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Success stories invite you to invest in Klaipėda
One should also remember that this city has one of the most promising free economic zones with best conditions for business development.
According to the Financial Times magazine FDI Magazine, this year Klaipėda’s Free Economic Zone was among the world’s top five economic zones according to business conditions created as well as among the world’s twenty most attractive economic areas.
According to the Director General of Klaipėda’s FEZ Managing Company Eimantas Kiudulas, Lithuania is not quite suitable for mass production, but if investor wishes to manufacture reliable products, which must be made quickly and timely, for the EU market at cheaper cost, if he or she is interested in our neighbouring markets in Scandinavia, Russia and Ukraine, Klaipėda is the best place to start.
“We are closer to the Western European and Scandinavian end consumer, and we can supply the manufactured goods much more rapidly than the Asian countries,” he stressed.
E. Kiudulas also pointed out that Klaipėda can offer its prospective investors tax incentives, port services, a city with two universities and surrounding resorts, as well as flexibility, adaptability, speed and aid in decision-making. Of all the EU countries, Lithuania and Klaipėda are the most appropriate places to invest due to minimization of costs and changes in the Government policy with respect to investments.
“Each investor, whether it be an industrial or logistics company, wishes to settle as quickly as possible. We currently manage 412 ha of land and look forward to working with both large and small, narrow specialization and specific projects, because we already have all necessary infrastructure, lease production and storage facilities, can construct the exact building the investor needs, and manage the project from the very beginning to the ‘key’.
We have long-term partners, providing the logistics, construction, legal, engineering and other services with us,” he says.
The city also contributes
According to the prepared city’s marketing and communications strategy: Klaipėda is a modern port city with high life quality level and developed science, investment and tourism infrastructure. It is attractive to its inhabitants, tourists and investors. Klaipėda is the highest level transportation connection point securing good East to West transit conditions.
The city actively cooperates with other Baltic seaports and fully engages into the recreational system of the Baltic Sea.
The Director of Klaipėda’s Economic Development Agency Raimonda Laužikienė pointed out that, according to the city’s marketing and communications strategy, investments into the city’s service business (particularly logistics) and modern service centres as well as traditional industry with high added value (plastic and food manufacturing) are encouraged.
It is vital for investors to create as many jobs, especially for graduates of the Klaipėda University and other schools, as possible. The investment volume is less relevant.
As in the entire Lithuania, in Klaipėda the grant privileges for job creation and staff training are currently valid. The Klaipėda municipality is currently preparing the criteria, which would allow exempting foreign investors from the real estate and land lease taxes under individual agreements.
It is hoped that next year such ruling will be adopted by the City Council. Klaipėda’s best positioned foreign investors are the one from Germany, Sweden, Denmark, Finland, Norway, and Russia.
The Klaipėda district has always been leading among other Lithuanian districts in terms of economic indicators.
According to the Department of Statistics data, in 2008 the Klaipėda district raised ~ 11.2 per cent of Lithuania’s total gross domestic product (GDP). As of 1 January 2010, 6,114 economic subjects were actually active in Klaipėda.
The identity of Klaipėda as a port city remains unshakable and immutable for many years already. Surveys show that the country’s residents view Klaipėda as a port rather than a seaside city for recreation and entertainment.
The fact that Klaipėda currently fails to attract young people (by offering them leisure, work and self-realization opportunities) adds to a breach in the city’s attractiveness. In order to implement the vision of all-round attractive city, Klaipėda still needs to realize a number of social and cultural programs as well as pay more attention to services and promotion of creative business.
“Lithuania is still developing. Currently, I can see here a lot of really great opportunities to invest in any business. And as for a higher competition, everyone will only benefit from it. However, there still are many opportunities to create something new in Klaipėda you will be the first, you see, with no competitors. The price-quality ratio here is better than in Scandinavia. One cannot say that Lithuania is a cheap country, but costs here are indeed lower,” notes the Honorary Consul of the Kingdom of Sweden and Baltic Business Centre Director Joacim Bernhardsson, who have been living and working in the port city for years.
In Klaipėda, success waited upon this company with a foreign ownership, which has been operating for many years already.
Over nine years, after joining the Estonian BLRT, Vakarų laivų gamykla started returning profit. According to the Chair of the Company’s Board Fjodor Berman, one of Klaipėda’s main advantages, among other things, is an ice-free harbour and advantageous geographic location.
“The port infrastructure is already quite well developed, it is sufficiently diversified in its activities and types of cargo and, therefore, able to handle a variety of material flows. The Klaipėda port retains the best value for money position,” Jonas Nazarovas, CEO of long-existing DFDS Lisco has drawn attention to these benefits.
Klaipėdos Smeltė, the first foreign-owned loading company in the Klaipėda port, considers further expansion. According to its Board Chair Rimantas Juška, the Company has ambitious plans for the coming years: creation of an international container distribution centre, to which the 6000-7000 TEU container-bearing ships could come, bypassing the traditional Western European ports.
“Klaipėdos Smeltė is delighted to see issues with the country’s public institutions and Klaipėda State Sea Port Court being resolved rather quickly. A solid experience of the Mediterranean Shipping Company shareholders and partners helps to achieve that.
R. Juška advises foreigners wishing to invest in Klaipėda, not to fear and give the region some credence.
“The business development environment in Klaipėda and Lithuania is not always easy, but then it can be predicted. As evidenced by many examples around the world, often it may become the most important factor,” he believes.
The Philip Morris factory operating in the port city for over a decade is one of the most effective throughout the EU. When speaking about successful investments, modern factory technologies and equipment, the Philip Morris Lithuania director Scott Coutts stressed the importance of qualified professionals as they are a huge advantage in the Klaipėda business. Another great advantage is a nearby port with its good connections to both Eastern and Western countries.
The Orion Global PET CEO O.P. Mishra also believes that there is no shortage of skilled professionals in Klaipėda – here even a new industry could operate successfully after properly training employees as the latter are receptive and rather highly skilled.
Investors engaged in the real estate-related activities see in Klaipėda excellent conditions for developments of their businesses. Among them – BNTP Group with the Irish ownership.
“The Klaipėda city is still developing in many areas, but consumption is rising. The lower wage costs are not the only thing that matters to the manufacturing companies. Some people forget that direct labour costs make only 10-20 per cent of overall manufacturing expenses. Among other costs are administration, transportation, rental, utilities, raw material procurement costs, etc.
That is why Lithuania has the potential to compete for the product manufacturing with such countries as China. If we consider the Western Europe our consumer market, Lithuania would have an advantage, because the business conditions here are more flexible and closer to the consumer, while China is two months away,” notes the BNTP Group Director General James Andrew Clarke.
According to the Albright International Director Kevin Holland, Albright International wished to start manufacturing in the Eastern Europe due to the friendlier logistics and chose Lithuania because of Lithuanians’ desire to help, e.g. the Lithuanian Development Agency has made considerable efforts. The tax benefits were a clear incentive. Besides, Klaipėda’s FEZ was better organized than other free economic zones.
Comfortable logistics and, according to the Director General Dmitri Sobolevski, Lithuanian seaside well-known since the older times of spending holidays here, were among the factors that determined the Belarusian company’s Glassbel Group settlement in Klaipėda.
Not only is Klaipėda attracts by its business opportunities, but also by its sense of community and leisure facilities.
The seaport’s academic environment and cultural life pleases the Vice-Principal of LCC International University Dr. Marlene Wall, and a Klaipeda International Business Club Board member Nicole Scotts notes excellent opportunities for leisure activities and communication of foreign business persons, who joined the club.
Those already having experience would probably advise potential investors thinking of Klaipėda to stop hesitating. The easiest way for the large corporations considering the possibility of starting production here, would be applying to FEZ and discussing all the investment opportunities with professionals.
The smaller ones should speak with Klaipėda’s Economic Development Agency and find a reliable local partner.