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E. Kiudulas: After a decade Investment In Klaipeda Fez will exceed €1 billion
Investments in Klaipeda Free Economic Zone (LEZ) are set to exceed €1 billion in the next decade according to Eimantas Kiudulas, CEO of Klaipeda FEZ. What is it that is driving this spectacular growth? Mr. Kiudulas explains that first and foremost it is Klaipeda FEZ’s ability to provide the fastest set-up possible. Location is another key factor, with Klaipeda seaport nearby the FEZ can act as a global distribution point. Finally, there is the top flight local talent and Lithuanians returning from abroad who are attracted to work with the strong international companies that populate the FEZ.
– Klaipeda FEZ is the most successful FEZ in Lithuania. What has driven this success?
What sets us apart from other free economic zones in Lithuania is the seaport in Klaipeda. Our main competitors are not Kaunas FEZ, Panevezys FEZ or Akmene FEZ, but other regional seaports – the most obvious competitor being Gdansk in Poland.
Moreover, how fast we can have a company up and running is vital to our success. So, to ensure that companies who want to work in Klaipeda FEZ are able to launch their operations as quickly as possible, all our real estate solutions have to be prepared in advance.
Although “Invest in Lithuania“, the national FDI agency, works proactively on our behalf, we have to attract the majority of investors ourselves and the competition for investment is brutal.
This year we decided to invest in a new project, “Flex Start One“. At any moment we need to have at least 2000sqm empty for potential investors. So that’s why we have already begun construction of the project “Flex Start One“. This will be a building whose ready to use spaces will be available for businesses to rent. It has been designed with manufacturing in mind and will come fully equipped to customer specifications so that companies will be able to launch their operations within as little as 2-3 months. Moreover, we have already begun preparing a project for the second building. And we have planned a location for the third because we can see there is a lot of demand for this.
– Are any of your new investors planning expansion? Are you waiting for new investments?
– Two of our companies are planning to expand; however, before this information can be announced publicly, we will have to wait for the companies to confirm it. Moreover, there are 8 companies which will have to make their decision in the next 6-8 months. We are negotiating with them about their investments right now.
Talking of current investments, the biggest companies are “Indorama” and “Neo Group“. When it comes to employee numbers, “Yazaki“ is the leader. Presently, we have one car part manufacturer project who wants to launch its production at the end of January-February. This project is quite prestigious, and we would very much like it to make Klaipeda FEZ its home.
– Klaipeda’s 2030 development strategy plans to create 25,000 new workplaces and attract €1.5 billion in new investments by 2030. What are the ambitions of Klaipeda FEZ?
– Almost 700 million euros have been invested so far. So, thinking logically, we would be looking to double the number of cumulative investments by 2030. I think these expectations can be implemented.
– You are currently focusing on production. Are you interested in the service sector?
– We are planning to concentrate more closely on production and also give more focus to logistics. Logistics is not only about distribution and storage, it is also about the creation of added value in the logistics process. We think that services should be directed to the city of Klaipeda.
When we talk about production, we are looking at attracting more modern manufacturing companies. Companies who come to Klaipeda FEZ commonly bring new technologies with them, usually in terms of equipment.
– Do you have in mind companies that belong to what has been called the Fourth Industrial Revolution?
– Yes, exactly. This is a natural tendency. There are some companies who are invested into making the Fourth Industrial Revolutionary a reality. And they are putting a lot of money and effort into that.
– What legislative changes would you like to suggest to the government that could help to make the FEZ even more competitive?
– We want to attract large wholesale distributors from Scandinavia to move to this region. Klaipeda is a perfect logistical center for organizing operations to a number of global markets; the EU to the West is on our doorstep, as is the huge CIS market to the East. And with all the major shipping lines operating through Klaipeda, our reach can be extended even further. Even China can be accessed quite easily through rail freight. But before we can really leverage this advantage we have, we must first work towards changing the current FEZ regulation, which restricts such activity. This we aim to do as I think that by enhancing business conditions and promoting entrepreneurship we can really drive our economy forward.
– What is the main advantage of Klaipeda FEZ compared with Gdansk?
– Speed. Poland is a big market, a big country, and it is closer to Western Europe. But what we may lack in size, we more than make up for in speed and flexibility. In fact, this is our core advantage over bigger countries like Poland – we have the ability to respond quickly to a company’s exact needs and prepare an offer with real speed.
– How do you evaluate Lithuania’s prospects?
– I feel most optimistic when I see people from the new generation. They think differently, they have finished their studies abroad and even if they haven’t they come with different experiences. They are ambitious and have no fear. This new generation is the one that will lead Lithuania. They are the new wave.