bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Sunday 26.05.2019 | Name days: Varis, Eduards, Edvards
LithuaniaLithuania

Lithuania‘s second-largest city Kaunas grabs major investments in 2017

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU

Linas Jegelevičius for the BNN

With the year winding down, Kaunas, Lithuania‘s second-largest city, has received some heart-warming news that, potentially, can prompt more upbeat front-page headlines in the future.

This week, Germany’s Continental, a leading German automotive manufacturing company specialising in tyres, brake systems, interior electronics, automotive safety, powertrain and chassis components and other parts for the automotive and transportation industries, announced of intentions to build a factory in Kaunas and invest 95 million euros in the facility, becoming the biggest greenfield investment in Lithuania’s history.

The news was followed by the other head-line grabber by Hollister, a US-based global manufacturer of medical devices and equipment, which on Wednesday, November 8, announced of launching construction of a 50-million-euro production complex in proximity of Kaunas.

Another German automotive giant Hella started building a 30-million-euro plant in the Kaunas free economic zone (FEZ) in mid-October.

Continental plans to create around 1,000 new jobs in the new electronic components plant, governmental foreign investment promotion agency Invest Lithuania said on Monday, November 6. Egidijus Jurgelionis of the agency told BNS that the exact location of the new plant was yet to be announced.

In the new facility in the Kaunas district, Continental will produce passenger safety and smart driver assistance systems, including door and seat control units, gateways and intelligent glass control units as well as radar sensors for comfort functions such as Adaptive Cruise Control (ACC) and safety functions such as Emergency Brake Assist (EBA).

«Building the first Continental plant in Lithuania is an important part of our growth strategy in Europe,»  Hans-Jurgen Braun, head of 28 Central Electronic Plants worldwide at Continental, is quoted as saying.

«Continental’s decision to set up in Lithuania may be the key breakthrough that will cause not only car manufacturers but also other major participants of the supply chain to pay close attention to Lithuania,» Mantas Katinas, managing director at Invest Lithuania, said in a press release .

Shayan Ali, future CEO of Continental in Lithuania, said production was expected to start by mid-2019.

Founded in 1871, the technology company generated sales of 40.5 billion euros in 2016 and currently employs more than 227,000 people in 56 countries.

Meanwhile, Hollister, a US-based global manufacturer of medical devices and equipment, has launched construction on a 50-million-euro production complex close to Kaunas. The production facility on the Kaunas free economic area is expected to create around 300 new jobs.

Headquartered in Illinois, Hollister has manufacturing and distribution centre on three continents and offices in over 25 countries. It sells products in more than 80 markets around the world.

According to Invest Lithuania, the past year of 2016 was «another record-breaking year» for foreign direct investments (FDI) in Lithuania and this year has produced even more foreign direct investments (FDI).

Lithuania attracted 36 FDI projects in 2016, which were thought to create 3,716 jobs over the next three years. By comparison, 28 foreign capital companies decided to set up operations in Lithuania in 2015, creating 2,370 jobs.

The year of 2017 has started off with a major arrival– Holland’s Macaw, an award-winning employer and digital solution provider, announced it is establishing in Vilnius its first office outside the Netherlands.

Some of the other newcomers this year are worth mentioning, too. The Danish window and door manufacturer Dovista set up a division in Marijampolė in southern Lithuania and is implementing one of the largest greenfield investment project in the country’s history; Ryanair has expanded its aircraft maintenance base in Kaunas.

Swedish capital companies were the biggest creators of jobs in Lithuania in 2016: over the next three years they plan to employ 1,340 specialists in Lithuania. German companies came second with 750 new jobs planned, whilst Danish and Finnish capital companies are set to create 300 new positions each.

In 2016, foreign direct investment projects were also brought to Kaunas, Klaipėda, Panevėžys, Marijampolė, Kėdainiai and Vievis.

Yet against the European background, Lithuania‘s performance in foreign direct investments (FDI) seems quite lacklustre.

In mid-2017, the FDI level per thousand inhabitants stood at 5,2 in Lithuania and, in that regard, only Romania (3,7) and Greece (2,7) did worse, meanwhile Latvia and Estonia, the other Baltic neighbours, boasted a remarkably better indication – 15,9 in Estonia and 7,4 in Latvia.

In another EU FDI ranking in the past summer, evaluating the EU member states’ investment capacities, Lithuania was also placed at the very bottom in most of the parameters (outward and inward FDI stocks, outward and inward FDI flows), although in some of the graphs Lithuania has improved, sitting comfortable in the mid-section of the ranking.

Lithuania has long positioned itself as a country with a cheap workforce, but due to the EU’s record-high emigration and bad demographics, it has become pretty expensive in recent years and cannot lure investors with a cheap labour, experts note.

«Indeed, a dozen years ago, many UK and German textile manufacturers were eager to open up here (Lithuania)… paying the tailors 300-400 euros. Now the wage has risen by three times. Other investors see a similar spike in the labour costs,» says Sigitas Besagirskas, president of Vilnius’ Industry and Business Association (LPVA)

Importantly, in the age of high-tech innovations and digital services, it is a high technology industry that encourages larger FDI into countries. Yet, Lithuania cannot boast of them – the high-tech industry’s input into the year’s GDP is a mere 2,5 per cent, one of the worst indicator in the EU. In comparison, it is 4,5 per cent in Estonia, the Baltics’ leader, and the EU’s statistical average is 4,7 per cent.

«Unless we manage to turn it around, the prevailing low and mediocre technological level manufacturing will get us nowhere,» the expert noted.

According to the LPVA head, the issue of shrinking workforce and scarcer tax money in the state coffers can be addressed through automatization and robotization of the production and service sectors.

«The essence is simple: already innovative companies become more such and those employed earn more and contribute more in taxes to the social security budget. Only that way the increasing army of the unemployed can be handled without a strain to the state,» Besagirskas told BNN.

For Lithuania, the polestar should be Ireland that has enjoyed a marvellous economy run since 2008 economic crunch.

To mirror the Irish success, Lithuania needs not only to overhaul its tax system, which is subject to multiple changes with a new government in office, but also thoroughly review its labour laws and overhaul the education system experts believe.

The country’s education system encompasses 47 universities and colleges in Lithuania. Although the demand for the specialties in most of them is way lower or non-existent, yet the schools, whose funding depends on the number of students, keep them intact.

For Besagirskas, the pillar of a country’s success is its image in the world.

«Again, Estonians can boast of Skype and zero profit tax for reinvested profits, although the latter does not always work well in the country,» he says.

According to the expert, Lithuania ought to do «way more» in servicing foreign investors.

«What is often characteristic for us that we tend to do only the initial work – meet the investor, sit down with him and sign an agreement. After that, the investor often is left alone puzzled how to get permits, where to find necessary workforce and et cetera. Only the Tauragė and Panėvežys municipalities stand out as the most investor friendly and helpful municipalities,» Besagirskas emphasised.

Ref: 020/111.111.103.5190


Leave a reply

«Extremely cumbersome» election process reason for low Latvian turnout abroad, expert says

The low voter turnout of Latvian voters abroad could be due to «an extremely cumbersome» election process outside Latvia – to vote a person had to register about a month earlier, said European Movement – Latvia’s head Andris Gobiņš.

Valmiera reached highest turnout among Latvian cities in EP election by afternoon

As voters in Latvian cities took part in the European Parliament’s elections, the highest turnout by afternoon has been in Valmiera, but the lowest – in the second city Daugavpils, according to the data compiled by the Central Election Commission.

«Latvia could improve turnout of previous elections». EP elections in pictures

The turnout of the 2019 European Parliament’s elections in Latvia has the potential to exceed the turnout of the previous polls five years ago, according to political expert, co-owner of Mediju tilts public relations agency, Filips Rajevskis.

Voter activity in Latvia reaches 27.38% in European Parliament elections

By 16:00 Saturday, 25 May, a total of 386 552 citizens or 27.38% of the population with voting rights in Latvia took part in European Parliament elections, according to data compiled by Central Election Commission.

Latvian State Police commence two administrative cases on political promotion

On Saturday, 25 May, Latvia’s State Police commenced two administrative cases on breach of regulations – publication of political promotional materials during elections. Police found promotional booklets of a political party put on wind shields of parked cars in Ķengarags, Riga.

Residents in Latvia complain to Central Election Commission about election aspects

Although generally speaking European Parliament elections in Latvia have so far been calm and without many incidents, some residents complain about possible political promotion and inability to find their election sites, says Central Election Commission’s head Kristīne Bērziņa.

20.24% of Latvian citizens have voted in EP elections so far

A total of 285 800 Latvian citizens or 20.24% of the total number of voters in the country have participated in European Parliament elections so far.

Riga Tourism Development Bureau gets «new» management

Guntars Grīnvalds, who until now worked as board member, has been approved as the new chairman of Riga Tourism Development Bureau. Ieva Lasmane has been picked as a new board member. Resignations from Maksims Tolstojs and the detailed Vita Jermoloviča have also been accepted.

Statistics: the older a person, the lonelier that person is

17 % of the population aged 75 and over mentioned that during the last month have felt lonely all or most of the time, while such an assessment among younger people aged 25–34 was given ten times less frequently.

Opinion: oligarchs’ wallet won’t work in Latvia’s first open presidential election

The President of the Republic of Latvia may be an opportunity for Aivars Lembergs, who is accused of committing serious crimes, to receive a pardon in case the court finds him guilty in the criminal process that has been continuing for years.

Video: British Prime Minister announces stepping down on June 7

The head of the British government, Theresa May, listened to pressure from her own Conservative Party and announced plant to resign on June 7 without reaching the Brexit compromise she was aiming for.

Justice Minister says Latvia’s government will not exist without his party

Without New Conservative Party, Prime Minister Krišjānis Kariņš’s government would cease to exist, said the leader of NCP and Latvia’s Justice Minister Jānis Bordāns in an interview to Latvijas Radio on Friday, 24 May.

Estonian electricity grid operator enters deal to join European network

Estonian electricity and gas network operator Elering has signed the agreement to become part of the synchronous electricity network of Continental Europe together with Latvia and Lithuania.

Many EU citizens not allowed to vote in UK

During the European Parliament’s elections in the United Kingdom, many citizens from other European Union member states have been turned away at polling stations.

Baltic railway carriers desire open market for free competition

«Attempts to commence cross-border cooperation with private carriers of neighbouring Baltic States are impeded in order to preserve dependence on services of state railway companies,» said Baltic Express director Māris Bremze after a meeting between heads of Baltic private railway carriers.

Heads of Latvian Railway lose Latvian State Railway Administration’s trust

Latvia’s State Railway Administration has sent a letter to Transport Ministry and Latvian Railways. In it they ask the government to «evaluate behaviour of LDz leading officials – Edvīns Bērziņš and Aivara Strakšas – in writing an application containing false information and thereby organizing a discrediting campaign against State Railway Administration».

Stoltenberg expresses NATO’s full readiness to react to Russian cyberattacks

NATO stood ready to respond to cyber attacks from Russia and other possible adversaries with all its capabilities, the Secretary General of the alliance has stated.

Weather becomes cooler in Latvia; meteorologists promise warmth will return

On Friday, 24 May, an atmospheric front will pass through Latvia, causing cloudy weather, rain and thunderstorms in eastern portions of the country.

Eco Baltia concerned about possible complications in waste management procurement in Riga

Eco Baltia supervisory board has voiced no-confidence to the concern’s environment management company Eco Baltia vide’s board members Māris Simanovičs and Jānis Aizbalts over the decision to found CREB Riga together with public waste management service provider Clean R.

Study: 50.6% of enterprises view Latvia’s business-related legislative environment negatively

Latvia’s business-related legislation is poor to very poor, according to 50.6% of interviewed entrepreneurs. Only 19.2% view legislation as either very good or more or less good, according to Turība University’s Business Index.

Lithuania: Nausėda and Šimonytė set to square off in Sunday’s runoff election

The nail-biter presidential election will produce late Sunday a new host of the presidential palace in Vilnius’ Daukantas square for next five years, but which of two candidates will be there, now only God knows.

Political carousel. Survey of Latvian political parties aiming for EP elections

Although Latvia will have eight seats in the European Parliament, there are 249 candidates from 16 political parties. If you have yet to make a choice who is worthy of representing Latvia and the country’s interests it is worth looking into party leaders told BNN news portal in regards to their political priorities.

25% Estonian voters have voted days before European elections

Estonian voters have been active in early and online voting as a total of 25,4% of eligible voters have taken part in the European Parliament’s elections. The election days in the Baltic states are on Saturday or Sunday depending on the country.

Producer prices in industry in Latvia grow 3.8% in April

Compared to April 2018, average level of producer prices in Latvian industry increased by 3.8 % in April 2019. The level of prices of products sold on the domestic market rose by 6.0 % and that of exported products – by 1.8 %.

Latvia’s Prime Minister proposes assessing governance of EP elections once they are done

The current state of European Parliament elections in Latvia suggests there is a need to assess governance immediately after their end, said Latvia’s Prime Minister Krišjānis Kariņš.