A Record Year at Klaipeda FEZ: 1.2 billion EUR in Revenue, Record-breaking Purchases, and Paid Taxes

2018 was the best year in the Klaipeda FEZ, the total revenue of the 34 investors established in the zone was 1.239 billion EUR, a 20% increase over 2017. The last year also broke records in exports, purchases in Lithuania, as well as taxes paid.

The companies established at the Klaipeda 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 carried out purchases in Lithuania worth 321.1 million EUR, a 27.9% increase over 2017.

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

Eimantas Kiudulas, the CEO of the Klaipeda FEZ, comments that the numbers of the Klaipeda FEZ grew five times faster than the overall Lithuanian economy, which shows the competitive strength of the FEZ companies in the modern global markets, as well as the undeniable advantages of Klaipeda’s business environment.

“2018 makes us happy in two ways: our huge long-standing investors burst forward but we have offered some already successful solutions for small-medium manufacturers also with our quick launch projects. We are also to determine to provide better conditions for not only manufacturing but high value-added activities as well. We are looking to work towards improving manufacturer laboratories and R&D centers because they are the key towards higher added value businesses and jobs not only in the future but in the present as well. This is why we are encouraging and actively looking for a dialogue with institutions of higher learning, municipalities, and representatives of the state. Suitable conditions for innovation are required not only when attracting new investors but holding on to the already existing ones as well,” says E. Kiudulas.

Due to technical reasons, the exports numbers recorded by Klaipeda FEZ companies in 2018 dropped to 610.2 million EUR, 108 million EUR less than in 2017. This change was determined by a decision by one major exporter to formally carry out most of its export operations through a secondary company. After compensating for this, the total exports numbers from Klaipeda FEZ companies would have been approx. 850 million EUR. The two biggest exporters in the FEZ, recording numbers past 100 million, were Orion Global PET and Mestilla.

Through the last year, the number of investors active in the Klaipeda FEZ grew from 29 to 34, the total number of employees working in the investor companies changed from 3,216 to 3,427. When the other companies operating in the Klaipeda FEZ territory are added in, we find that around 100 businesses are working in the FEZ, employing over 5,500 people.

Mantas Katinas, the General Manager of Invest Lithuania, comments that the successful and quickly growing Klaipeda FEZ results only confirm the conclusions from the recently presented Lithuania FEZ report.

“The FEZ report presented in April has shown that the Lithuanian Free Economic Zones are useful not only in the economic sense but also when you look at their influence on public finance. It’s calculated that the positive impact to public finance had by the FEZ system in the period of 2002 – 2043 will be 6.6 times greater than the money invested from the public sector and the waived portions of taxes due to tax relief measures,” says M. Katinas.

“As our analysis shows, it is important to develop the already existing FEZ infrastructure, grow its boundaries, so that companies can be offered bigger lots for their operation, if we want the FEZ numbers to grow not only through the efforts of the current investors but the acquisition of new ones as well.”

Revenue-wise, the biggest companies at the Klaipeda FEZ last year were Neo Group, Orion Global PET, Mestilla, Yazaki, Espersen, Retal, Fortum Klaipeda, Glassbel, Albright, and Heidelbergcement. Each company presents its results in public separately.

Throughout the last year, the companies to announce or start investment projects at the Klaipeda FEZ were Capella Baltica, Focus Fabrication Group, Baltijos Eucutekas, Etman, Vejo projektai. The pre-existing investors to start or even finish significant expansion projects were Neo Group, Retal, Lavango, Indorama, and Ad Rem.