With the current supply disruption, the main thermowood traders in Lithuania, UAB Brolis Timber, have not hesitated to turn towards production: during this year, the first certified thermowood factory will be built in the Kaunas Free Economic Zone (FEZ). Its production volumes should meet the needs of the country’s consumers.

UAB Brolis Timber specializes in environmentally friendly timber products for homes and landscaping. Since its inception in 2007, the company has tested and introduced to the market a variety of modified timbers. However, due to practically proven advantages, sales focus gradually shifted to  Thermowood® which has organically developed into a dominant part of their offered assortment.

“When we started working with thermowood, we saw it as a niche product. This approach has changed over time − we have acknowledged its functional properties, and the general market awareness for sustainability has increased immensely. Thermowood® grew into our most important product range, accounting for more than 80% of the assortment,” says Ingrida Vizbaraitė, CEO and co-owner of Brolis Timber.

In the last decade, Brolis Timber has become the main supplier of thermowood in Lithuania. Wood processed only with heat and steam, without any chemicals, becomes extremely durable and stable, its thermal resistance improves, and no resin remains. According to thermowood producers, due to these characteristics, it is an excellent nature-friendly alternative to exotic wood species.

The company has timber stores, located in the major cities of Lithuania − Vilnius, Kaunas, and Klaipėda. They offer variety of outdoor and indoor cladding, decking, oak flooring, and complimentary products, while Kaunas-based production and warehouse center carries out wood planing, brushing and coating. Export comprises 22% of the volume.

Despite supply challenges and other adverse global factors, Brolis Timber has grown with momentum in recent years, reaching as high as 81% in 2021.

“With growing demand for wood, the capacity of our suppliers − thermowood manufacturers − has become insufficient. They chose strategically most potential markets, significantly and unpredictably increasing prices, and cancelling contracts. We have been forced to urgently diversify supply, constantly address difficult situations with our customers due to shortages or delays. Paradoxically, this critical situation has only increased our concentration and creativity, and we have decided to start producing ourselves. This decision is probably the most organic development of our activities. In Lithuania we do not have a certified production of this type, one that could offer competitive products to both the Lithuanian and export markets,” says Mrs. Vizbaraitė.

Due to convenient infrastructure, tax incentives, and opportunities for further development, Brolis Timber chose their land lot in Kaunas FEZ. Here, in a rented area of 0.9 ha, by the end of this year a complex of approximately 2,500 m² will be built: thermo treatment chambers and stick & stacking facilities, as well as two raw material and finished product storage warehouses. In total, more than €6 million is being invested into this project, which is the largest investment in the company’s history.

The main production will be fully automated. Therefore, in the first phase, the company plans to employ only five new employees − two of them with engineering qualification.

The initial production capacity will reach 12,000 m³ of thermowood annually − almost as much as the sales volume in 2021. At the next stage, the intended production line will reduce the need for preparatory manual work, and there are plans to install a solar park on the buildings.

As the company’s CEO says, own production will undoubtedly open new opportunities for export. However, in the beginning, the production capacity will barely meet the existing needs. Therefore, growth will lead to unavoidable expansion of production, which is already being planned but has not been announced yet.

This is already the fourth wood and furniture industry company based in the Kaunas FEZ territory: in 2019, one of the most modern furniture factories in Lithuania, Geras baldų fabrikas, owned by Freda, was opened here; in 2018, UAB Fitsout, which provides furniture and interior solutions for businesses, started its activities; for many years, the bathroom furniture manufacturers UAB Kamė have been operating here.

Currently, Kaunas FEZ has attracted 46 foreign and local investors applying advanced technological solutions and developing innovative products. From the first investor in 2005 to today, the territory of Kaunas FEZ created more than 6,200 jobs and attracted more than €1 billion in direct investment.

Elme Metall, a company belonging to the Estonian industrial holding BLRT Grupp, plans to start construction of a modern metalworking complex on a 7.6 ha plot in the Klaipėda Free Economic Zone (FEZ) this year. This will be the largest plot developed in the history of the FEZ.

After announcing a EUR 20 million investment project in the Klaipėda FEZ at the end of 2019, Elme Metall is steadily implementing it. Last year, the company completed a state-of-the-art complex for the storage and distribution of metal products. This year, it is planning to start the most important phase of the project – a EUR 17 million metal processing plant. Upon completion of the latter, Elme Metall will employ around 150 professionals in the Klaipėda FEZ buildings.

According to Algerd Andruškevitšus, a Elme Metall board member, the company is currently designing the production complex, which is expected to become the largest sheet and profile rolled metal processing plant in the Baltics.

“Upon completion of the last phase, our Klaipėda facility will be able to process around 50,000 tonnes of sheet and profile rolled metal per year. We plan to supply customers in shipbuilding, ship repair, equipment manufacturing and other sectors. The excellent location of Klaipėda will allow us to increase the efficiency of order fulfilment in our Baltic, Scandinavian, Polish, German, Dutch and other markets,” comments Mr Andruškevitšus.

He said that special attention is being paid to cleaner production and environmental technologies in the development of the plant. With the smooth progress of the preparatory processes, the actual construction of the complex is expected to start in the second half of this year.

Klaipėda and the Klaipėda FEZ were chosen by the company several years ago after evaluating a number of different locations, and the Lithuanian port city proved to be the most attractive due to its suitable infrastructure, excellent logistics and the constructive approach of the FEZ management company. The company also appreciated the competences of the Klaipėda residents. The warehousing unit currently employs about 15 specialists, but once the plant is completed, it will provide jobs for about 150 employees.

According to Eimantas Kiudulas, the head of Klaipėda FEZ, the expansion of Elme Metall is exceptional because it will be carried out on the largest plot in the history of the FEZ. On the other hand, the company’s investment further strengthens the portfolio of higher value-added production. Furthermore, it illustrates the attractiveness of Klaipėda FEZ for various activities – not only production but also logistics, distribution, trade, etc.

“We are pleased that the company is consistently adhering to its plans and, thanks to the city authorities, smoothly implementing the preparatory processes. I hope that after the completion of the development, the story of Elme Metall will be another example of smooth and sustainable investment development in Klaipėda,” says Mr Kiudulas.

The Elme Metall group employs around 500 people in Estonia, Latvia, Lithuania, Finland, Poland and Russia. Last year, the consolidated turnover of the Elme Metall group amounted to more than EUR 230 million.

Window and door manufacturer DOVISTA is to make an additional investment of EUR 5.5 million in its factory operating in the Marijampolė FEZ. ​

At present, the factory employs 340 workers from Marijampolė and other municipalities. It is planned that when this stage of development is completed, it will hire 250 new staff here. DOVISTA takes special care of the well-being of its employees, offering excellent working conditions and competitive salaries.​

The construction of DOVISTA’s factory in Marijampolė began back in 2017, with its manufacturing operations gaining momentum in the autumn of 2018. The volume of output has been growing confidently year on year resulting in over 200,000 windows and doors having been manufactured to date. ​

DOVISTA seeks to become one of the European market leaders in its field. And its investments that will help optimise the entire organisation’s supply chain will play a significant role in achieving this goal.​

The basis for further growth lies in the recent acquisitions of new brands by the DOVISTA Group in Germany, Switzerland, Slovakia and Poland. ​

It has EUR 5.5 million worth of investment planned for the Marijampolė FEZ, which will include the improvement of existing processes and acquisition of new equipment. Output volumes are to increase, and it is planned to start manufacturing new products, too. The new equipment will be installed in existing buildings with the total area of 22,800 sq m. When the project is implemented, the factory will boast a capacity of over 200,000 windows and doors per year. ​

DOVISTA’s windows and doors will continue to be exported to Denmark, Sweden, Norway, Germany and Great Britain.  

On January 20, the modern plant of the German polymer company REHAU, which is the 35th in the world and the 15th in Europe, was officially opened in Klaipeda Free Economic Zone (FEZ). The 19,000 sqm factory was built in a record time by the sustainable urban development and construction company YIT Lietuva. 

REHAU plant is the company’s first facility in Northern Europe. The factory, which was built in just one year, will employ about 100 people in the near future, and the number will increase to 200 in the next couple of years. Equipped with the most advanced engineering solutions and technologies, one of the most modern factories in Lithuania will produce polymer pipes for the construction industry and export them to more than 10 countries around the world. It is planned to reach full production in Q4 this year.

According to the Minister of Economy and Innovation Aušrinė Armonaitė, such German investments contribute to the strengthening of the country’s manufacturing sector, creation of new jobs and increase of the country’s competitiveness.

“Strong growing industry is a key factor in the attractiveness and competitiveness of the country as a whole and of individual cities and regions. I am glad that one of the leading German companies is investing in Lithuania and implementing the most advanced solutions and technologies that create added value for all of us,” says A. Armonaitė.

According to dr. Roger Schönborn, in planning strategic development in Europe, REHAU assessed many potential locations in various regions of Europe. “Our new plant here in Klaipėda is a key success factor for our Building Solutions Division, because it provides an important contribution towards increasing our competitiveness and consequently, that of our customers,” says dr. Roger Schönborn, Head of REHAU’s Division Building Solutions.

REHAU plant manager Giedrius Kaukas says that the smooth construction process of the plant, despite the unfavorable circumstances – the pandemic and the resulting disruptions in supply chains, was achieved through the joint efforts of Klaipeda FEZ Management Company, YIT Lietuva and REHAU teams in Germany and Lithuania.

“We have chosen the sustainable urban development and construction company YIT Lietuva as the construction developer and general contractor, with whom we felt very calm about their experience in managing projects of this size and complexity,” comments G. Kaukas.

Kaukas notes that the construction project implemented by YIT Lietuva confirms the advantages of the so-called build-to-suit model – flexibility and the possibility to fully ensure the implementation of solutions that meet the needs of the company. The premises built and equipped in this way enabled the REHAU plant to start operations more quickly and without significant initial investment. This is proved by the opening of one of the most modern factories in Lithuania just a year after the start of construction. A total of over 30 million euros was invested in the construction and installation of the plant. The plant will be equipped with a total of 23 production lines capable of producing up to 6,600 km of pipes per month.

This REHAU plant project was implemented using extraordinary methods – Klaipėda FEZ Management Company and its partners first announced an international tender for the development of the facility, which was won and the plant was built by UAB YIT Lietuva according to the company’s needs. For the first time in the corporation’s history, REHAU has outsourced the development and management of real estate to third parties.

Just over 10 months after the start of construction, the factory has already installed its first production line and produced test products for certification. Two more months later, the plant was fully completed and commissioned.

MESTILLA, a rapeseed processing and biodiesel production company operating in the Klaipėda Free Economic Zone (FEZ), plans to start a new phase of expansion and modernisation in 2023: the construction of a new modern deep processing line for oilseeds, while introducing state-of-the-art environmental solutions. In the initial phase, investments of around €30 million are planned for these projects.

“The decision to invest was dictated by the European Green Deal, the increasing quantities of rapeseed grown in Lithuania each year and our ambition to produce higher value added products. We are seeing a growing demand for concentrated proteins for animal feed in Lithuania and in other EU countries, as well as an increasing demand for biofuels. The modernisation of the plant will allow us to process up to 500,000 tonnes of oilseeds and to develop a circular economy; the plant itself will be more energy efficient and reduce our carbon footprint. Most importantly, it will eliminate the possibility of odours in residential areas, thus meeting the expectations of neighbouring communities,” says Arūnas Zubas, CEO of UAB MESTILLA.

Eimantas Kiudulas, Head of Klaipėda FEZ, says he fully supports the project.

“The project will essentially be a reconstruction, during which some of the old production lines will be closed and new ones will be opened. I am delighted that MESTILLA will combine business development with substantial investment in odour reduction measures that will make the production footprint virtually odourless. The project will therefore be more modern, higher quality and more responsive to the needs of communities and neighbourhoods. At the same time, MESTILLA’s investment will create additional added value in Lithuania by processing local raw materials that have previously been exported unprocessed, and will further strengthen Klaipėda FEZ’s increasingly relevant investment portfolio in the areas of the circular economy, innovations, exports and renewable energy,” says E. Kiudulas.

“Canola production in Lithuania is increasing year on year, and not only is it economically attractive for farmers, but its properties are particularly beneficial for the soil, crop rotation, and the ecosystem, and in reducing the overall need for fertilisers for the soil and subsequent crops. It is therefore very important and welcome that as much rapeseed grown in Lithuania as possible is processed locally, creating added value, as it is an additional source of both income of and jobs throughout the supply chain, as well as additional revenue for the Lithuanian budget. It also avoids long logistics chains, thus contributing to reducing pollution and improving the environment. Deep rapeseed processing will produce innovative, protein-based products that have not been produced in the Baltic States before, which are particularly attractive and in demand in the food and feed industry of today, and tomorrow. And the production of advanced biofuels will help to achieve the objectives of reducing transport pollution, the Renewable Energy Directive and the circular economy,” says Dalia Rušiauskienė, Director of the Lithuanian Association of Cereal Processors and Merchants.

MESTILLA, together with the design company Sweco Lietuva, plans to start an Environmental Impact Assessment (EIA) procedure in December this year.

The MESTILLA plant has been operating in the Klaipėda FEZ since 2007. The company’s main products are biodiesel (methyl ester of fatty acids) and protein feed from rapeseed. The company, together with the companies providing services to it, directly creates around 120 jobs. For the 2020-2021 season, the company’s revenues amounted to EUR 148.5 million. The company sells its products on the local market, in addition to exporting them to surrounding EU markets.