(As published in Consignments)
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| Arijandas SLIUPAS |
Lithuania,
a member country of European Union, has potential to become most attractive
destination for investments due to the country’s strategic geographical
location that connects the shipping lines, roads and the country now plans to
develop air transport hub connecting global players to Eastern Europe and CIS
countries.
Lithuania’s
vice minister for transport and communication Mr Arijandas SLIUPAS was in Dubai
in February to promote cooperation between UAE and Lithuania. Mr SLIUPAS in an exclusive interview with us
speaks about Lithuania’s vision 2030 to become active international player in the
global supply chain.
Discussing
on why any business should choose Lithuania as a hub the minister explains the
country has a lot of similarities to UAE when it comes to intermodal link
between sea, land and air connectivity. “Lithuania is situated on an axis
between western Europe, Eastern Europe and especially to the entrance point to
CIS countries like Ukraine, Russia, Belarus and Kazakhstan. It is far more cost
effective compared to Western European distribution hub because of its custom
and setup cost benefits and entry point to Eastern Europe, CIS and biggest
Asian market like China through Kazakhstan.”
“With
an aim to promote business environment for international business fraternity we
focussed on our organic growth developing our multimodal infrastructure and
improved our intermodal terminals including ports, railway terminals and
airports. We have international railways and highways that support goods flow
across the borders,” he added.
The
country has promising economy with almost 14 per cent of the GDP growth
contributed by their transport sector. Also According to Mr SLIUPAS, 90 per
cent of businesses registered in Lithuania serve international markets. He says,
“As trade between the EU and Asia is over € 552 billion and it is still
growing, transport plays important role in trade. We aim to be an active
international player in the supply chain to reach the level, where 2.3 per cent
traffic passing between Asia and Europe passes through Lithuania.”
“In
realising this goals we are working to build international partnerships not
only in Europe but beyond with hubs like UAE. Lithuania connects markets like
northern Europe, which has 110 million population, CIS countries with 250
million and the Western Europe with 340 million. What we offer to businesses is
quality infrastructure and cost effective supply chain solutions,” SLIUPAS said
adding that the land-sea-air infrastructure are tested to be successful and goods
coming from middle east or far east can
be distributed as far as 1000 km diameter in 48 hours.
The
country has invested in expanding the earlier two economic zones to seven with
diversification. Key growth industries in the country remain food processing,
light industry etc. But Mr SLIUPAS projects his country as services industry,
particularly in transport sector. “We
are a service focused country with limited but smart human resources. We have a
non-freezing port in Europe and Baltic highway, which is international. However
our main economic zone remains Kleipeda, where we have multimodal hub for road,
rail and sea port. While Kaunas freezone is centrally located and is a
convergence for all modes of transport including rail, road, air and sea.
Investor benefits
Lithuania
has designed a investor friendly economy with
attractive tax benefits for international businesses. According to Mr
SLIUPAS companies registered under Lithuanian freezones enjoy tax free period
for first six years and only 50 per cent tax for another ten years. There are
special establishment incentives on real estate tax and government service
benefits. "We on a governmental level has introduced benefits for foreign
direct incentives and we provide organisations with establishment support of 25
per cent in the total cost," he said. Mr SLIUPAS also says that Scandinavian
countries strongest partners are Germany and Russia.
Logistics infrastructure
The
Lithuania is the junction where the railway- gauges interchange between Russia
and Europe and we have invested in developing an intermodal terminal at Kaunas.
"We have an intermodal terminal Kaunas and air cargo facilities will be
connected to air a cargo facility, which is at only 6 km distance in two years,"
Mr SLIUPAS said.
In
addition to the existing infrastructure, transport ministry of Lithuania has reserved
territories in the airport to expand cargo facilities. The expansions will be
undertaken to match demand growth.
Asian connections
Lithuania's
largest connectivity to Asian markets is by rail, the biggest market in the
region China is connected through Kazakhstan. "We have special container
trains from China via Lithuanian territories that are operated by the private
companies. We have special interest in Chinese market and have Lithuanian
railway representative office that works jointly with Chinese companies. We believe in partnership that nurtures mutual
benefits," Mr SLIUPAS said.
Lithuania
has cooperation with companies in UAE, however, the country now seeks
government partnership in various areas including food processing, logistics
and creating new trade routes.
The future
Vision
2030 aims to be active player in supply chain, where two biggest markets like Asia
and Europe are connected through Lithuania. "We are looking into critical partnership
with countries and hubs like UAE are very important partners, SLIUPAS said. In
conclusion the minister, welcomed companies take advantage of Lithuania's
strategic location and business set up incentives. He says that as emerging
markets are evolving Lithuania welcomes innovators to leverage on opportunities
by the gateway country.
