Having turned the open field into a thriving business community over two decades, the team of the LEZ management company hopes for further transformation of the area – even more developers and innovators.
The origins of the Klaipėda SEZ can be found already in the first years of its restoration, so the development of the SEZ partly reflects the progress and history of modern Lithuania: the unknown of the first decade, the Euro-Atlantic optimization of the 2000s and the rise to a high-income and innovation economy in the last decade.
Since the restoration of independence, Klaipėda has been almost the most favorable for the development of large-scale new business in Lithuania: it is perhaps the geographical point farthest to the West and the only port city in the country with centuries-old production and entrepreneurial traditions.
In addition, there were no problems with the return of land in Klaipėda – on the contrary, the eastern areas of the city have already been planned for industrial use.
Then it is not surprising that the first free economic zone of Klaipėda was tried to be established back in 1992. The author of this initiative is Vytautas Paulius, a Lithuanian from the USA, from the company “V. Founder of Paulius and Associates.
iAt that time, both the Government and the Klaipėda municipality were interested in the idea, but eventually this idea faded everywhere due to the lack of a legal base and strategic ports in the country.
1993-1996 LEZ initiators and enthusiasts carried out extensive educational activities: high-ranking international visits were organized, various working groups were formed, discussions and debates took place.
in 1995 the legal prerequisites for the establishment of free zones were adopted after creating the law on the basis of the SEZ, defining taxes, customs duties and other benefits, and establishing the predecessor of today’s Klaipėda SEZ management company – “Klaipėdas vystymo grupė”, which prepared the business plan of the free zone and the technical, administrative and other “foundations” of the SEZ.
in 1999 in October, the Government adopted an economic resolution regarding the project of national importance for the recognition of the Klaipėda SEZ – this allowed to solve the land, infrastructure and countless other first challenges much faster.
The first investors
A lot of the initial headache for the Klaipėda SEZ management company was caused by the infrastructure – access roads, electricity, water, gas, etc. More than one potential investor said then that they would consider Klaipėda only when there was infrastructure, and to the first interested ones, the LEZ team showed promises and promises in the exact sense of the word.
in 2002 the beginning of the activities of the SEZ management company was not only announced de jure but also signed the first contracts with foreign investors. Siemens – Yazaki Wiring Technologies Lietuva, which had previously operated within the boundaries of the territory, became the first client of the LEZ – for it, obtaining the status of a LEZ investor helped save more than 200 jobs.
In turn, the first greenfield investment, i.e. completely new and developed on an empty plot, was the Danish fish processing company Espersen’s factory.
LEZ old-timers remember that the arrival of Espersen was a turning point – the first “earned” cash flows appeared, information and recommendations began to spread by word of mouth, infrastructure development accelerated.
Espersen even set certain conditions regarding the creation of the infrastructure, and their implementation paid off handsomely: it became much easier to interview other companies in the prepared territory.
The first LEZ superproject – the PET granule factory of the Thai company “Indorama Ventures” – began to mature in Klaipėda around 2003, when Lithuania was not yet a member of the EU.
For the company, this was the first step in Europe, the investors supply other countries as well as other Lithuanian cities.
The then President Valdas Adamkus and other top officials of the country put a lot of effort into the implementation of this project, whose actions improved Lithuania’s image and increased its credibility.
Finally, Indorama in 2004 started more than 100 million construction of greenfield investment worth EUR, 2006 started its activities and is developing successfully until now.
After Lithuania joined the EU and had its first customers, both new investors and infrastructure development accelerated. The SEZ management company igijo can use various EU funds.
2003-2009 During the period, such companies as “Klaipėdos verslo parkas”, “Retal Baltic Films”, “Mestilla”, “Pack Klaipėda”, “AD REM LEZ”, “Albright Lietuva”, “Vingės logistika”, “Gren” were located in the Klaipėda SEZ. former Fortum), Klaipėdos Skuba, Glassbel Baltic and NEO GROUP.
Toksoi’s portfolio seems to have far exceeded the initial expectation of the SEZ developers in terms of investments, jobs, paid taxes and other contributions to the Lithuanian economy. However, the second decade of activity of the LEZ brought no less changes.
The great ongoing transformation
It is obvious that the creators of the Klaipėda SEZ primarily developed the territory as a traditional production area.
For some, it was attractive to produce products under more favorable conditions, investors for the Western European market are easily appreciated, and before the Russian crisis, a part considered that it would be convenient to sell the products made in Lithuania in the CIS countries.
Of course, at the dawn of the Klaipėda SEZ, the SEZ team and the country’s political party visited a number of free zones in the West – the Netherlands, Ireland and elsewhere, and some of these objects were not more like production zones, but science and technology parks, which sometimes had fewer laboratories and computers than production lines or “machines”.
Although the first SEZs were mostly interested in infrastructure, transport, taxes and the supply of workers, Klaipėda was already “sold” as a university, engineering and developer city.
But it is understandable that at the beginning of the activity and in the literal sense of the word, in the open field, the creators of the LEZ primarily sought to have an activity and a business, so it was still early to talk about any priorities.
However, the long-time head of the Klaipėda SEZ, Eimantas Kiudulas, notes that it was during the investor’s decade of activity that existing and new desires to do more emerged: not only to produce, but also to create.
This great transformation of the Klaipėda SEZ is still going on: laboratories, investors and competence centers are multiplying all over, and some of the latest ones, such as the electric bus developers Dancer, are truly businesses based on innovation and high technology.
“I think it’s not even worth it, we need to talk about the progress Lithuania has experienced for 2 decades.
In 20 years, we have gone from the Russian crisis to the club of the most successful states in the world, but this is not a miracle or a coincidence, but the result of many other smaller changes: the infrastructure of our country, legal and tax environment, people’s abilities and thinking have improved rapidly.
Every new skill or good change has purposefully contributed to the fact that we now live in the idea as we did two or three decades ago”, says E. Kiudulas.
According to him, it is talents that will determine the development of the SEZ, Klaipėda and the whole of Lithuania in the next few decades. During the last 10 years, we have proved to the world business that we can not only produce, but also create.
It is natural that a business that is convinced of this wants even more, so Lithuania must ensure that there is no shortage of developers.
Contribution to economic progress
Klaipėda SEZ begins its third decade of activity with 44 Lithuanian and foreign companies with investor status, implementing or planning 782.7 mln. EUR investments and created about 2300 jobs.
Including other companies located in the territory of the SEZ, there are a total of about 5,000 employees working in the zone.
Although SEZ companies benefit from certain benefits, they pay back the state in less than a year. For example, during the entire history of the SEZ, about 70 mln. EUR of various aid and benefits, but last year alone, the amount of taxes paid by investors was 75 million. EUR – exceeded the above-mentioned indicator.
At the same time, other important places and national economic indicators are important for the Klaipėda SEZ: last year’s investor turnover (EUR 1.22 million) and export (EUR 594 million) are close to 2% of the GDP and export results of the entire Lithuania.
In addition, the Klaipėda SEZ business community is a large “client” of other Lithuanian businesses – investors’ purchases of goods and services in Lithuania in 2021. amounted to almost 270 million EUR.
According to E. Kiudula, these are all strong numbers, but an even more important contribution of the LEZ community to the city’s progress is “human” – with knowledge, opportunities, partners and inspirations.
“LEZ investors and the management company in Klaipėda have implemented countless initiatives and partners: internships, apprenticeships, scientific, social, development, networking and other programs over two decades.
In Lithuania and beyond, Klaipėda is famous as a compact, but united and quickly welcoming community. I believe that in the coming decades, we will all successfully pursue the main strategic goal – an ecosystem of highly qualified talents”, says E. Kiudulas.
In recent years, the Klaipėda SEZ has been an extremely active partner of the community of residents – a joint odor monitoring and air flow modeling project has been implemented, well-being and social initiatives devised by residents have been supported, actively participating in discussions.
The efforts of the Klaipėda SEZ in the fields of sustainability, social and innovation have been repeatedly awarded in international rankings, including the “Financial Times” group’s “FDI Intelligence” world free zone award.
In addition, the Klaipėda SEZ business community is favorably evaluated by the city’s residents – this was revealed by the 2021 Civitta’s first reputation study.
According to E. Kiudula, the development and attraction of talents is an extremely complex issue: they need not only a university, but also quality of life, an attractive environment, and professional challenges.
“The Klaipėda SEZ business makes a significant contribution to the development of the city through taxes alone, but that is not enough for us. In various ways, we strive to make Klaipėda the most attractive place to live, work and create.
And if in the first 20 years we contributed to Klaipėda’s success, then in the next two decades, the city’s success and progress will determine where we will be. Therefore, we will put all our efforts into the success and progress of our city”, says the head of the Klaipėda SEZ.