At the meeting, experience was shared in developing partnership relations between municipal authorities, the chambers, and business. During the visit, good practices in developing the activities of the free economic zone were introduced. Eimantas Kiudulas, General Director of the Klaipėda Free Economic Zone Management Company, introduced Lithuania’s investment potential in the context of the neighbouring countries as well as practical aspects of attracting investments. The companies operating in the zone introduced their activities and projects under development.

After the first meeting of the three cities’ Mayors and the heads of the Chambers of Commerce, Industry and Crafts thereof held in Klaipėda, it has been determined that sharing experience and developing relations inside the country is very useful when it comes to strengthening cooperation and revealing advantages of business in the regions, and, for this reason, it has been decided to arrange a second visit to Panevėžys, and a third one – to Šiauliai.

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“We care not only in business, but that’s how this business works. Hence the emphasis on the protection of the environment, the use of “green” technologies “, says Povilas Vasilauskas, Chairman of Board.

Every year the European Business Awards research team spend six months analysing over 15 000 companies across Europe to seek out the very best businesses that demonstrate the guiding principles of the Awards.

“We were particularly impressed with the success Klaipeda FEZ Management Company, JSC has demonstrated in its approach to Environmental and Corporate Sustainability and the impact this has had across its business and society as a whole. With this in mind Klaipeda FEZ Management Company, JSC has been selected for entry in the Environmental and Corporate Sustainability category”, says Elena Whybrow, Research Manager of European Business Awards.

Having been selected for inclusion in the 2012 programme, Klaipeda FEZ Management Company, JSC will now be eligible to compete to represent Lithuania in the competition.

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Export volume of these companies in the last year accounted for 37.5 % of the exports of Klaipeda County and was in excess of 5 % of the total exports from Lithuania.

According to the data of Klaipeda FEZ, the companies of the free economic zone made investments in excess of 26 million EUR in 2011, and paid 9 million EUR in taxes to the state budget. Purchases of goods and services from the Lithuanian companies totaled 222 million Euros.  The total investment figures made by the FEZ based companies since the year 2002, when Klaipeda FEZ commenced its operations, stands at 0.5 billion Euros.

“It is more than evident that the Klaipeda Free Economic Zone makes a significant contribution to the national economy and, primarily, to the exports of Lithuania. The increase in the Lithuanian export potential is particularly important for the health of the Lithuanian economy. We are happy, and the supervisors of the national budget should be appeased by the efficient utilization of the public funds invested into the Klaipeda FEZ – public investment of 1 million EUR generated 99 million EUR of GDP”, said Mr. Povilas Vasiliauskas, Chairman of the Board of the Klaipeda FEZ Management Company.

As noticed Mr. P. Vasiliauskas, 21 companies with 1300 staff operating in the Klaipeda FEZ Klaipėdos achieved such impressive results given relatively small amount of investments of public funds allotted by the Government, Municipality and the European Union, they did not exceed 9 million Euros. It has been estimated that one hectare of the used territory in the Zone (58 ha of the Zone territory are in use today) generated on average 15 million EUR of GDP each in the previous year.

In addition to the direct contribution to the national economy made by the Zone companies, an especial significance acquires the so-called Multiplier Effect created by these companies – the taxes additionally paid by the county’s companies that receive additional orders from the Klaipeda Free Economic Zone. By estimation of experts, in the previous year alone an additional amount of over 20 million Euros in taxes was paid to the State budget, and nearly 800 additional jobs were created.

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“An operating agreement with a fish processing company from Russia was signed, however, on request of the customer its name has not yet been announced”, said Povilas Vasiliauskas, Chairman of the Board of Klaipeda FEZ Management Company UAB.

Another two companies have launched design and construction works this year: Fortum Klaipėda, UAB, commenced laying foundations of the waste incineration plant, and construction works were initiated by Haidelberg Cement Klaipėda, UAB, which intends to open the cement import logistics terminal. Investment of the companies will amount to approx. 0.5 billion Litas and 10 million Litas respectively. The Chairman of the Board of the management company is certain that investors would be attracted if the project for a simplified procedure of planning on the FEZ territory is approved. This legislative instrument would enable changing the land plot size and configuration without detailed planning procedures within 50 working day time. “This would represent an essential advantage to investors as it would enable to cut implementation of investment project by 12 months on average”, said Mr. Vasiliauskas.

Vast Geography

This year Management Company of the Klaipeda FEZ has updated its website, published new illustrative materials on the Klaipeda FEZ which was distributed in exhibitions, conferences and business fairs, however, it does not disclose any data on extent of investment in advertising and promotion. The newly made contacts are prospective; businessmen from both Europe and Far East showed their interest in the FEZ. According to Mr. Vasiliauskas, potential investors from Norway, India, United States, Russia, Finland, Belgium, Denmark, Holland, United Kingdom, South Korea, China, Germany, Belorussia, Italy and a few representatives of the Lithuanian business expressed their interest in the opportunities of operation in the FEZ. Representatives of shipbuilding, aircraft, automotive, oil and fuel, solar energy and other industries were interested in the business development in the FEZ. According to Mr. Vasiliauskas, cooperation agreements for market research and search of investors with 7 foreign partners were signed.

Infrastructure Investment

It is acknowledged, however, that continuous renewal is required for sustainable development of the FEZ in order to satisfy expectations of investors. Managers of the zone hope that next year they would be able to start using the expanded FEZ area comprising total 112 hectares. This year a draft decision of the Government on definition of the Klaipeda FEZ boundaries has been prepared and approved by relevant authorities, the decision, however, has not been passed. The FEZ now operates area of 412 hectares.

The key infrastructure improvement works include construction of the new transformer station that will provide extended capacity; it is also expected that the Ministry of Transport and Communications will approve funding of the new Lypkiai Street from the next year budget of the Lithuanian Road Administration. It is expected that the rainwater harvesting system will be renovated because the current one has exhausted its operating capacities.

“For this reason implementation of new investment projects has become an issue. Therefore, investment projects for improvement of rainwater harvesting systems on the FEZ territory have been produced and submitted to the Ministry of Economy. These projects have been handed over to the Ministry of Finance for decision making concerning funding in the period 2012-2014. This project has been included in the State Investment Programme”, said Mr. Vasiliauskas.

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“Interest in the Klaipeda FEZ is growing. This year, we have attracted more than 70 potential investors from Norway, the USA, Russia, Finland, Denmark, China, Germany, Sweden, Azerbaijan and Belarus, as well as Lithuania”, said Povilas Vasiliauskas, Chairman of the Board of the Klaipeda FEZ Management Company.

During 10 years of operation, the amount of investment in the FEZ infrastructure coming from the European Union funds, the state and the municipality has reached LTL 45 million, but this only accounts for 2.8 percent of the total investments in the Klaipeda FEZ.

“According to our estimation, each hectare of developed territory in the Klaipeda FEZ has received LTL 150,000 in public investments. However, the global practice of the development of economic zones and industrial parks shows that normally, 1 hectare requires USD 1 million for the development of the engineering infrastructure. In our case, the state’s investments paid off as far back as 2004, while their value has increased almost tenfold, exceeding LTL 400 million today”, said P. Vasiliauskas.

2012 was a successful year for the FEZ companies. UAB Heidelberg Cement Klaipeda has launched production, and UAB Fortum Klaipeda has completed the construction of a new combined heat and power plant and is planning to start producing electrical and heat energy next year. UAB Vesvela started building a fish processing factory.

The year 2012 saw the completion of important infrastructural works in the Klaipeda FEZ: an 80 megawatt transformer substation has been equipped to ensure a reliable supply of electricity to the consumers living in the FEZ, the construction of two railway branch lines has been accomplished, a residents’ resettlement has been completed, the reconstruction of Švepelių street has been carried out, and the construction of the new Lypkių street has commenced.

From an environmental point of view, despite the intensive development of the Zone, the pollution in both the Zone and in the surrounding settlements is not increasing, and is considerably lower than the permissible levels. Furthermore, according to the data obtained from the study conducted in 2012, the pollution was slightly lower in comparison with the assessment results for the previous two years. This was stated in the annually performed assessment of environmental impact in the Klaipeda FEZ.

The total turnover of the companies operating in the Klaipeda FEZ has reached approximately LTL 3 billion, with exports accounting for 80 percent of this amount. The Klaipeda Free Economic Zone generates nearly 5.2 percent of the state’s total exports and 2.8 percent of the Lithuanian GDP. From the inception of the Klaipeda FEZ (in 2002), investments amounting to LTL 1.58 billion have been attracted to the Zone. The FEZ companies have manufactured products valued at 13 LTL billion, while the value of the exported products is LTL 10 billion. Over LTL 320 million of taxes have been paid to the state. As a result of the Klaipeda FEZ activities, other Lithuanian companies have received additional orders for more than LTL 1.7 billion.

“Figures show that over the last decade, the Klaipeda FEZ has become a very important part of the country’s economy. About 5000 new jobs have been created, just due to additional orders from the FEZ to other Lithuanian companies” said P. Vasiliauskas.

This year, international economic experts have selected the Klaipeda FEZ from 15,000 other leading European companies and nominated it for the “European Business Awards 2012” performance assessment for the sustainability of its activities and environmental protection.

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