM, which was at one time the center of Finnish manufacturing and a world-leading paper company. The mill produced 640,000 tons of newsprint and magazine paper annually. It had propped up the economy of Kajaani, but it ultimately ceased operations, unable to withstand the sharp decline in paper demand due to digitalization and the cold wave of the 2008 global financial crisis. Along with the decline of the paper industry, approximately 530 jobs in the region also disappeared.

Ironically, what turned the city's crisis into an opportunity was the 'legacy' left behind by the paper mill. The paper industry, which processes wood into pulp and presses and dries paper, is a representative high-energy-consuming sector. Although the factory stopped operating, the 230th-megawatt (MW) class transformer equipment and high-voltage transmission and distribution network that had drawn massive amounts of power remained intact. This was a decisive advantage that could reduce the time for grid expansion and system connection waiting periods, which are considered major hurdles in building data centers, and also save on related infrastructure investment costs.

This power infrastructure was also behind the reason why CSC, a Finnish public enterprise providing IT services for science and research, selected Kajaani as a new site in 2010 while pushing to expand its data center located in the Helsinki region. In fact, the annual electricity consumption of Kajaani City plummeted from 1,877 gigawatt-hours (GWh) in 2007, when the paper mill was operating, to 475 GWh in 2009, immediately after its closure. Data centers have taken root in the space vacated by the sudden departure of large-scale manufacturing power demand.

Juha Oinonen, head of data centers at CSC-Finnish IT Center for Science, whom we met at the LUMI data center in Kajaani on the 17th of last month, said, "Data centers start everything with electricity," adding that "the ability to utilize the infrastructure that remained intact when the paper mill ceased operations was a significant reason for choosing Kajaani."

Not only the power equipment but also the old factory buildings themselves were used as they were. Instead of building new structures, CSC chose to build data centers inside the massive factory shells. This is a pragmatic choice aimed at significantly reducing carbon emissions from the construction process, in addition to the symbolic effect of dressing future industries in past spaces.

Eva Soka, manager for the data center ecosystem at Finland's CSC, said, "Choosing to build buildings within buildings reduces the amount of construction work required and can greatly reduce carbon emissions generated during the construction process." The 'LUMI AI' data center, also being built in the same factory with a target operation start in the second half of 2027, will be constructed using this 'building within a building' approach.

After CSC broke new ground by building a scientific and research data center on the site of an old factory in Kajaani in the early 2010s, commercial data center companies such as Borealis have also successively set up base there.

The strategy of transforming halted manufacturing sites into data centers, like the case of the Kajaani industrial complex, has become a core investment attraction model across Finland. Google's recently announced large-scale investment in Finland was also underpinned by the experience of successfully verifying the conversion of idle paper mill sites over the past decade or so.

On the 9th of last month, Google announced that it would invest at least 13 billion euros (approximately 19 trillion won) between 2027 and 2028 in key Finnish regions including Kajaani, Muhos, Vaala, and Hamina to build new data centers or expand related infrastructure. Google had already acquired an old paper mill in Hamina, southern Finland, in 2009 and transformed it into a data center. Finland's brownfield strategy (recycling existing Ministry of Trade, Industry and Energy) of swiftly converting idle industrial infrastructure has coincided with the global AI data center expansion period, leading to large-scale investment results.

Jussi Okerberri, head of the growth services program at Business Finland, an investment promotion agency under the Finnish government, said in an interview with MoneyToday, "Google's current investment was certainly not achieved overnight," adding that it is "the fruit of mutual trust and a cooperation system built up over a long period since the construction of the Hamina data center."

*This planned reporting was supported by the Korean Journalists Association and Climate Media Hub.