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A 15 Year Friendship with the EU: Obvious Advantages and Inspiration for Further Development

27 May 2019

Growing manufacturing, the goal of being innovative and responsible business representatives, these are only a few advantages inspired in the Klaipeda Free Economic Zone companies by the membership in the European Union. After pushing its doors wide open 15 years ago, Europe helped the businesses established in the port city of Klaipeda to grow, while assisting in distributing their products throughout old Europe and outside of its borders.

“It’s probably a coincidence, that our first PET granule has been made after Lithuania became a member of the European Union. Our first manufacturing line started operating in 2005,” reminisces Ruslanas Radajevas, the CEO of Neo Group. “So, we were able to develop end export our products into the markets of countries belonging to the European Union, to install necessary standards, make sure that we follow good manufacturing practices guidelines. After all, we could see a wider world before us and take advantage of the available opportunities.”

Opening at the right time allowed the company to take advantage of EU fund assistance, which heavily contributed to success: scientific and research activities were expanded, CO2 emissions have been significantly reduced in the manufacturing process by replacing the use of gas as fuel for biofuel. The company is also constantly trying to increase the amount of electricity from renewable sources it uses in the manufacturing process.

Environmental concerns in the activities of the company remain a priority. While taking part in circular economy development activities and participating in the Horizon 2020 program, which is being supported by the European Commission, Neo Group encourages collection and recycling of plastic waste, works toward optimizing the the amount of resources they put in and how much their production process uses (energy, materials, water, etc.)

“We can safely say that belonging to the EU encourages us to be innovative, socially responsible and effective. It directly represents our company values and pushes us forward,” says the CEO of Neo Group.

Members of the European Union have been the main target market for the company’s products. Around 50 to 60% of all production is exported to EU countries, 20-25% stays in Lithuania, so you can say that around 90% of all production from Neo Group is dedicated to the European Union countries.

After expanding its manufacturing capacity last year, Neo Group became the biggest PET granule factory in the European Union.

“Communication, cooperation and agreement. The only way to achieve the best results in the social and economic space is to work together. If we see a common goal and reach for the same vision, we will be ready for any challenge. That is how we work and wish it to the EU,” spoke R. Radajevas.

Wishes to avoid economic war

Vitalijus Žuta, the general director of Fortum Heat Lietuva, one of the companies in the Klaipeda Free Economic Zone, says that even though his company only has direct business interests within the borders of Lithuania, membership in the EU ensures greater business stability.

“Lithuania is a part of the European Union, which means that we must follow all laws mandatory to the members of the EU, just like the rest of the companies in the region. This allows us to plan our activities, knowing that local government changes and political scandals may happen but the main business rules will remain the same. Even if they change, they change for everyone at the same time,” says V. Žuta, wishing for less regulation and more free market for Europe at the same time.

The majority of the business being done by Vingės logistika is also being done in Lithuania. According to its CEO, Algimantas Bluškis, membership in the Union gives some advantages from the human perspective, by allowing citizens to move freely.

“First of all, I would wish for unity and cooperation, as well as understanding between the EU member countries. Most importantly, though, I wish we could avoid the economic war, which is happening between countries like the US and China,” wished A. Bluškis.

Wishes to keep thinking clearly

The CEO of Retal Baltic, Viktorija Jurevičiūtė, can name multiple advantages of staying in the European Union for businesses. First of all, it is the free movement of wares and unified competitive environment throughout the EU region.

According to the CEO, membership in the EU makes sales easier by removing some customs procedures and allowing shorter supply chains, reducing delivery times. A common currency also reduces the risk of financial losses due to currency value changes, the magnitude and variety of the market allow to develop a bigger portfolio of products, look for new solutions and apply innovations. It is also important that everybody has to meet the same quality requirements.

Retal Baltic works in several EU countries, so the ability to move capital freely allows the company to look for investment opportunities while developing their already existing company or evaluating development options in other EU countries.

“The free movement of people and the workforce is not only a disadvantage when thinking about Lithuanian problems (emigration) but also a great opportunity to attract highly qualified specialists by developing new products, installing innovative technologies, cooperating in international projects,” believes V. Jurevičiūtė.
The company, which makes plastic caps and other plastic production, exports 80-90% of its production to EU countries. The company’s sales doubled ever since it started working at the Klaipeda LEZ, though its share of exports to the EU remains the same.

Asked about the changes she would wish for the EU, V. Jurevičiūtė recognizes the integration processes that are happening around us and wished the EU members “kept cool heads and remembered the opportunities afforded to them by the European Union as members.”

“Reducing the bureaucracy and speeding up decision making. Increasing the movement of free capital, unifying requirements among all different EU countries while applying for a loan to invest, create or develop your business,” wished the CEO.

A huge market opened

Eimantas Kiudulas, the CEO of the Klaipeda FEZ, says that even in 2002, when the Zone was only in its infancy, the prospect of Lithuania being a member of the EU was one of the most important factors to attracting investors.

“At the time, it was a sign of quality, stability, and dependability for investors from the West. This remains true to this day, however, we are the ones who have clearly understood and experienced the worth of the EU over the last 15 years. I am not only talking about the infrastructure that can be seen with the naked eye but also the wide opportunities to specialists and students, who want to gain international experience, widen their horizons, establish connections and create value in their homeland using all of it,” says E. Kiudulas.

According to the data from the Lithuanian Ministry of Foreign Affairs, when Lithuania was accepted into the European Union 15 years ago, a huge market of 500 million people opened to Lithuanian business. Since Lithuania started its membership in the EU, the country received 36 billion LT (around 10.4 billion EUR) in financial aid. Effective utilization of EU funds allowed for faster growth of the economy and creation of new jobs: before becoming a member of the EU, Lithuania’s GDP was only 46% of the EU average, in 2011, it reached 62%, while it was 75% in 2014.

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