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Industry in LATVIA Latvia in Facts Forest Industry in LATVIA Latvia in Facts International memberships: EU and NATO since 2004, WTO since 1998 Capital: Riga Other major cities: Daugavpils, Liepāja, Jelgava, Jūrmala, Ventspils Population (as of 1st January, 2014): 2.0 million Area: 64 573 km2 Language: Latvian (official); Russian, English and German are also widely spoken Currency: euro (EUR) GDP growth (2013): 4.2% GDP in current prices (2013): EUR 23.222 billion GDP per capita (2013): EUR 11 537 FDI stock (2013): EUR 11.570 billion FDI stock per capita (2013): EUR 5 781 Source: Central Statistical Bureau of Latvia, Bank of Latvia Contents The Significance of the Forest Sector to Latvia’s National Economy 3 Major Product Lines 8 Company Profiles 16 Useful Addresses 60 Promotion of Entrepreneurship, Investment and Foreign Trade 62 Representative Offices of Investment and Development Agency of Latvia 64 Wood is one of the most vital natural resources on This catalogue is intended to inform potential customers earth, something that people see, smell, touch and use and foreign entrepreneurs about Latvia’s leading on a daily basis. Latvia can be proud that this resource manufacturers in the forest industry, their processing covers more than half of its territory, making Latvia the capabilities and the range of products they can and do fourth most-forested country in Europe. Our national supply. We hope the catalogue will help you find reliable treasure is not just the wood that grows in these forests, and long-term business partners in Latvia. The objective but what has evolved with it – the people, companies, of the Investment and Development Agency of Latvia is technologies, knowledge and experience gained over the to assist both local and foreign entrepreneurs in adapting course of many decades. to the new global economic situation and to help them make the most of the advantages Latvia continues to The wood industry is an important branch of the offer. processing sector and has long-standing traditions in our country. Since the restoration of Latvian independence, the forestry and wood industry has been a key sector of the Latvian economy. Today, the industry contributes more than 27 % of the total value-added in manufacturing. The wood sector has always been focused on exports and has become one of the most important export sectors. One of the timber industry’s long-term goals is to transform the traditional forest sector into a technologically advanced industry. Today the forestry industry can be proud of its innovative companies operating to the highest global standards, utilising production processes with modern, environmentally friendly technologies and implementing effective resource-management policies. This is strengthening Latvia’s position as a manufacturer of processed, high value-added wood products in world markets. This development course gives a platform not only for businesses, but for the whole country’s economic and social growth. Andris Ozols Director Investment and Development Agency of Latvia The Significance of the Forest Sector to Latvia’s National Economy With forests covering more than 50 % of the country’s Final Felling and Forest Regeneration territory (almost double the world average), Latvia is one of the most forested EU member states. Over the last 60 80 years, the forested area has doubled while standing 50 volume has increased 3.8 times, reaching 668 million 40 cubic metres. 30 '000 ha According to National Forest Inventory (NFI) data from 20 2014, the majority of Latvia’s forest cover consists of deciduous trees, 55 % of total woodland. 10 0 2006 2007 2008 2009 2010 2011 2012 2013 46 % of forests are owned by the State and managed by State stock company Latvijas Valsts Meži (Latvian State Final felling Forest regeneration Forests). Source: Central Statistical Bureau of Latvia Distribution of Forest Area by Ownership The volume of timber harvested annually from Latvia’s 3500 forests had been fairly stable up to 2009 – between 10 3 3000 and 11 million m of timber. The global economic crisis 2500 caused a fall in roundwood price. This led to an increasingly drastic reduction in timber harvest from privately owned 2000 forests. In order to rescue this enormously important 1500 economic sector, the Latvian government took the 1000 courageous decision to increase the volume of timber to '000 ha at the end of year 500 be harvested from state owned forests in 2009 and 2010. This decision did a great deal to save the timber sector 0 2006 2007 2008 2009 2014 from a wave of bankruptcies, thus saving thousands of State Forests Other forests Total jobs. Source: State Forest Service, 2006-2008 Volume of Felling by Ownership * Since 2009, forestry statistics (National Forest Inventory) are being audited every 5 years 14000 12000 The relatively good health of Latvia’s forests compared 3 with world averages gives them a substantial advantage. 10000 Furthermore, the area of regenerated forest is increasing. 8000 In 2013, a total area of 40 266 ha of forest was regenerated, 6000 of which 51 % was in State-owned forests and 49 % in 4000 private-sector forests. In 2013, forest areas were restocked standing volume, 000 m by 5 036 ha more than in the previous year. 2000 0 2006 2007 2008 2009 2010 2011 2012 2013 State Forests Other forests Fellings total Source: Central Statistical Bureau of Latvia 3 Forest management processes and timber product WOOD RAW MATERIALS delivery chains in Latvia are certified on the basis of the world’s two most widely used systems – FSC and For the timber product market to develop successfully, PEFC. This proves that the country’s forests are managed stable production of wood raw materials is necessary. according to internationally acknowledged standards of good forestry. Saw-logs dominate in roundwood imports. Until 2008, the Russian Federation was the major source for Currently, more than 50 % of Latvian forests, including roundwood imports. Because of changes in Russia’s all State-owned forests, are certified in accordance export policy, imports from this country have decreased with the PEFC system, and 33 companies in Latvia have substantially. obtained certification of their delivery chains from the same system. Over 370 forest-sector enterprises and Roundwood is mainly used for producing sawn wood, forest owners have certified their timber chain-of-custody wood-based panels, turned and planed products, wood systems according to FSC requirements and the amount fuels, charcoal, etc. Roundwood is also exported as fuel of forestland that has been certified on the basis of FSC or pulpwood. In 2013, compared to 2012, roundwood requirements exceeds 1.7 million hectares. exports decreased by 2 % in terms of value. Pulpwood, which is exported mainly to Sweden, makes up more than 80 % of roundwood exports. WOODWORKING Latvia’s leading supplier of pulpwood is Latvijas Valsts The forest sector has convincingly demonstrated its Meži. strategic importance to Latvia’s national economy. Of all the manufacturers registered in Latvia, 27 % are linked to As a consequence of the rapid growth in the production the forestry sector, which employs around one-fifth of of wood-based panels and fuel products, the utilization the manufacturing labour force. of small-dimension saw-logs has increased significantly over recent years. Local wood-based panel manufacturer In 2013, the forestry sector’s share of Latvia’s Kronospan Riga has become the major purchaser of manufacturing was about 27 %, and the value of pulpwood. products turned out by the sector reached EUR 2.1 billion. Woodworking is also one of the most important export sectors in the Latvian economy, providing around 20 % of WOOD FOR ENERGY overall product exports. The wood energy subsector is very developed in Latvia. In recent years, in order to remain competitive, companies Despite being a relatively small country, Latvia is ranked operating in the woodworking industry have been 4th in the European Union in terms of wood-pellet obliged to give serious consideration to developing production capacity, even though there is little local new competitive products, as it was recognized that demand for them. manufacturing inexpensive products from expensive raw materials was not cost-effective. Because of Latvia’s climate, thermal-energy generation traditionally forms the largest proportion (69.7 %) of the The last few years have seen the replacement of equipment, national energy balance. Wood products have always technologies, and products in the woodworking industry, been an important domestic fuel in Latvia, with a fuel- aiming for more complete utilization of various tree species balance proportion of 28 %. The major consumers of and small-dimension saw-logs. Small and medium-sized wood-fuel products are households (45 %), heat-supply companies, which predominate in the forestry sector, companies (22 %), industry (mainly woodworking mainly manufacture niche products (garden, finishing, enterprises) (24 %), and other consumers (8 %). The packaging, joinery products, etc.), while the larger production of fuel from wood (pellets, fuel chips, enterprises focus on the production of higher value- firewood, and briquettes) is gaining in importance. added products (load-bearing products, impregnated products, construction materials). Primary wood processing Until recently, logging residues, brushwood, and stumps is generally based on modern technologies meeting had only been used for energy on a limited basis because the requirements of the global market, both in terms of of the high transportation
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