«There is a very good expression – I don’t know how you people make due in Riga, but we’re doing fine in Latvia. I believe that there was no appropriate opportunity to assess our expenses during the crisis and because of that we were able to earn more money during the crisis than we earned during the so called «fat years». This especially counts for the woodworking industry,»- says pallet production company DLLA Chairman Armands Libietis.
He explains that pallet producers could make bets – if demand for pallets drops, the economy is in for some hard times. The current situation is no near as stable – pallets are either in high demand, or they are not.
«All this uncertainty is because of Europe’s market. We are cooperating with Germany, where demand is constant. It slowly dies in Italy; Belgium, Holland, Denmark, France and Spain have been “dead” for three years now. Maybe some of these countries do not have explicit economic difficulties and they are able to cover the demand for pallets on their own and import is unnecessary for them. Right now, the only perspective market is that of Germany – there is no slope there,»- explains Libietis.
Juris Saldaks, Chairman of Brodoor door production company, adds that one of the most perspective routes there are for the woodworking industry companies lies towards the Scandinavian market.
«I believe that these markets have opened up even more. It is possible that all this is related with the fact that we did not have stable buyers in this region in the past, but production distribution is settled now,»- Saldaks says.
It is much easier to develop many business branches in Jekabpils than it is in Riga because the region has lower expenses for space and workforce; raw materials are also more available, businessmen admit.
Saldaks says that the company was forced to decrease work volumes because of the crisis, but work progressed peacefully and they have been able to earn more money than before the crisis.
«It is possible because the end product is relatively cheap and of better quality. The target audience may have changed a bit – while less well-off people bought our doors before, the working class started buying our products during the crisis – this is why our production volumes decreased only a little,»- Saldaks explains.
He says that raw materials – wood – became almost twice as cheap during the crisis; workforce costs also decreased, so it was easier to work. «Brodoor production would have had a much harder time in Riga and its products would not have been as competitive as they are now. The fact that the company is situated in the region is only beneficial – considering rental fees, workforce costs and the availability of raw materials,»- says Saldaks.
Chairman of flower cultivation and trading company Sedumi Egils Bojars says that there is a notable increase in trading right now. «In my opinion, it is because there has been a large influx of EU fund money in recent time – so it seems that business has more work: salaries are being paid and there is more money to spend,»- says Bojars.
Meanwhile, the flower cultivation company has been expanding in 2012 because new greenhouses are being used and cultivation costs in which are different from those used in the past. Saldaks adds that his company has become a big player on the Latvian market, but compared with Lithuanian flower companies – Sedumi is a small company.
«The advantage of the company in this region is the fact that the buyer will always receive his product along with services, he can purchase all necessary goods in one place and will always receive all necessary consultations,»- Saldaks concludes.