In 2013, Invest Lithuania had its best ever results; 22 projects were started with the creation of 1,547 new jobs – 37 per cent more than in 2012. Over the first half of 2013, 13 new projects were attracted providing 777 new jobs. During the same period this year, plans for 13 new projects were finalised but this time the number of new jobs is 1, 423 or 83 per cent more than last year.
Among these 2014 projects, investments in the production sector are prevalent. 6 investment projects have been attracted to the manufacturing field, which will create more than 520 new jobs. For example, Advantec, a Norwegian oil and gas manufacturer began operations in Klaipėda Free Economic Zone (FEZ) this spring. The company originally planned to create 25 new jobs in Lithuania; however, it soon increased this number. The Finnish reinforced concrete (RC) manufacturer Peikko has also announced an expansion of its operations in Kaunas, originally established in 2006. Peikko plans to invest LTL 17 million in a new manufacturing plant, creating a projected 60 new jobs.
According to Arvydas Arnašius, Director General of Invest Lithuania, an increasing number of investors look for competencies in Lithuania instead of a low manufacturing price: ‘We are no longer a country of cheap manufacturing; foreign investors appreciate our competencies, logistics infrastructure and convenient location. Companies that already have a presence in Lithuania are relocating not only the manufacturing of individual parts of their production, but increasingly the technologically more complex manufacturing of whole products, to their Lithuanian subsidiaries. Newly arriving investors are also looking for manufacturing which is able to guarantee impeccable precision,’ – Mr Arnašius says.
He states that big production projects are especially important to the Lithuanian regions: ‘Lithuanian districts have certain centres of competencies that have developed historically. For instance, the unemployment rate in the district of Panevėžys was 16 per cent last year, however, the competencies that this district has accumulated in the field of electro-mechanics helped attract the Finnish electro-mechanic giant PKC in 2014, with the creation of 320 new jobs. Recently, the Swedish company Pelly has announced the establishment of a new production line in Garliava which will utilise the latest technologies; the company produces metal baskets for wardrobes and other container systems.’
Invest Lithuania pays special attention to the attractiveness of the regions of Lithuania for investment: special training events are organised in local government authorities, marketing consultations are provided, and sharing good experience is promoted in work with investors. ‘Investors choose where to establish themselves, and nobody can promise that there will be investments in the regions. Nevertheless, we can help different districts to learn what their strengths are and discover how to present them to investors, as well as assist municipalities in providing good quality services that would encourage foreign companies to expand,’ ‒ Mr Arnašius explains. – ‘At present we are creating a competence map which summarises the skills and competencies available in every district. This will help the regions specialise according to their competencies and to communicate them clearly.’
Lithuania remains a popular location for investment in service centres. Over the first half of 2014, three big investment projects were attracted with the creation of more than 800 new jobs. Among them is American company Intermedix, which is establishing a big service centre in Kaunas. The company, which provides databases and IT services for the health protection field, has chosen Lithuania for its first offshore office in Europe. It has also been recently announced that Lindorff will create a new credit management centre. Other foreign companies have also expressed an interest establishing their service centres in Lithuania. Lithuania has huge unused potential in this field. In Krakow, for example, there are 91 service centres for 10, 000 inhabitants. In Vilnius, there are 61, whilst in Kaunas there are just 13. ‘The main factors attracting investment in service centres are a well-developed communications infrastructure and specialists fluent in several languages. We have noticed that more and more companies want to move more complex functions of their activities to Lithuania. However, to attract such investments it is necessary to have employees that speak several foreign languages. Currently, Scandinavian languages and German are the most marketable,’ – Arnašius says.
Most of the investment projects attracted in the first half of 2014 are from Norway and the USA. Invest Lithuania’s pro-active marketing strategy has prioritised these markets.
Another noticeable trend in 2014 has been the entry of businesses developing creative IT and design solutions. There have been announcements from the Russian game developer Game Insight and the Ukrainian Charlie Oscar in the first half of 2014; with a number of other companies considering Lithuania for their headquarters.
According to Mr Arnašius, pulling in game developers to Lithuania has been one of the priorities of Invest Lithuania: ‘Lithuania has a well-developed communications network and high-quality programmers and designers, so we had no doubts about our competitive advantage. Our work soon bore fruit – developers from neighbouring countries followed Western style business principles and, without thinking twice, chose a stable business environment and the opportunity to reach EU consumers faster. The games industry is a rapidly expanding market globally, therefore, Lithuania – which up to now has had a small but talented community of game designers – can definitely develop a nucleus of skills and competencies in this field and take advantage of its talents.’
At the moment Invest Lithuania is working with more than 170 potential investors interested in Lithuania. It is very likely that at least 5 of them will commence operations in Lithuania, creating 730 new jobs. According to Mr Arnašius, the last half-year has seen important steps taken in improving the Lithuanian investing environment: ‘Changes in territory planning, a reduction of the administrative burden in labour relations and amendments to the procedures for employing high-quality specialists from third countries have undoubtedly increased Lithuania’s competitiveness and attractiveness for investors. Nevertheless, the competition is huge; so we have to work with a clear understanding of the significance of foreign investments to the economy of our country. To this end, we are currently drafting a national strategy for the development of investments in Lithuania, where clear goals and priority markets and sectors in which Lithuania has a competitive advantage will be set down. In addition, the strategy will provide for specific concrete measures for the attraction of investments in the next 5–10 years. This strategy will have to be approved by the Ministry of Economy and the Government. I have no doubt that this strategic approach, combined with the political will to make decisions that are significant for the investment environment, will help ensure continued improvements in results in the future.’