BiL How national exporters would change their strategies in the post-crisis period?

 

In my opinion, the post-crisis period has not come yet. Our state lives in the period of the crisis. So, speaking about the behaviour upon more favourable conditions is untimely.

At present, the strategic directions of a majority of Lithuanian enterprises remain the same: they include Western Europe, Russia, Belarus, Kazakhstan, and Scandinavian States. Of course, in the said markets, on the one hand, the positions affected by the crisis should be restored, and, on the other hand, new opportunities should be disclosed. It is known that the crisis forced to pay more attention to other states, such as USA, China, Azerbaijan, Turkmenia, some African and Asian states. I think their markets are perspective as well.

 

BiL Can we state that the “night” tax reforms considerably aggravated the situation of Lithuanian exporters as compared to other countries (our competitors)?

 

The increased taxes unambiguously aggravated the situation of exporters. Both in the export and the national market the situation became extraordinarily complicated.  The increased taxes are the result of the crisis. The crisis negatively impacted the whole national industry, including exporters. In my opinion, the policy of improving the state budget by increasing taxes was not correct and now it painfully impacts recovery of the national business and whole national economy.

A success of exporters depends on the level of their competitiveness in international markets. Our competitiveness is affected by a number of factors, such as the sizes of taxes, prices of energy, prices of qualified manpower and so on.

In no sector, we are unique to the extent that allows consolidation in foreign markets without competition. Abundant branches of industry, such as chemical industry, textile industry, machines and equipment, wood and furniture, food industry, production of pharmaceuticals and so on, and services, such as stevedoring, cargo transportation by roads and railways, shipbuilding and ship repairs, are confronted with huge competition. The quality is very important; however, the price often is the deciding factor. So, the increased taxes and higher prices of fuel and electric energy negatively impact the competitiveness.

A considerable damage was caused by the trips of Lithuanian consumers for shopping in Poland, although they seemed to be a matter of indifference. So, our manufacturers suffered because of the fall of zloty and increased taxes in Lithuania. At present, the problems include high prices of oil products, growing smuggling and illegal commerce.  

 

BiL What actions, in your opinion, will be taken by exporters after the crisis?

 

Lithuania is a small state, so it should have export-oriented economy. And export always will remain the deciding factor of economic grow. The crisis showed our businessmen to be stirring: they search for new opportunities and markets. As I mentioned earlier, when the demand in our traditional markets, such as German and Russian, decreased, we looked for markets in Africa, Asia, developing countries, and growing economies. However, the life reality showed that the maximum purchasing power is concentrated close to us – in Western Europe. Although the market of USA is large, selling for dollars is less profitable. However, if US dollar becomes stronger,  export to USA will be recovered as well. Selling for euros is much more beneficial, as compared to dollars. Regarding Arabian states, we hardly access to them, because rich persons look for well-known brands and take into account the repute of the state. The name of Lithuania impresses consumers from Eastern Europe to a certain extent. Our products are not brilliant brands, so penetration onto a market of fastidious consumers is difficult task for us. However, the talents and diligence of businessmen surmount the obstacles.

 

BiL Lithuanian business more and more often looks towards neighbouring Belarus. Is it the country of unused opportunities for our exporters?

  

We are well-known there and this circumstance should be used. The name of our country as well as our enterprises are well-known to the population and our products enjoy a great demand there. Russia, Belarus, Kazakhstan and other countries eastwards from Lithuania are the countries where the name of our country is known and where our products and services are highly appreciated. Up to present time, Russia was our principal export and import partner; it remains the same upon the crisis as well. Belarus is important in the aspect of transit. Cargoes transported from Belarus via Lithuania are a source of income for railway and road transport business as well as for stevedoring companies. Lithuania needs very much transit cargoes from Belarus. The cooperation is mutually beneficial. The statistics show that indicators of transporting some cargoes via Lithuania grow rapidly and provide optimism.  

 

BiL Should Lithuanian exporters continue fighting to their position in the market of fastidious Western Europe?

 

Beyond any doubt. Germany is the largest European market and exports of our products form a considerable part of it. The purchasing power is very high in Western Europe. In addition to abundant buyers, Western Europe provides to exporters new experience and the quality standards that force them to care about self-improvement. We can find no better than this huge market close to us that is a mutual customs-free market free. So, we should implore the God for recovery of this market as soon as possible. Our achievements in the export sector will depend on its success as well.

 

BiL May Poland, our other neighbour, be an important export partner?

 

Poland is an important export and import partner of Lithuania. This market with population of almost 40 million is close to us. However, it is pity that no sufficiently tangible sector finds its niche in Poland. In the meanwhile, imports from this country considerably exceed exports. And it is natural.

However, according to investments, Poland is the second after Denmark. Both in Lithuania and Poland, economic diplomacy does its best for implementing these goals.

 

BiL What actions should be taken by the authorities for providing for favorable conditions for our exporters?

 

The potential of some sectors in exports should be assessed more carefully. It is also bound with the support from EU for introducing recent technologies that enables to improve the quality and to tackle new markets. Many enterprises were provided a support from the Structural Funds and thus strengthened their export potential. However, a large number of enterprises are not provided such support yet. These funds are frozen. They are included in the reserved list.

Measures of some narrower scale include participation in international exhibitions of the branch and support to missions. Support to exhibitions in Lithuania is of a great importance as well. We wish to present out production to foreigners here, in Lithuania, i.e to invite them and to show our best products.

As I have mentioned earlier, economic diplomacy is a very important tool. Maintenance of economic diplomacy is very important, if we strive to help to Lithuanian exporters. It is pity that the branch of economic diplomacy suffered considerably in the period of the crisis. In a majority of embassies, there are no diplomatic service economists now. However, their activities would be very important for successful searching for contacts in foreign markets.  

Fortunately, the network of commercial attachés remained; it should be further extended and strengthened.

Our survey showed highly restrained attitude of enterprises, in particular, large and medium-size ones, towards the assistance from the side of commercial attachés; some of them know nothing about such persons. Nevertheless, their activities and their contributions are very important. There are abundant examples of assistance to enterprises in successful tackling new markets from the side of commercial attachés.

 

BiL Sometimes, the national authorities are criticized for the absence of industry branches of priority to be supported in the sector of export. May be Lithuania is too small for singling out some manufacturers?

 

The Export Strategy for 2009-2013 approved by the Government provides the directions of the activities and the sectors to be promoted and supported. The Strategy was developed in cooperation with associated business structures and after consulting with enterprises.

Of course, the Strategy is not ideal; however, the attempts should be appreciated. Taking into account that the Strategy can be altered dependently on the real processes, everything seems to be quite normal. We do not assent to some aspects of export supporting. In our opinion, opportunities provided by Scandinavian States are not completely used. The population of the said states is an important consumer; however, it requires high quality. So, a higher level of promotion and support is required in this segment.        

A strategic attitude towards economic development seems to require establishing the strategic sectors and providing support to them. It is said that observance of the processes having passed, for example, in Scandinavia would be useful. There, some sectors disappeared and some new sectors appeared. However, it should not be forgot that the pattern of life is not the same in different states. Each state distinguishes itself for the own nuances.

For example, textile industry did not answer the purpose in some European countries and the production was transferred to the East; however, some Lithuanian enterprises have very strong positions in export markets, successfully sell their products in European countries and compete with manufacturers from China and India. Our textile manufacturers distinguish themselves for high quality of the products and flexibility. These properties often are the decisive factors in choosing business partners in Western Europe. In addition, we are closer; besides, a similarity of mentalities sometimes is a decisive factor, too. Of course, the effect of globalization is felt worldwidely and sometimes distances are not a matter of importance anymore.

So, I do not think that the strategies fixed on a paper should be provided a prominence and some branches of industry should be singled out by supporting export of their products because of their imaginable goof perspectives in any market. Some facts deny such imaginable processes.  For example, nobody could suppose 10 years ago “Vičiūnų grupė” to become World leader of producing fish products of surimi. The enterprise employs thousands of persons and its products are being sold worldwidely. In addition to development of its activities in Lithuania, it exports its products to the West as well. Whether it can be stated that food industry is not a perspective importer in Lithuania? Few persons know about producing dummies and other shop equipment in Lithuania. However, Lithuanian enterprise UAB IDW involved in these activities is well-known to foreign enterprises using such equipment. Whether it can be stated that ship building and repairs are not perspective? Although some European countries transferred ship building and repairs to countries of Southeastern Asia, Lithuanian company AB Vakarų laivų gamykla enjoys its good economic stance.  So, whether this sector can be defined as a non-perspective one in the strategic aspect not worth of attention?

 

BiL What perspective of Lithuanian export do you envisage?

 

In my opinion, everything depends on personalities and the favorable business environment. If a talented businessman develops a whole sector and makes it competitive in the expert market in spite of other prognoses of the strategy, it should be highly appreciated and promoted. If the business environment is favorable, creative persons sometimes achieving unexpected results will appear. So, a success of export of Lithuanian products will be ensured, if a favorable business environment is formed and talented businessmen can realize their potential in the said environment. We expect that establishing of public institution „Eksportuojanti Lietuva“ and its activities will provide some assistance to Lithuanian enterprises; in addition, we expect that the activities of representatives of economic diplomacy and the commercial attachés will be optimized and strengthened and the business environment will be improved to the extent controllable by decisions of the state authorities.

 

BiL Lithuanian Confederation of Industrialists arranges the nomination “Lithuanian Exporter of the Year” for many years. What national enterprises were laureates this year?

 

As usually, enterprises were divided to the categories of small, medium-size and large ones. They were assessed according to a number of criteria. Following national enterprises were the winners of the nomination “Lithuanian Exporter 2009“ this year: AB "Lietuvos geležinkeliai", Group of companies "KG Group", AB "Western Shipyard", UAB "Plungės kooperatinė prekyba", UAB "Švyturys-Utenos alus", UAB "IDW MetaWood", UAB "Vičiūnai ir partneriai", UAB "Norvelita", Stevedoring company "Bega", AB "Klaipėdos nafta", UAB "Trivilita", UAB "Sicor Biotech", UAB "Orion Global", UAB "Traidenis", UAB "Jūrės medis", UAB "VAE Legetecha", UAB "Swetrak", UAB "Pack Klaipėda", UAB "Telesoftas", UAB "Dastra".