“Fazer Latvija”: 18 million investment, the most modern bakery in the Baltics, and ambitions for further growth

Fazer Latvija is part of the international “Fazer” Group, founded in 1891 in Finland. The concern specializes in the production of bread, sweets, and other cereal and plant-based products. Over the years, Fazer has expanded its operations to eight countries, including Latvia, and now exports its products to roughly 40 world markets. Fazer Latvija is one of the largest bakeries in the country: the Ogre factory supplies bread and other products not only to Latvia, but also to Estonia, Lithuania, and Finland. The group’s trust in Latvia is also evident in its large-scale investments: last year they reached 18 million euros, and additional improvements of more than one million euros are planned for next year. 

The past year marked a turning point for the Fazer structural unit in Latvia. The company made a strategic decision to merge its Baltic bread factories and concentrate production in one location – the Ogre region. Until now, production had taken place both in Latvia and Kaunas, but a detailed analysis showed that modernizing and consolidating production in Latvia would deliver greater long-term benefits. 

With the implementation of this plan, total investments in Latvia reached 18 million euros. These funds were used to modernize and expand the production building, install three new production and assembly lines, and build a new warehouse. Although the modernization and automation of the factory on a Baltic scale generally meant a decrease in the number of employees, Latvia was an exception – around 60 new jobs were created at the Ogre factory during the project. As a result, the total number of employees at “Fazer” bread and confectionery factories in Latvia now exceeds 300. 

“Now all Fazer and Druva brand bread for the Baltic market is made directly in Ogre,” emphasizes factory director Kalvis Fjodorovs. “This was a strategic decision that has strengthened our market position, improved efficiency, and created one of the most modern and competitive bread factories in the Baltics.” 

Main export market – the Baltics 

Fazer Latvija is one of the two largest bakeries in the country. Last year, the company achieved a turnover of 34.63 million euros and is the second-largest player in Latvia’s freshly packaged bread segment. The capacity of the Ogre bakery is impressive: on average, 1,800–1,900 tons of products are produced per month, while annual output reaches 22–23 thousand tons. 

The main export markets are Lithuania and Estonia, which take a significant share of the products produced in Ogre. Notable volumes are also exported to Finland, the third-largest export market. Smaller quantities go to the United Kingdom, Ireland, Norway, and even the United States, where they are mainly purchased by Eastern European diaspora stores. 

“Yes, the US is not our largest market, but it is special and sentimental,” explains Fjodorovs. “Latvians, Estonians, Lithuanians, and other Eastern European communities deeply appreciate being able to buy products with a familiar, home-like taste – such as dark rye bread. Exporting bread to destinations as far away as the US in large volumes is currently not profitable.“ 

Why Ogre? Logistics, premises, and workforce 

The decision to maintain and modernize production in Latvia was not self-evident. It followed a careful analysis comparing Latvia with continued development in Kaunas. Several factors favored concentrating production in Latvia. First, Ogre’s location in the center of the Baltics – between Estonia and Lithuania – provides advantageous logistics and easy access to national transport routes. Second, the production plant in Ogre could be expanded, while the Kaunas bakery, located in the city center, had no space to grow. Third, although the labor market in Latvia is challenging, it is still more favorable than in Kaunas, where active business promotion policies have created especially fierce competition for employees. 

“The truth is that attracting employees to Ogre is not easy,” says Fjodorovs. “To address this, we provide transportation from other cities. To remain competitive in the labor market, salaries at our production plant have grown rapidly in recent years. This is a significant burden and not always justified by profit results, but without it, stable production would be impossible. By comparison, the situation in Kaunas is even more complicated – active business stimulation attracts many new companies, making it extremely difficult to find qualified employees.” 

Investments in Latvia – more than half received by local companies 

Although Fazer is an international company, a significant part of the group’s 18-million-euro investment stayed in Latvia. Fjodorovs estimates that almost 11 million euros went to local companies, naming production equipment manufacturer Peruza, Kener, Arcxo Group, construction company Selva Būve, and several other Latvian partners. 

“We have tried to remain loyal to Latvian companies,” says Fjodorovs. “Not only because it strengthens the local economy – Latvian companies genuinely offer high-quality solutions, often at more competitive prices and with significantly lower logistics costs.” 

The decision to invest in Latvia was also supported by state institution instruments, including the ALTUM capital discount and Rural Support Service of Latvia co-financing. “It was not the decisive factor, but it gave us additional confidence to undertake these large-scale investments,” Fjodorovs explains. 

Challenges – from labor to retail chains 

The bread and bakery products market in the Baltics is highly competitive, and in Latvia it is influenced by several key factors – rapidly rising wages and strong import competition. At the same time, consumers increasingly seek new flavors, formats, and products, requiring companies to maintain a balance between tradition and innovation to remain competitive. 

Even after the recent major investments, “Fazer Latvija” continues to plan for growth. In 2026, the company intends to invest approximately one million euros in its Latvian production facility – half of this amount will go toward replacing technologies and equipment, while the rest will support process optimization and capacity expansion. In the coming years, the company plans to continue investing in equipment renewal, capacity building, and productivity improvements.