Lithuanian traditional engineering has high potential to offer to French manufacturers

2021-08-31
Lithuanian traditional engineering has high potential to offer to French manufacturers

Lithuanian industry stronger than ever in the aftermath of pandemic

Although Lithuania is better known for Vinted and booming Fintech sector, traditional industry is a strong backbone of the Lithuanian economy – approximately 21 % of GDP is generated from manufacturing activity in the country. About 75% of Lithuanian engineering / technology industry products are exported and accounts for 23 % of total Lithuanian exports. Main export directions are mainly Europe.

During the peak of the crisis and the lockdown, the stagnant supply of goods from China affected some of the Lithuanian manufacturers, turnover of companies working in metal subsector has dropped by 10%, while plastics sector showed a dramatic demand and increase. In the long run, the whole engineering sector in Lithuania has rapidly adapted to the changing situation and well-managed the crisis. Some of the companies have taken advantage of the opportunity to receive new orders, as production relocations from China to Europe became more frequent, therefore Lithuanian companies had an opportunity to enter new supply chains.

According to Mr. Darius Lasionis, CEO of the Engineering Industries Association in Lithuania LINPRA, there is no doubts, that manufacturing sector has been and will remain the driver in the post-COVID Lithuanian economy: “Being in the centre of Europe and with the current companies’ capacities we have the potential to become the small European manufacturing hub, able to correspond to the needs of European manufacturing leaders. Export volumes are annually increasing, which proves that Lithuanian engineering SMEs have much to offer, are ready to welcome reliable partners and find new export markets. France is one of the TOP directions for Lithuanian manufacturers”.

Even hit by coronavirus, Lithuania’s industry recovered and boosted country’s economy

  • The industry withstood the first wave of coronavirus in 2020 with Lithuanian economy shrinking by merely 1,8 % in 2020, which is one of the lowest in the Euro area (felt by 8,3 %) and according to OECD Lithuanian GDP is projected to grow by 4% per annum in 2021.
  • In Lithuania, the contribution of industry to the economy is higher than the EU average, and this has increased the resilience of the Lithuanian economy during pandemics. Industry here accounts for about 21 % of the Lithuanian economy, compared to the EU average of 19.3 %.
  • To respond to COVID-19, the country provides state-level assistance to manufacturers to remain competitive, maintain liquidity, promote exports. Emphasis is placed on priority measures such as: digitization and reorientation of industrial enterprises, attracting new investment, retraining workers in high value-added areas, introduction of renewable energy sources.
  • According to EU guidelines, at least 36 % of the European Economic Recovery Plan will be dedicated to climate change and 20 % to digitalization. This is an opportunity to make 2021 the year of European industrial recovery.

Lithuania is getting attention as a convenient manufacturing hub in the middle of Europe

Lithuania has a lot to offer to French industrialist, shortened supply chain give Lithuania a chance to become a small European factory – foreign companies seek to shorten and diversify their production chains, therefore turn their eyes to European countries, such as Lithuania within EU economic zone and stable political environment.

One of the major qualities of Lithuanian manufacturers is their flexibility and excellence. Most Lithuanian engineering companies are SME, so it is easy to quickly re-orientate and adapt to clients’ needs, produce both in small as well as large quantities, adapt to overall global situation and trends. In addition, Lithuania has high standards of the Northern Europe alike business culture: versatile and reliable business relations, motivated and highly skilled workforce, high quality and innovation are the dominating characteristics. That is visible in the R&D expenditure that has been significantly raising in the past 10 years.

Another reason to work with Lithuania is convenient geographical location – Lithuania is a transit country. The delivery time is relatively short – within 2 to 4 days to all directions in Europe with well-developed transport system: international airport; seaport; rail transport; road transport.

And last but not least – Lithuanian engineering companies are being a part of Industry 4.0, they have an extensive experience working with automotive companies in Europe. Digital transformation, innovations, R&D, automation are integrated in the processes and are being promoted as priorities on the state level by the Ministry of Economy.

The interests of the Lithuanian engineering sector are represented by LINPRA, it unites over 120 organizations, among which manufacturers in metal products, machinery and equipment, electro-mechanics and electronics, plastics and rubber industry companies, technology service providers, educational institutions.

Lithuanian industry in numbers

  • Among TOP 5 in Europe (among TOP 10 globally) in terms of industrial attractiveness, according to Manufacturing Risk Index 2019.
  • About 21 % of GDP is generated by industrial activities (6% by high-tech industry)
  • 75 % of production is exported

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