News

Norway is one of Lithuania’s most solid partners amongst the Scandinavian countries. The Extraordinary and Plenipotentiary Ambassador of the Republic of Lithuania to the Kingdom of Norway, Alfonsas Eidintas, has kindly agreed to share his thoughts about topical issues, co-operation between the two countries and to answer some questions put to him by the magazine Made in Lithuania.

– What would you highlight in your assessment of the economic co-operation between Lithuania and Norway?

– Trade relations between Lithuania and Norway have been developing steadily for quite some time now. The further development of these relations is a placed high on the Embassy’s agenda. Since 2000, trade turnovers between the two countries have doubled and Lithuania export to Norway twice as much as it imports from this Scandinavian country.

As can be seen from the structure of Lithuania’s exports, products from Lithuania’s strongest and traditionally export-oriented industrial sectors are very successful and compete well in the Norwegian market year on year. These sectors include: passenger and other kinds of ships and ferries; electrical equipment and appliances; wood and wood products (wooden houses, furniture and others); as well as metal production. Electronics industry enterprises, which can manufacture high-quality products at a lower price than Western companies do and export part of their production, have an excellent chance of finding business partners in Norway. Furthermore, there are good opportunities and prospects to increase exports of wooden products (parquet products, wooden prefabricated houses) to Norway because both Lithuanian and Norwegian business people take great interest in it. This is particularly true of exports of wooden prefabricated houses.

After Lithuania’s accession to the European Union, Norwegian business people reassessed the prospects for mutual co-operation as being more favourable. Now they find Lithuania to be a more reliable state from a business point of view. Norwegian business people did not only take interest in the products manufactured in Lithuania – their involvement in Lithuania’s business environment has gone from strength to strength and their demand for Lithuanian work force has increased substantially. When they look for business partners in Lithuania, Norwegian businesspeople want to know that their companies have international ISO certificates testifying to their company’s production quality, that their environmental protection management systems have been introduced and function at the enterprise, and that all of those comply with the international standards and requirements. The more enterprises in Lithuania are going to introduce ISO standards the easier it would be for them to find a business partner in Norway. 

The standard of living in Norway is one of the highest in the world, but the goods and services sold there are also extremely expensive. Norwegian enterprises find it beneficial to move production to the countries with lower costs. Lithuania is regarded as a very attractive country in this regard. Such factors as geographical proximity between the two countries, the developed infrastructure in Lithuania, high labour efficiency, relatively low labour and expenditure costs, and a highly qualified work force all make Lithuania an attractive country for Norwegian investment. However, Norwegian trade unions strongly oppose this transfer of production.

We constantly draw the attention of our country’s businesses to the fact that prices, not only of goods but also of services, especially those, which require physical work (for example, in construction and agriculture) are exceptionally high in Norway. Following Lithuania’s accession to the European Union, Lithuanian companies have been able to be registered in Norway in a more simplified procedure. According to the present legal statute (subject to changes) such enterprises (especially those that provide consultations and services) will be able to pay lower salaries to their employees and therefore will be able to compete more profitably in such sectors as construction and repair works.

We have observed new interest by Norwegian business people in Lithuania after May 2004 – they have chosen to invest their capital in real estate. Their method is to purchase a place, renovate it and resell it at a profit.

Perhaps the main area, which might not be profitable for Lithuanian investment, is regarding agricultural produce. Norway is following a policy of providing subsidies for local agriculture, which makes it complicated to get into the market of foodstuffs in this country. Moreover, the Norwegian market does not take to new products very easily because local customers value only traditional Norwegian food and prefer products which correspond to their unique taste. Therefore foodstuffs produced locally are dominant in the Norwegian trade networks.

However, possibilities for economic co-operation are far from exhausted. The Embassy contributes to it in two ways – assisting in organising business missions and everyday intermediation work responding to enquiries from and requests by Lithuanian and Norwegian enterprises to help them find business partners. Norwegian enterprises often enquire the Embassy whether it could recommend (usually urgently) Lithuanian enterprises, which could produce or sell a certain product. Since we do understand that even the smallest order provide people in Lithuania with work, we cannot leave a single enquiry unattended – we appeal directly to the relevant enterprises in Lithuania, and, if necessary, we ask the Lithuanian Economic Development Agency, regional chambers of commerce and trade for a helping hand.

– How much has Norway invested in Lithuania so far?

– Norway’s investments in Lithuania totalled LTL 542.41 million as of 1 July 2006 and as compared with January this year they have increased by as much as LTL 54.31 million. Norwegian capital investments accounted for 2.3 per cent of all direct foreign investments in Lithuania. Norwegian capital is ranked tenth in this regard. Norwegian capital investment supports about 200 Lithuania registered enterprises.

The Norwegian Company Den Norske Stats Oljeselskap (Lietuva Statoil) is among the first ten largest foreign investors in Lithuania’s economy. The first Statoil petrol station was opened in Lithuania in 1995, and in December 2000 the first automated petrol station 1-2-3 was opened for business in Kaunas. Currently 59 Statoil full service petrol stations and another 6 automated petrol stations 1-2-3 operate in 19 Lithuanian towns.

Other large Norwegian capital enterprises in Lithuania include Hotel Reval Lietuva AB, Radisson SAS hotels in Vilnius and Klaipėda, Scandic group hotels, as well as the financial groups DNB Nord and Nordea.

The largest investment from Norway in recent years in Lithuania has been the acquisition of the Company Ukmergės stiklas in Pašilė, a suburb of Ukmergė, by a group of enterprises Stafa Industrier AS. Two other companies Stansefabrikken and Ukmergės pramonės parkas were founded next to the Company Ukmergės stiklas. Two plants, which belong to the group of enterprises Stafa Industrier AS in Norway, produce articles from fine-plate metal for Bang & Olufsen, Siemens, ABB and to other well known manufacturers of electronics. Stafa Industrier AS came to Lithuania because of the cheaper work force – in order to reduce production costs.

Speaking about the prospects of Norwegian investments in Lithuania, it should be noted that the Norwegian mobile communication Company Netcom AS plans to extend its business to the Baltic States. This Company believes that the mobile communication market in Baltic States is not as developed as it is in Norway. Negotiations are presently being held with interested parties in the Baltic States. Initially Netcom AS intends to conclude a contract to lease a mobile network, and then start registering its subscribers and sell recharge cards. Netcom AS expects profitable business in the Baltic States, because the population of the Baltic States is almost twice that of Norway, and there are around 5 million potential mobile communication clients in the Baltic States.

– Lithuanians in Norway – how are they contributing to the exposure of Lithuania to the Norwegian tourist?

– In brief, the answer could be as follows – let us sit down and try to make a guess together… Lithuanian physicians, engineers, economists, and builders work here, and they do their work well. This means that they open Lithuania to their Norwegian neighbours through their personal activities, stories about Lithuania, by organising visits for their Norwegian friends to Lithuania, bringing their artist friends to Norway, helping them find the halls, the auditoriums for performances, helping them find their way, spend the night for a lower price, etc. This refers to those Lithuanians permanently residing in Norway who are actively working in this regard individually or, for example, as the board of the Lithuanian community in Norway does. The board’s members have planned to organise performances by Lithuanian art masters in Norway. There may not be many of them but their activity is strongly felt. Most of the Lithuanians working in Norway are here temporarily – they work in joint Norwegian-Lithuanian companies – they build and repair houses. Last year alone, 8 000 Lithuanians were granted permits to work in Norway. We think that together with those Lithuanians who arrived here individually to earn money in the services sector, construction works and agriculture, every year about 20 000 Lithuanians work in this country, mainly as seasonal workers. Together with the Counsellor of the Embassy for economic affairs, Regimantas Jablonskas, we visited enterprises which build summer houses – it seems that everything is well organised, men and women earn good money, six weeks of work in Norway are followed by two weeks in Lithuania. Individual Lithuanians come to Norway because they heard rumours or listened to the stories told by their acquaintances and can find a job, but often, without knowing the language, they might not secure a contract and end up working on a seasonal basis. Sometimes they are cheated and are not paid for their work – there are quite a few cases like these and the Embassy does everything it can to help them. Lithuanian builders and those who come to work help Norwegians to form a very positive view of Lithuania and its people, though it is not always the case. The worst cases we have to deal with involve young adventurers, let us say that their numbers are not large, but still, there were already cases when drug traffickers were detained and imprisoned, others fill their cars with petrol and run away from petrol station without paying, shoplift, violate the law, or drive in an non-disciplinary manner often under the influence of alcohol. There are people who come here, as one of them said: “thinking that I might be able to steal something…” They put Lithuania in a bad light and do enormous damage to the image of Lithuania, which is very difficult to mend after their stories are published by the press. Sadly, there have also been great misfortunes to our people here – some were killed here. 

However, bad news are the exception rather than the rule – we are especially glad to see that Lithuanian companies are active in Norway, that many Lithuanian business people understand the needs of the local market well. They know that everything that is made from wood appeals to Norwegians. One can say with confidence that the whole of Norway is made of wood – small towns are entirely wooden, and wooden apartment houses constitute large parts of the main cities. Taking into consideration the fact that most Norwegians build or buy ready made skeleton or panel-type wooden living houses and log cabins as a vacation home, Lithuanian wooden houses building enterprises have been very active here, and they are quite a success story in Norway. The prospects for a successful development in this business are very good. Volumes of work in some Lithuanian wooden houses building enterprises in Norway are impressive. For example, the private company Jungtinės pajėgos UAB have built a 60 house housing estate in the town of Jesheim – a town which houses the employees of the Gardemoen – the Oslo airport. This enterprise even builds multi-storey wooden houses in the north of Norway. Another Lithuanian private company Rąstų technologijos UAB built 32 summer houses in Bærøyknausen Kragerø commune in the summer of 2006. 

Lithuanian companies do not only build and sell their products in the Norwegian but also invest well. In July 2005 the Lithuanian Investment Company Hermis Capital acquired almost 40 per cent in shares of the Company Kitron through the Oslo Security Exchange for NOK 240 million or LTL 110 million. This Company is one of the leading Scandinavian companies in electronics development, industrialisation and production. As the largest shareholder in Kitron, the Lithuanian company is able to influence Kitron’s agenda and future.

– How do the Norwegians view Lithuania? What information about our country do they lack?

– Since such a research has not been done yet, exact statistics are not available. I base myself on the observations of the Embassy employees and on my personal observations. It is safe to say that Lithuania is known and viewed quite positively in Norway. For the Norwegians Lithuania is a country in which the level of services is high, prices in the services and health care sectors are reasonable, and Lithuanian food products are good buy. Due to these or similar motives the number of Norwegian tourists staying at Lithuanian hotels has been increasing in recent years – every year it increases by as much as one quarter. There is a lack of very exact information about tourists. The Tourism Department of Lithuania does not regard Norway as a strategic market, and because of that not many initiatives are promoted regarding tourists from Norway. The Department sends tourist information to the Embassy at the latter’s request only. Lithuanian tourism companies are not too active in entering this market either and do not offer their services here. Nevertheless, interest in Lithuania is on the rise – every day the Boeing jet bearing the AirBaltic sign which flies to Lithuania is full. Passengers can also fly to Vilnius from Oslo three times a week by Norwegian Air Shuttle plane and even in winter there is no shortage of wealthy Norwegian passengers. There are also Norwegians who fly and spend their weekends in Vilnius, Druskininkai, and Palanga. However, Norwegian dailies never advertise Lithuania as a tourist destination. Following Riga’s printed advertising supplement in the main daily Aftenposten, it was not surprising to see as many as three planes flying daily to Riga full of passengers. Neither Vilnius nor Kaunas, and not even Palanga advertise themselves there, though there is already a direct flight to Palanga. The Embassy does its best – it provides information and finds partners. Once the embassy was able to give the addresses and telephones of those people in Lithuania with whom concrete specialists from Norway wanted to meet and discuss the relevant business.

– At what cultural events do Norwegians and Lithuanians come to know one another?

– A Lithuanian Attachés of Culture to the Scandinavian countries will be appointed in the near future. Their function would be to plan and organise performances by the best Lithuanian art representatives in our region. This is a very welcomed initiative because since we have no such official at the Embassy, we can only act at our own discretion, after consultations with the Lithuanian Institute, the Ministry, and the Ministry of Culture. Most often we help organise meeting of professionals from different fields, and concerts by dance groups or musicians. Perhaps the most important concert is orchestrated at the yearly reception on the 16th of February. In previous years the soloist Judita Leitaitė, the M.K.Èiurlionis quartet, the Vilniaus quartet, the Lipčių duet with the soloist Aistė Širvinskaitė, the ensemble of baroque music Musica Humana with the soloist Gintarė Skėrytė, Petras Geniušas, and Vilhelmas Čepinskis have all given a great performance in Norway. Last weekend actors from the Keistuolių theatre, who had visited Oslo several times before, gave a concert. Actors from other theatres have also held one man performances (actress Neringa Bulotaitė) and choirs from Lithuania (Virgo and others) were heard throughout Norway. No matter who organises these concerts the Embassy tries to become and does become one of the patrons of such performances, or at least their main supporter.

We often contribute to cultural events in the Lithuanian community of Norway, so that art groups, which are invited on the community and its leader’s initiative, would be able to perform not only to the Lithuanians but also to Norwegian audiences. The best example is a modern dance group headed by Aira Naginevičiūtė who performed their dance titled Procesai in Oslo last November.

We are especially glad to see intensive and direct relations developing between the workers of education and culture in Lithuania and their Norwegian colleagues, who, making use of the support provided by funds from Norway or other Nordic countries, often take part in various courses, international cultural plain-air paintings, cultural camps, joint exhibitions of sculpture, painting, folk art and others.