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Thursday, 25.04.2024, 06:04
Klaipeda FEZ companies responsible for 3% of Lithuania's exports and FDI
Let’s start with “The King”, gross domestic product. Even though this
measure is more complicated than simple revenue, we can compare the Lithuanian
GDP to the total revenue of the FEZ companies. The GDP of Lithuania last year
was 45.2 bn EUR, while the total FEZ company turnover was 1.2 bn,
which is 2.65% of the total Lithuanian GDP. It would be even more impressive
when comparing the FEZ with the total GDP of the Klaipeda county, where the
turnover from the FEZ companies accounts for around 22%.
When it comes to exports, the Klaipeda FEZ contribution can be counted
even more accurately. The Klaipeda FEZ companies exported products worth 610
million EUR, which equals 2.15% of all Lithuanian exports. This share would be
even bigger after removing one-time technical details, like a big FEZ investor
deciding to formally export its products through a subsidiary operating out of
another city. Undoing this decision would grow Klaipeda FEZ exports to 850
mln EUR or a 2.95% share Lithuania-wide.
The FEZ is even more influential when counting foreign direct investments
(FDIs). By the end of 2018, the Klaipeda FEZ collected 634 mln EUR in FDI,
which accounts for 66.7% of all foreign direct investments in the Klaipeda city
or 50.4% after expanding to the Klaipeda county. The Klaipeda FEZ share in
nation-wide FDI statistics accounts for 3.73% of the total.
Klaipeda FEZ has posted an increase of its contribution share in most of
the metrics since last year: the numbers of 2018 are 0,46 p.p. bigger for
country GDP, 0,23 p.p. bigger for Lithuania's exports (excluding technical
factors) and 0,25% bigger for the accumulated FDI in Lithuania. City and
county-level metrics have also increased accordingly, while the number of
employees working in the FEZ territory also grew by around 7%.
Klaipeda FEZ is also an important employer. If all investors operating
out of the FEZ and employing 3,453 people were consider to be a single company,
it would be the eighth largest employer in Lithuania. When we add up the other
people working at other companies operating out of the FEZ, this organization
would have 5,500 employes and be the fifth largest employer in the country,
slightly behind the IKI market chain but bigger than Lietuvos pastas (the national
postal service).
If Klaipeda FEZ was a united entity, it would be the biggest employer in
the port city and the entire region of Western Lithuania. Out of the 80,100
people capable of work in Klaipeda, one in 15 works at the FEZ. Statistically,
this number should be 1 in 7, but we understand that people commute from
Klaipeda region, Kretinga, Silute, Palanga and other districts to work at the
FEZ.
Zygimantas Mauricas, the Chief Economist at the Luminor bank, comments
that the added value created by the industrial sector is only the tip of the
iceberg because it creates work opportunities for other sectors as well.
“Every euro in added value created in the industrial sector creates two
more euros in added value for other sectors: transportation, wholesale and
retail, services, agriculture, finance, real estate, construction and energy,”
says Z. Mauricas. “Keeping in mind that the majority of all Klaipeda FEZ
companies are industrial, its total effect on the Lithuanian economy is around
three times more significant than its direct contribution. In other words, the
Klaipeda FEZ is, in a way, the spine of the regional economy, holding together
its form.”
Eimantas Kiudulas, the CEO of the Klaipeda FEZ, agrees that the numbers
show that the Klaipeda FEZ is a vital business hub in the region and Lithuania
in its entirety.
“Invest Lithuania’s Free Zone Report showed this spring that Lithuania’s
direct and indirect investments into free zones result in the country directly
getting three times more out of it,” says E. Kiudulas. “It is also important
that the numbers are not a statistical mind trick, our companies not only
operate in a shared territory but are also building connections,
experience-sharing initiatives and other projects together, as well as joining
forces when making purchases. We are a community, which allows us to celebrate
both common and our own results.”
At the moment, the major industries among the companies operating out of
the Klaipeda FEZ are plastics, electric components and transportation, food
processing, assembly, logistics, as well as some others. Some of them are not
only manufacturing in Klaipeda, but also started R&D laboratories, centres
for research, improvement and competency growth. In the short-term, the Klaipeda
FEZ will aim at strengthening its position in alternative transportation and
renewable energy sectors.