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British investment in Klaipėda – Albright Lietuva
Albright Lietuva, located in Klaipėda Free Economic Zone, is the Lithuanian production unit of Albright UK, and at the same time the only British investor in the main port town of Lithuania. The company makes switches and contactors, which are sold all over the world, but are mainly incorporated into other manufacturers’ large pieces of equipment. Albright Lietuva has operated to the ISO9001 quality system since early 2010, and has also obtained the ISO14001 environmental management system accreditation since 2012. The company in Lithuania is run by Ramūnas Barcevičius, who is proudly telling us all about the company’s operations in Lithuania and why this market was chosen by the British investor 6 years ago:
Ramūnas, from Albright’s company website it seems that 2008 and 2009 were years when the company expanded across the world, with new manufacturing units in Germany, Lithuania and China. Could you tell us something about the reasons for expansion?
First of all, to be more accurate, the German site is not a production unit, only a sales office. We will speak mainly about production units. The Chinese site was built to serve the Far Eastern market. The Lithuanian site was set up to move part of production from the UK because of lower labour costs, that is obvious. This is the main reason both these factories were set up in 2008. The market is quite tight so production costs are really important. By producing in Lithuania we are reducing the costs of the switches.
Why has Albright International decided to open their factory in the Klaipeda Free Economic Zone (FEZ)? Can you give three main reasons?
Actually I did not work for the firm at that stage but I understand from my boss that the reasons were as follows. There were two companies who were very active in helping us set up a factory in Lithuania. These were the former Lithuanian Development Agency and the management of the FEZ itself. At that time Klaipeda FEZ was far more organized than other free economic zones. The tax advantages were clearly a strong incentive as well.
When it came to choosing Lithuania, Albright already had some suppliers in Lithuania before setting up, so they knew the mentality of the people, that Lithuanians are very hard working people And why Klaipėda? Company has chosen Klaipeda, because of attractive geographic location for the logistics. It is close to the sea port, which we do not use very often, but it’s good to have the possibility to use the port and there are very good logistic facilities. Actually since Lithuania is in the centre of Europe, transporting goods is very easy.
Have the results justified the decision to set up in Lithuania?
Definitely, the tax system is very good for us, of course and we feel very good here.
How long did it take from the initial decision to start operations in Lithuania to becoming fully operational? Were there any snags you had to overcome? Any pleasant surprises?
Actually, Albright Lietuva was founded in May 2007 and by December 2008 started operations, with 12 people and a production output of 800 switches a week. Gradually we increased our production lines and staff, up to the current situation where we have production of 17,000-20,000 switches per week with 100 employees. So most of that growth was during the recession, and we think it was pretty impressive to grow so much. We think this is a good sign and we are proud of our management
Although it seems most of your products are exported, can you tell us where in Lithuania we are likely to see your products? And where do most of the products go to from Lithuania?
Lithuania is a very small market for our product. We have no sales office here, our sales are managed from the UK. Our switches go to UK and may come back to Lithuania as part of an end-user product like a fork-lift truck or other equipment. Our switches go to Germany, France, Italy, Slovakia, the UK, USA, and all over the world. Of course
we have a couple of competitors, no company has a monopoly, but competition in Europe is more or less stable.
“At the moment we employ 80% women and 20% men so the men are lucky! When we place an advert in the local labour exchange 90% of the CVs are from women applying, I don’t know why, maybe the gentlemen are very busy?”
It seems that most of your workforce are women. The website photos show women doing quite intricate assembly work. Have you had to train them from scratch or was there already a workforce with existing skills?
This is quite a common question. At the moment we have 80% women, and 20% men, so the men are lucky! When we place an advert in the local labour exchange 90% of the CVs are from women applying, I don’t know why, maybe the gentlemen are very busy? In any case ladies are more accurate, more precise, and maybe they are simply better with their hands at this type of work. There are a couple of guys also operating at the same level. All are trained locally, as our production is quite specific. In 2008, around 3000 staff from the Asian company Yazaki (also operating in Klaipeda Free Zone) were fired, so we were able to employ some of them and take advantage of their existing
skills. But every single operator or line leader has to be trained locally by us.
In the UK, you have joined the Governments 2006 Young Apprentice Scheme to develop your own engineers. What opportunities are there for young people in your Lithuanian factory to develop their careers?
First of all, our mother company is twice as big as the Lithuanian unit, so there are more career opportunities, for example in the sales office, in the quality lab and in the purchasing department. In Lithuania, we are not as big, so there are not so many opportunities. But now we also have something like the British scheme. We have a “young production engineer”, who was taken on board half a year ago, in his last year studying mechatronics at Klaipeda University. Now he is employed part time and when he has completed his bachelor’s degree he will be taken on full time. So we will already have a fully trained engineer. He will make his final project for his bachelor’s degree from our factory, so we are collaborating with the university.
What do you see as the main challenges for your business in Lithuania over the next few years? Will the change to the Euro affect your business much?
It is difficult to say, the market is always fluctuating, output must be increased suddenly, this is the main challenge for us tomorrow and the day after. But I think if we can survive during the economic crisis we can survive the euro, it is not such a big issue for us. As we already mentioned, during the economic crisis, we managed to significantly increase production and the number of our employees, so our future should be good.
Thank you Ramūnas for an interesting conversation and we wish Albright Lithuania growth and prosperity.
Prepared by Helene Ryding, BCC Social Member