Lithuania is the target for greenfield investments

07 August, 2020

The plans of international investors have been adjusted due to the Covid-19. Nonetheless, the Lithuanian Government’s press release maintains that in Lithuania “the economic situation remains stable, while the balance between recruitment and redundancies has seen consistent improvement”. To reinforce this message, Mr G. Valuckas, a shareholder and the head of Investment Partner, approaches the situation in the business with cautious optimism and emphasizes that “the quarantine was followed by an even greater interest in greenfield investments”. Foreign companies are rapidly adapting to the changing business environment and are in search of the optimal solutions.

International businesses will explore opportunities to reduce the risks associated with supply chains by shortening and diversifying them. The initial supply shock caused by the reliance on China will encourage companies to improve their supply chain resilience by shifting production to countries closer to the end user and through supplier diversification. The United Nations’ division for trade and development has found that this will be one of the main tasks for multinational companies in order to enhance the supply chain resilience to such type of shock or other trade restrictions. It has been noted that the need for the businesses to review their supply chains has not only been brought by the pandemic, but also by the global trade wars, growing demands for supply chain sustainability from consumers and customers and other potentially emerging future trends. The changing corporate cost structure, affected by robotics and other factors, with the investments in fixed assets playing an increasingly pivotal role, will reinforce the nearshoring trend. This opens up the prospect for Lithuania of attracting new greenfield investments to be made by the companies shifting their production capacity from China to the Central and Eastern European region, which will be highly appealing to such investments due to its geographical location, high level of staff competences and attractive investment environment.

Success Story

Investment Partner, which manages the Šiauliai and Kėdainiai FEZ, has been gradually implementing its development plans as its expertise gained in 2019 attracting foreign companies speaks of success in terms of performance.

At the end of 2019, Bär Cargolift, the second largest German manufacturer of cargo lifts, made the decision to invest in the Šiauliai Free Economic Zone. The building works will commence in the 3rd quarter of 2020. The plant is planned to be built in several stages: the first stage will see the construction of production and administrative premises, including a conservatory, while the second stage is scheduled to see the expansion of the administrative premises and having them connected with the conservatory. Subsequently, the company has arrangements for developing its research and development business with the focus on software engineering and mechanics.

The factory owned by UAB “BAR Baltic Production” in the Šiauliai FEZ will create over 80 jobs and will have a potential production capacity of 3,500t of vehicle cargo lifts per year.

Bär Cargolift designs, manufactures, sells and maintains goods lifts for trailers and lorries. The latter are designed for loading and unloading goods stacked on pallets. Until recently, Bär Cargolift has been selling its products mostly across Europe and Russia. As its production volumes increase, Bär Cargolift plans to launch in Australia, the USA and South Africa.