Lithuania on 3D globe

Lithuania on 3D globe

Energy / Europe / Gas / Technology / Travel

Shining a light on Lithuania – the Powerhouse of the Baltic

By John Osborne www.johnosbornejournalist.co.uk

Lithuania is one of the tiger economies of the Baltic. In September 2019 John Osborne, a freelance industrial journalist, visited Lithuania on a trip organised by Klaipėda ID, the investment promotion agency of the city of Klaipėda, Lithuania. He considers the appeal of the country to tourists and investors.

Copyright: <a href="https://www.123rf.com/profile_esvetleishaya">esvetleishaya / 123RF Stock Photo</a>
Dane river, embankment and red brick houses Klaipeda, Lithuania

Once part of the Soviet Union Lithuania has been part of the Eurozone since 2015. The Lithuanian language can be challenging to native English speakers but English is widely spoken. The country boasts meandering rivers, dense forests, and plenty of opportunities for recreation.

One of the most popular areas to walk is the Curonian Spit. TrueLithuania.com says the spit is 2 km wide and 98 km long. The Curonian Lagoon separates the spit from mainland Lithuania.

According to TrueLithuania.com the Curonian Spit has for centuries been “an area of massive travelling dunes, the so-called “Lithuanian Sahara”. Its few fishing villages used to be ephemeral: over 10 of them are known to have been consumed by the moving dunes.

Some large dunes remain. However, since the 19th century, the landscape has been dominated by pine forests, a titanic successful attempt by the locals to tame the nature.”

The former fishing villages of Neringa are now resorts. Their lagoon coasts are lined by numerous wooden vernacular style ex-fishermen homes, some still adorned by thatched roofs and many housing small family-owned guesthouses and restaurants.

Few people fish for subsistence today. However, fishing and other boat-based activities, as well as the fish-heavy cuisine, are now enjoyed by tourists.

According to TrueLithuania.com holidaymakers have been attracted to the area “since the 19th century when the Curonian Spit (then part of Germany) was “discovered” by German artists and politicians.”

In addition to tourism Lithuania has been working hard to attract more investment. Klaipėda free economic zone (FEZ) is the oldest and largest free zone in Lithuania, located at the northernmost Baltic ice-free port with extensive road, rail, and air links to both the European Union and CIS.

Currently, more than 30 foreign investors operate in Klaipėda FEZ, generating more than 1.2 billion Euros in sales and exporting goods worth more than 600 million Euros annually. Also, the Klaipėda FEZ investor and business community employs more than 5,400 people, representing 5.5% of Klaipėda’s working population. The accumulated investment in Klaipeda FEZ since 2002, mostly foreign, currently accounts for more than 630 million Euros.

Record 2018

2018 was a record year for Klaipeda FEZ with a 20% increase in total investor turnover to 1,239 billion Euros.

Historically, Klaipėda FEZ has specialised in plastics and chemical industries (with investors such as Indorama Ventures and Neo Group) electric components (Yazaki) and food processing (Espersen). However, in recent years, biotech, clean tech, and some innovative companies have launched operations in the zone.

Klaipėda FEZ provides ready-to-use production facilities, offices, and warehouses, sites with approved construction permits, a range of on-site construction, infrastructure and human resources.

Landbanking which Wikipedia defines as “the practice of aggregating parcels of land for future sale or development” is not allowed in a bid to stimulate real growth and to encourage and stimulate the local economy. This controversial practice has blighted many towns and cities in the United Kingdom and the Lithuanians are determined to ensure it will not occur in their country.

In 2017, the zone announced its FlexStart project, a 6000 sqm specialized industrial building, ready to accommodate investors who want to launch their operations in less than three months. According to Klaipėda ID the building was fully booked with small and medium-sized manufacturers in less than a year after the announcement. The second FlexStart project is planned for 2020.

The companies established in the Klaipėda FEZ are not only growing manufacturers but also big buyers of supplies from other Lithuanian companies. Throughout the last year, the Klaipeda FEZ investor community made purchases in Lithuania worth 321.1 million Euros, a 27.9% increase over 2017.

The taxes paid by FEZ companies have also almost reached the symbolic 100 million Euros mark, with the recorded 91.8 million Euros, three times more than the number recorded in 2017. The majority of this change was determined by the VAT paid by the FEZ companies, from 7 million Euros to 64.3 million Euros. Additionally, social security and personal income tax numbers also grew, from 18.1 million Euros in 2017 to 25.2 million last year.

Lithuania at a glance

  • The location of Lithuania, coupled with its flexible, well-developed logistics networks, allows for fast, efficient and cost-effective delivery to the EU and the CIS markets.
  • Klaipėda has one of the five largest ports in the Baltic Sea, and is capable of accommodating ships with a maximum draught of 13.4 metres, and handling up to 47 million tonnes of goods a year.
Klaipėda FEZ facts and figures:
412 hectares.
30 investors and 100+ companies.
5400+ jobs.
600 million Euros Foreign Direct Investment (FDI).
1 billion + Euros annual sales.
700 million Euros exports.
3% of Lithuania’s GDP.

A versatile approach to a worrying problem

Dancer, an electric bus is perhaps one of the most innovative products that has been produced in Klaipėda. Developed by JSC Vėjo projektai, the company claims it is 20% to 30% lighter than normal buses because composite materials are used.

Another attraction for fleet operators says JSC Vėjo projektai, is the charging time. The firm claims that the bus can be charged in less than 10 minutes, during the driver’s rest breaks.

Also, it is equipped with the Dancer Monitoring System. The DMS allows online tracking of the bus and is designed to detect potential technical problems.

Composites have been used for thousands of years but they have still to be widely accepted in vehicle manufacturing. Arguably the biggest challenge the composites industry has faced is changing the way the materials have been made. About 20 years’ ago it was very much a cottage industry with many PhD designers. Plastics were largely seen as specialist materials only suitable for making small parts of a vehicle such as the bumper.

Dancer’s designers claim they have achieved a breakthrough because they claim they have worked out to mass produce an electric bus. Understandably they are coy about revealing details of the processes.

Another achievement is that they are attracting more young people into the business of designing and manufacturing using composites. For this industry to thrive it needs plenty of young engineers, not necessarily highly qualified academically, but possessing the skills and vision to translate bold designs into lightweight buses that can be built using off the shelf machines.

Klaipėda LNG terminal is breathing new life into the city’s port  

In December 2014 the Klaipėda LNG terminal started functioning. Operated by KN (Klaipėdos nafta) is one of most important facilities in Lithuania. It has enabled the formation of a natural gas market in Lithuania and opened opportunities for the country to import natural gas from all over the world. Now customers can receive the gas from various suppliers at market prices.

FLNG
FLNG

The LNG terminal consists of a floating storage regasification unit (FSRU) named Independence, a berth and a gas pipeline. The FSRU was built by Hyundai Heavy Industries Co., Ltd., a South Korean shipbuilding company, and is owned by Leigh Höegh LNG (Norway). It is permanently moored to a berth in the Klaipėda Seaport. The LNG terminal is connected to the natural gas transmission system.

Characteristics:

  • Third parties have access to the capacities of the terminal.
  • Attractive regasification tariff rates promote the development of the natural gas market in the country, whereas the LNG handling rates create competitive conditions for small-scale LNG operations.
  • Klaipėda‘s port does not freeze, which guarantees smooth navigation and continuous handling all year round.
  • LNG used for process needs is allocated to terminal uses based on actual consumption.
  • Storing the minimum gas quantity on FSRU means that the terminal is always ready for operation.
  • The infrastructure is suitable for both regasification and LNG transfer.
  • The terminal enables the reservation of the spare LNG regasification and transfer capacities depending on the demand and technical capacity of the terminal.

KN also focuses on development of small-scale LNG value chain in Klaipėda. The LNG supply chain in Klaipėda consists of the LNG reloading station, the LNG terminal and Kairos, the LNG transport and bunkering vessel.

Put into operation in the end of 2017 LNG reloading station became the LNG value chain axis. The LNG reloading station (LNG RS) is an on-shore LNG terminal operated on a third-party access basis, which is designed for accepting LNG from small-scale carriers, for temporary storing it and loading it to LNG trucks or vessels. LNG may also be loaded into containers of standard size compliant with ISO, which may be transported by rail and by road.

LNG can be imported to the LNG reloading station from Klaipėda LNG terminal or other terminals in the Baltic Sea or the North Sea.

LNG reloading station enables the development of the LNG infrastructure in the Baltic States and Poland. Off-grid consumers are guaranteed with energy supply and opportunities to use the advantages of clean energy.

Furthermore, development of small-scale LNG infrastructure enables the use of LNG as a clean fuel in shipping and heavy road transport.

Lithuania is a fascinating country with a rich heritage and bold ambitions. Inexpensive flights and support for investors are helping to transform this vibrant economy.

For more information

John Osborne
Freelance Industrial Journalist
119 Thoresby Street
Hull
East Yorkshire
HU5 3RB
United Kingdom

Tel: +44 (0)1482 442919
Mobile: +44 (0)7523 085505
E-mail: john@johnosbornejournalist.co.uk
E-mail on +44 (07523 085505): johnbookssea@gmail.com
Web: www.johnosbornejournalist.co.uk
Skype: john.journalist

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One Comment

  1. Pingback: Dancer | » Response from international business journalists visit to Klaipeda FEZ

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