Import Fell into Decline

The major import partners are Russia (29.2 %), Germany (11.9 %), Poland (9.9 %), and Latvia (6.2 %).
The major share of import includes mineral products (27.7 %), machinery and mechanical appliances (12.8%), production of chemical and allied industries (12.6%).

Lithuania has exportable production

The main Lithuanian export partners remain Russia (12.5 %), Latvia (10.2 %), Germany (9.3 %) and Estonia (6.6 %). A bulk of export goes to Poland, the Netherlands, Great Britain. Export structure is dominated by the EU countries (65 per cent), while export to CIS countries comprises approx. 22 per cent.

In January–April 2009, the most significant share in exports fell within mineral products (19.5%), products of the chemical or allied industries (11.0%), machinery and mechanical appliances, electrical equipment (9.4%).

Mykolas Aleliūnas, the Vice President and General Director of Lithuanian Confederation of Industrialists, alleges that Lithuanian economy and industry are competitive. "Just because export markets and internal consumption declined, it does not mean that industry is not competitive. Are our furniture or textile products of a bad quality? No. Foreign companies entrust huge orders to Lithuanians. Almost every country in the world knows about Lithuanian lasers and electricity accounting appliances, the production has its customers all over the world”, underlines M. Aleliūnas.

The collocutor thinks that adequately diversified Lithuanian industry that is able to export production to different markets. The industrial structure of neighboring Baltic States is dominated by specific activities, therefore the export is related with limited markets. 

Innovations Receive Higher Attention Degree in Lithuania

The Government has approved Innovation in Business Programme for 2009–2013 that aims at increasing country’s innovation potential, promote innovative activity in business and more effective application of information technologies.

During implementation of this programme there are plans to establish Lithuanian agency of innovations and technologies, provide financial support for the development of business infrastructure, technological innovations, implementation of advanced management methods and patents for invention.

In many Western European countries innovations has become the main incentive of economic growth that allows achieving high level of business efficiency and profitability. According to statistics, a quarter of all Lithuanian companies performs innovative activity nowadays. 

Kestas Petrutis, Managing Director of the business consulting company “VIR FULMINANS” assumes that innovations in business are applied in approximately fifth companies in Lithuania which make 50-60 per cent of value added in the country. "It is noticeable that innovative companies “drive” Lithuania’s economy as well. We often talk about the technology innovations, however very useful non-technological innovations include the ones of marketing, management, resource and project administration. If a new product is launched every other 3-6 months, the company has to be in great rush.  Changes become the only constant thing in such companies. It should be acceptable to all - people, managers and owners. Lithuanian market is very small and influenced by the global market. Without making any changes and taking innovations it would be difficult to survive. Speaking about Lithuania, all companies making the top thousand according to the turnover are more or less innovative”, K. Petrutis describes the situation in Lithuania.

Lasers – Lithuania’s High-Tech Products

In 2008, Lithuanian laser industry has stood the development pace of the recent years and as opposed to 2007 made 16 per cent higher production sale. Lithuanian companies earn the biggest share of income by developing lasers for scientific research market – Lithuanian lasers and their components comprise nearly 10 percent of all global market. In 2008, Lithuanian laser companies totally exported 86 per cent of the developed production.

According to professor Algis Piskarskas, the president of Lithuanian Laser and Light Science and Technology Association, the perspectives of Lithuanian laser sector remain optimistic even under global economy recession. “Economically developed countries consider the renewal of production technologies namely as the outcome of current crisis, therefore do not reduce funding for advanced scientific research. In addition, lasers become especially useful in enhancing production effectiveness and rapidity and are widely used in the production of sun elements”, says professor A. Pikarskas.  

Since 2003, sales in Lithuanian laser sector have increased by nearly 2.5 times, six new companies of laser production has been established. “The value added of laser sector comprises even two thirds of total production price, while work capacity of Lithuanian laser industry exceeds the capacity of country’s economy by more than two times. Because of such efficiency we can successfully compete in global markets”, says the collocutor.

Priority for Export Promotion

By seeking to stimulate export and solve consequences of complex economic situation in Lithuania, the Government endorsed the project of the Law on State Special Guarantees regarding Sales Credit prepared by the Ministry of Economy that regulates insurance of sales credit with participation of country when the country takes part of the responsibility of sales credit insurance risk. Currently, the extension of state special guarantees by insuring sales credit of Lithuanian economic subjects is not regulated and guarantee institutions established by the Government cannot provide appropriate guarantees. Hopefully, the situation will be changed as soon as possible.

In order to encourage companies to more active search of foreign partners and increase of sales in foreign markets, Ministry of Economy has already allocated LTL 552 thousand of 2007–2013 EU structural funds for the thirst three companies. The funding is provided according to measure “New Opportunities” based on which the search of opportunities for companies’ export will further be supported.

Dainius Kreivys, Minister of Economy of the Republic of Lithuania supports Government attempts to promote diversified export by various methods in anticipating economic stability.  “We will seek that in 2015 the third of our export will be comprised of services. We should export knowledge instead of cheap goods. We belong to one of the most innovative region in the world and to become the significant part of it we will replace the current economy of low value added with high value added products and innovations”, highlights D. Kreivys.