The foundations of the metalworking and mechanical engineering sector in Latvia were laid during the Soviet Union period. This sector, which was created to meet the different needs of the Soviets in the past, has become one of the leading industries of Latvia today.
Apart from the knowledge and experience from the past, factors such as a skilled workforce, being close to markets, and having easy access to raw materials have led this sector to come to the fore. Many local and foreign companies have made investments in this field and exported products that meet the needs of the region. This sector still provides great opportunities for foreign investors.
Advantages of Metalworking and Mechanical Engineering Sector in Latvia
There are different reasons why metalworking and mechanical engineering is one of the leading sectors in Latvia. Among the advantages that enable even foreigners to come to Latvia and make investments in this field, the major ones can be listed as follows:
- >>> Advanced communication and logistics infrastructure
- >>> Being one of the traditional sectors
- >>> High experience and accumulated knowledge
- >>> Competitive workforce
- >>> Transition to sophisticated production or incentives for doing this
- >>> Easy access to markets and raw materials due to the geographical location
This sector has always had a major place in the Latvian economy. According to 2018 figures, approximately 23% of Latvia’s total exports belong to this sector. The fact that Latvia was the center of the military and aviation industries during the Soviet Union period enabled it to have a high R&D capacity and skilled workforce today.[*]
Metalworking and Mechanical Engineering Sector in Post-Soviet Latvia
It is known that the Baltic region, especially Latvia, achieved high growth right after the collapse of the Soviets. The fact that the region was a metalworking and mechanical engineering center in Soviet times was the basis of this situation. After the Soviet, this sector focused on the production of optical equipment, medical devices, and electronic tools. Although the sector has a wide range, it would not be wrong to say that it focuses on subcontracting activities in general.
Some large companies have managed to integrate their manufacturing processes into the global supply chain. Therefore, it can be said that there are serious opportunities for foreign investors.
The railways Latvia have enabled it to have a developed logistics network. Being a transition point between east and west and having easy access to raw materials is possible thanks to these railways. With high financial investments made and a competitive workforce, it is possible to say that the sector will develop further in the future. This sector will soon become much more influential with the incentives given by the Latvian government. This situation will provide important opportunities and advantages to investors. Contact us for more information on the metalworking and mechanical engineering sector in Latvia.