Are Baltic Tigers back on track?
Royal Danish Embassy, Vilnius
www.litauen.um.dk
Phone: +370 5 264 8782
Vilma Jarasiuniene
(Commercial Adviser) E-mail: [email protected]
1. What do you know about the Baltics?
2. Intro about Baltic Countries
3. Macro statistics
4. Taxes & Salaries
5. Developments in Purchasing Power
6. Exports from Denmark to Baltics
7. Market indications and possibilities
8. Culture
9. Success story
10. Upcoming events
2.Intro
Lithuania
Latvia
Estonia
Inhabitants
3.244.000
2.050.000
1.340.000
Currency
Litas (euro 2014)
Lat (euro 2014)
Euro
Life-time
(Men/Women)
68,0 / 78,9
68,6 / 78,4
70,6 / 80,8
Ethnicity
Lithuanian: 84 %
Russian: 5 %
Polish: 6 %
Other: 5 %
Latvian: 62 %
Russian: 27 %
Other: 11 %
Estonian: 69 %
Russian: 26 %
Other: 5 %
3. Macro Statistics:
GDP growth, %
9.8
3.1
-15
1.4
5.8
2.5
3.7
9.6
-3.6
-17.7
-0.9
5.5
5.6
3.8
7.5
-4.2
-14.9
3.3
8.3
3.2
3
-20 -15 -10 -5 0 5 10 15 2007 2008 2009 2010 2011 2012 2013*3. Macro Economics
3. Foreign Investment 2012
Realised FDI projects :
27 in Lithuania
7 in Latvia
25 in Estonia
In Lithuania-investments from Denmark and USA created the most
Lithuanian jobs. Mostly in scientific manufacturing, software and
pharmaceutical sectors
In Latvia –investments from Russia, Sweden and Norway in
business services and financial intermediation sectors
In Estonia- investments from Sweden, Hong Kong and Norway in
software, machinery and equipment manufacturing
3. Macro statistics
4.Taxes &
Salaries
Lithuania
Latvia
Estonia
Value added tax (vat)
21 %
21%
20%
Corporate income tax
15 %
15%
21%
Personal income tax
15 %
25%
21%
Social security
Employer
31%
24%
33% + 1%
Employee
6% + 3%
11%
2% + 2%
5. Developments in Purchasing Power, %
Source: Eurostat
0
20
40
60
80
100
120
140
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Estland
Letland
Litauen
Danmark
E27
6. Export from Denmark to the Baltics, 2012
7 . Lithuania: Market Indicators- most attractive sectors
Furniture Metal processing and machinery Textile and clothing• Over 700 companies
• More than 20,200 skilled employees • Attractive salary level, with monthly
average: EUR 572 (Gross)
• More than 700 companies • Over 15,000 of skilled employees
• Attractive salary level, with monthly average (2012, 2Q):
• EUR 654 (Gross)
• Over 1,000 companies
• More than 25,000 skilled employees • Some 2,500 new textile specialists
graduating every year from local high schools
• Attractive salary level, with monthly average: EUR 458 (Gross)
Wood products Engineering
• Involves over 1,000 companies • Over 18,200 employees • Monthly average salary: EUR 542
(Gross)
• Involves over 2,000 companies • Over 50,000 employees
• Able to provide some 5,000 more jobs for new projects, including for outsourcing
• Can use network of business support • Existing: 4 Industrial parks, 5
science/business valleys and 2 Free economic zones (FEZ)
• New: 5 new FEZ established at the end of 2011
• Various schemes of the EU financial support for businesses
• The Lithuanian furniture and wood
products sector has a long history and
are known as being excellent suppliers in both finished products and components. The sector:
• Export oriented and 68% of production
goes to export
• Flexible - more than 98% are SME
companies
• Has good infrastructure: • Klaipeda sea port • Very good roads • Improving railways
• Export oriented 48% of production go to export.
Denmark together with Germany, Norway, and
Sweden are the major import countries • Flexible - More than 90% are SME companies
• Good infrastructure
• Sea port in Klaipeda • Very good roads • Improving railways • Short delivery time
• One of the most specialized and
diversified textile manufacturing industries within the EU.
• Able to provide very specific products and make needed quality tests. The
Lithuanian Textile Institute conducts more than 60 technology tests for quality, hygienic and environmental requirements • Export oriented, more than 76% of
production goes to export • Offers competitive prices
Market indication
Main tasks (part of the National Energy Strategy) re
energy and heat sectors:
Increase efficiency of energy consumption
renovation of buildings (households and public)
–
with reduction of heat consumption by 30-40% by
2020 (in comparison to the level of 2009)
EUR 2.2 billion should be invested
Significant increase part of renewable energy sources in
energy production by 2020
Target 60% of heat production from renewable
23% of renewables in the final energy consumption (current
level – 15%)
Save energy and heat, via
Upgrade of the old energy and heat transmission system
and grid (renovation outdated transmission grid, replacing
old boilers, building CHP plants) by 2020
–
Saving around 3 TWh
–
EUR 0.4 billion to be invested to replace 75% of old
grid.
Provider of more than 80% of the worlds scientific Nano
lasers
Discoveries in bio- nano- technologies, fundamental
physics
Investing in new sectors of economy
World’s No.2 by Internet download speed in 2012
World’s No.6 and Europe’s No.1 fiber-to-the home
(FTTH) optic communication penetration
World’s No.2 by mobile phone application development
Europe
´´´´s densest network of public internet access
points
Europe’s No.7 in terms of using internet for business
1st in the World Competitiveness Rankings for
communication technology
23,8 26,4 29,3 36,4 34,2 26,3 28,6 25,4 27,2 27,6 Sw eden Netherlands Romania Latvia South Korea Singapore Taiw an Luxenbourg LITHUANIA Hong KongInternet download speed in the world in 2012, Mb/s
Market indication – renovation of housing
Renovation of multi-family buildings
Lithuanians spend 13.3% of their income for heating of 50 m2 (to compare in Nordic countries that takes - 1.5%).
National (long term) plan:
To refurbish 24 000 apartment block buildings
After renovation, average energy savings have to reach around 50% per single building
State support program JESSICA, established with target:
1000 multifamily buildings-blocks to be renovated by 2015
After renovation each block should save 125 MWh a year
EUR 290,000 are the estimated costs to renovate 1 apartment block (60 apartments, each approx. 50 sq. m.).
Funds. There are EUR 227 million in the JESSICA Fund - mainly from the EU Structural Funds 2007–2013 and it will be increased further.
Leading municipalities have already initiated the process of renovation using the support funds in
combination with mechanism of loans’
coverage from the money saved for heating.
Latvia: market indication- most attractive sectors
IT Metal Food & Beverages Health & Sciences
- Well-developed export market - State support
- Western work culture - Highly-developed logistic and communication infrastructure - Low prices on electricity - Large investment rate leads to high level of production
- The sector accounts for app. 2% of Latvia’s GDP
- Most enterprises are SME with less than 10 employees
- There are several internationally recognized academic IT institutions in Latvia. App. 1,000 students graduate each year
- Traditionally a leading sector - Easy access to raw materials - Competitive work force - Excellent logistic infrastructure - A shift towards more complicated production is currently happening - The sector covers app. 12% of Latvia’s total export
- Since 2000, the sector has grown more than 250%
- The sector covers a broad range of products from basic metals to electronics, machinery, and equipment for manufacturing medical, precision, and optical instruments
- Largest industrial sector in Latvia, accounting for more than 23% of the value added in manufacturing
- Strong supply chain
- Access to quality ingredients – many ingredients are locally grown
- Ecological agriculture for natural ingredients
- Abundance of skilled and competitive labour
- Industry standards and sustainability Well-developed transit infrastructure
-
Large effort to make improvements in efficiency - Cheap and well-educated work force- New business opportunities within “medical tourism” - Strong R&D capacity - Strong traditions in chemistry - Well-established production infrastructure
- Health care is one of the largest sectors with 50,000-60,000 people employed
Wood Greentech Transport & Logistics
- Traditionally a strong sector - Easy access to raw materials - Qualified work force - Sustainable industry (FSC certification)
- App. 8% of companies registered in Latvia are linked to the forest sector
- More than 1,800 companies in the sector
- The sector accounts for app. 20% of Latvia’s exports and 80% of the sector’s output is intended for export
- Supported by the government and EU - Large experience and expertise in green energy, especially water power - The largest exporter of RES in the EU - More than 40% of Latvia’s total energy consumption is sustainable energy - Renewable energy resources contribute with more than 25% to Latvia’s total exports
- There are several vocational programmes with over 30 degree courses relevant to the sector
- Traditionally a centre for transportation and storage
- Admission to Russian and European markets
- Expected raise in freight volume - Non-biased, e.g. regarding truck transportation
