Promising business sectors in Rezekne SEZ and export in Latvia

  blog/Promising business sectors in Rezekne SEZ and export in Latvia

Promising business sectors in Rezekne SEZ and export in Latvia

June 16, 2021

Rezekne, its location, local residents, availability of resources and constant desire to develop are the foundation for starting and developing a successful business. Here are the most promising industries, success stories and various factors that make Rezekne a great city for investment.

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1. Metalworking

The metalworking industry in Latvia has developed and become a very competitive, innovative and productive industry with a skilled workforce and an excellent geographical location, which provides access to metal stocks and allows efficient use of the market in the West.

The main sectors in the Latvian metalworking industry are:

● Metal products;
● Manufacture of tools;
● Equipment;
● Electrical engineering and shipbuilding;
● Transport equipment;
● Cars;
● Trailers;
● Telecommunications and optical fiber.

As a success story in the metalworking industry, it is worth mentioning SIA “LEAX Rezekne” RSEZ, which has been operating in the territory of Rezekne SEZ for 9 years and is one of the LEAX GROUP companies.

The main activities of the company are the metalworking, manufacturing parts for the automotive, mining, tool manufacturing, industrial and electrical equipment industries. LEAX Rezekne main customers are Volvo, MAN, Scania, Meritor, Atlas Copco, Sandvik Mining. The company uses local labour at the plant, and provides training for the labour. SIA “LEAX Rezekne” RSEZ mentions corporate income tax discounts as the biggest benefit for operating in the territory of Rezekne SEZ.

Worth mentioning is RSEZ SIA “LATSTAB” which has been operating in the Rezekne SEZ since 2016 and started their way with support from the development financial institution ALTUM. They are working on a comprehensive range of steel products manufacturing for different civil engineering needs, such as construction, road construction, telecommunications, railroad, meteorology, and others. By attracting 120'000 euros funding in 2019, they purchased an inductive heating unit, which helped them start manufacturing a new product of their own - a curved pole. As a result of the investment, the increase in productivity has reached 20% in companies' exports. By offering a competitive salary, the company is successfully using a local labor force. And at the moment the company is already exporting to 15 countries - Lithuania, Estonia, Sweden, Denmark, Russia, Belarus, Ukraine, United Kingdom, Ireland, Germany, Netherlands, Belgium, Armenia, Norway, and the Czech Republic.

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2. Woodworking

Rezekne region is the richest with available forest resources in Latgale region, with a total of 9.4 thousand hectares of forest area. This opens up opportunities for entrepreneurs to invest in this renewable resource and to successfully develop business in the region, possibly representing one of the main sectors in the woodworking industry:

● Sawmills;
● Timber plants;
● Plywood plants;
● Pellet production plants.

Rezekne SEZ Authority is proud of Rezekne SEZ wood processing companies: “Verems” RSEZ SIA, which is the largest industrial company in Rezekne region, “NewFuels” RSEZ SIA, which is the largest producer of wood pellets in Latvia, as well as an independent company that has chosen to operate in Rezekne SEZ territory - SIA “VTI Avoti”, which is engaged in the production of plywood sheets and wood panels. These are some of the most important wood processing companies not only in Rezekne SEZ, but also in Eastern Latvia and Europe. (Source Nr.1) (Source Nr.2) (Source Nr. 3)

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3. IT and communication technology sector, example of Rezekne SEZ

The IT and communication technology sector is one of the fastest growing sectors in Latvia. In the coming years, more than 180 representatives of the IT industry could graduate from the Rezekne Academy of Technology, including programmers, programming engineers and computer systems specialists as available, trained and competent staff. (Source)

SIA “Midis” RSEZ should be noted as a success story in this industry. This company has been operating for 10 years. In 2020, the company became a Rezekne SEZ commercial company. SIA “Midis” RSEZ provides a full cycle of IT systems development: needs analysis, design, development, testing, quality assurance, maintenance, user support and training. The company continuously implements innovative software solutions in data systematization, management, distribution and maintenance processes to meet customer needs and requirements. The company plans to expand the range and scope of its services in the territory of Rezekne SEZ, as well as to build new premises for commercial activities. As part of the investment project, the company plans to employ 30 new IT specialists by 2024 and invest more than 1 million euros. (Source)

4.Transportation and storage

Geographical location of Latvia is suitable for entrepreneurs looking towards the European Union and Eastern countries, as Latvia is located on the shores of the Baltic Sea, where ports are available, road and rail infrastructure is developed, and also Latvia has the largest airport in the Baltic States.

Latvia is a natural home for regional headquarters and distribution centers for international companies due to its geographical advantages, which serve as a gateway between Scandinavia, Central and Eastern Europe. (Source)

As a success story in this industry, it is worth mentioning “Rezeknes dzirnavnieks” RSEZ AS. For 18 years, this company has been working with storage and warehousing facilities in Rezekne SEZ - grain acceptance, pre-processing, storage and unloading in road transport or railway wagons. The company's grain elevator is one of the largest in Latvia. The company employs the workforce of both Rezekne city and surrounding regions, which are highly qualified specialists. “Rezeknes dzirnavnieks” RSEZ AS mentions that the company has established successful cooperation with Rezekne City Council, as well as that the city has a favorable environment for business.

Vision for the future

At this moment in Rezekne, Vilakas Street 1, there is a production complex, in the premises of which there are several companies, including Rezekne SEZ commercial company SIA “MIDIS” RSEZ.

In addition to the reconstruction of Rigas Street, the project “Business Cluster Development in Rezekne and Development of Business Support Infrastructure” planned the construction of another production complex next to the existing Vilakas Street 1. Experience has showed, that the decision to build production sites to lease ready objects has fully justified investments. The new production complex, the construction of which will also start this year, already has potential companies that are ready to lease it in order to open new production facilities and/or expand existing production areas. During the implementation of the project, it is planned to return to circulation 2.2 hectares of abandoned brownfields, create 92 new jobs and attract private investments in the amount of 10 million euros.(Source)

In order to improve the overall infrastructure of Rezekne, several projects are being implemented to improve the city. An example is the project: “Establishment of a network of industrial territories for the promotion of entrepreneurship in Rezekne city, Rezekne and Vilani region”, within which the reconstruction of Varoņu, Maskavas and Noliktavu streets has been carried out. The goal of this project is, based on the needs of entrepreneurs, to arrange the public infrastructure necessary for commercial activities for the growth of private investment and business development in the city of Rezekne. (Source)

In the city of Rezekne, there is a noticeable tendency to restore, improve and create new, landscaped territories in order to continue to develop and improve the business environment.

Export in Latvia and Rezekne SEZ

Latvia has an open economy, which has close ties with trade partners in the region. Latvia's main trading partners are EU countries, which account for 72% of total turnover.

The main countries Latvia exports to are: Lithuania, Estonia, Russia, Germany and Sweden. Most of Latvia's exported goods are agricultural and food products (mainly cereal products), as well as wood and its products, machinery, equipment, metals and metal products are exported. (Source)

Historically, one of the determining factors in the development of Rezekne is that it is located at the crossroads of international roads and railways, with direct access to international markets with more than 500 million consumers in the EU, Russia and the CIS countries.
The city and region of Rezekne are always developing in order to make the business environment even more desirable and more efficient in the future. You can find out more about Rezekne SEZ opportunities, benefits and support here.