Export, Latvia, Markets and Companies

The president of the company Zigmunds Meznieks confirmed to the newspaper that the company is planning to open a factory outside of Latvia, but pointed out that he does not wish to comment further before the project is complete, writes LETA.

According to information obtained by the newspaper, the factory will be constructed in a country in Western Africa, and could already be complete within the next two months.

As the newspaper Dienas Bizness reported this past February, Kometa has decided to halt its production in Latvia.

As Meznieks pointed out at the time, the company had suffered a major blow from the state of Latvia and partners already in the beginning of last year. Prices of aspen tree raw materials increased three to three-and-a-half times, while prices of energy, workforce and other production services grew even faster than the prices of ready-made production.

In 2006, the average price the company paid for raw material bought from Latvian companies was LVL 20 per cubic meter, while in the first half of this year, the price of raw materials taken from state forests reached already LVL 63-76 per cubic meter. In the beginning of 2007, energy prices grew 18%, with a further 38% increased planned later on this year.

Other burdens for the company’s work include increases in real estate tax and public utilities payments, and unavoidable salary rises for employers.

“These processes made us carefully re-consider the company’s further development, and a decision was made to halt production of matches in Latvia,” admitted the company’s head. The decision only concerns Latvia, since the company will continue producing matchwood for its export markets, relocating its production facilities to a country, where it would be economically more advantageous.

In 2007, the company halted production of matches and released 105 employees, as Db newspaper informs. Currently, Kometa only produces matchwood and the so-called advertising and promotional matches and matchboxes. Production of matchwood will be terminated soon as well.

Year 2006 for Kometa had been the most successful year in the company’s history. The company exported its products to 20-25 countries in Europe, Africa and the United States, and managed to stand the intense competition in many international tenders.

Up until 2007, in terms of output, the company was the largest producer of matches in the Baltic States. In the 15 years of its existence, the company successfully boosted its production output nearly four times. This can also be seen from the company’s income form operations, which in the beginning of 1992 was LVL 1.25 million, but in 2006 comprised already LVL 4.21 million.