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New Factories Spring Up After Downturn 

April 13, 2012, Invest Lithuania
More than 20 Lithuanian and foreign companies are currently building or planning new factories in the country.

Many businesses cut investment during the downturn, but this began to change last year and new factories and production plants are now being built in and around cities in Lithuania, while additional investments are being made in existing production facilities and installations.

According to Invest Lithuania, foreign investment totalled LTL 3 billion in 2011 (representing 2.8 per cent of GDP)  – an increase of 54 per cent compared with 2010.

Most of the projects are being undertaken in the Kaunas Free Economic Zone (FEZ). Ryterna is currently putting the finishing touches to its production facility – a LTL 5 million plant, which will manufacture garage doors primarily for foreign markets. The plant will open this year.

This spring, construction will start on a straw pellet plant on a 2 ha plot within the Kaunas FEZ, which the operator, Enwipellets, hopes will start production next year. In the summer, the Vičiūnai Group will also start work on a fish processing plant and cold storage facility in the FEZ.

The agricultural cooperative Pienas Lt intends to build a LTL 100 million plant on land it owns in the Kaunas FEZ to produce milk and whey proteins for the skincare industry.

Meanwhile, Finnish energy giant Fortum is planning the largest investment of about LTL 700 million in the construction of a cogeneration plant in the Kaunas FEZ and over LTL 400 million in a combined heat and power plant in the Klaipėda FEZ. Both plants will use biofuel to generate energy and heat.

One of the most ambitious projects is currently underway in Naujoji Akmenė, where a new production block is being erected by cement maker Akmenės Cementas. The block will house a new dry process clinker production line. It is expected that the plant’s annual production capacity will increase by about 500,000 tonnes.

Danish company Danspin will create 100 jobs when it invests LTL 41.4million in a yarn production plant in Raseiniai, while the largest number of jobs from a single project will come when the British company, Homegroup, expands its furniture production plant in Klaipėda to create 350 new positions.

Norwegian knitwear maker Devold will soon create 178 new jobs in Panevėžys while new fruit and vegetable processing plants in Panevėžys will each create more than 60 jobs.

Foreign companies increasingly view Lithuania as an attractive place to invest in higher value projects with, for example, Danspin intending to set up a research centre next to its production facility in Raseiniai to study the properties of textiles. A solar cell technology research centre will be built next to BOD Group’s solar cell production plant in Visoriai to bring together businesses with Lithuanian researchers who are improving solar cells and patenting their discoveries.

Lithuania is rapidly building a reputation as an investment-friendly country, thanks to ongoing improvements to the business environment through active legal reform, the adoption of new and more flexible practices and the introduction of additional incentives and privileges. The creation of five new free economic zones (in addition to the FEZs in Kaunas and Klaipėda) offering favourable conditions for investors looking to build new production facilities or to open local operations is a good example of this trend.