How Riga’s Lexel Fabrika Became Schneider Electric’s European Powerhouse

In Riga, a modern industrial facility near Dienvidu Tilts (The Southern Bridge) roundabout is quietly delivering outsized results on a global scale. Through the joint efforts of its 480 employees, SIA Lexel Fabrika grew turnover from €140 million to €190 million in a single year, turning the Riga plant into Schneider Electric’s largest electronics manufacturing site in Europe.  

“We are the only Schneider Electric production facility in the entire Baltic region,” says Pēteris Zavadskis, Facility Director and Member of the Board. “100% of our production is exported. A tiny fraction comes back to Latvia through distributors, but essentially the world is our market.” 

The main product groups leaving Riga are surge protection devices, frequency converters, and smart-home controllers. They rarely reach shop shelves as stand-alone items; more often they are built into huge distribution cabinets, data centres, and industrial systems worth hundreds of thousands or even millions of euros. “When we deliver - we don’t affect just one cabinet sold from Riga,” explains Zavadskis. “We affect global megaprojects.” 

How Riga competes with China 

Schneider Electric began producing electronics in Riga more than 10 years ago. The original reasons still hold true: technical expertise, lower labour costs than in Western Europe, and a strategic location within the European Union. Today, however, the competition is no longer with France or Germany — it is with the factories in China or elsewhere in Southeast Asia. 

“European customers are willing to pay a small premium for products made in Europe, but that premium is limited to around 10 - 15%,” says Zavadskis. “If our costs exceed that, production will move to Asia. The only way to remain competitive is through continuous process improvements and productivity through automation.” 

That is why, over a three-year period, the company invested €15 million, a project approved under Latvia’s state-supported major investment program with the support of Altum and the Investment and Development Agency of Latvia (LIAA). The funds delivered three major leaps: factory expansion, the launch of new product lines that alone added at least €8 million in annual turnover, and deep automation of existing processes that will raise labour productivity by 15% by 2028. “Automation is not a choice — it is a necessity if we want to keep high-value-added jobs in Riga,” stresses Zavadskis. The company is continuing to invest its own capital in automation and productivity, with planned investments of €7 million in 2025 and €8 million in 2026. 

The biggest challenges — people and geopolitics 

Despite rapid growth, several obstacles stand in the way. The loudest is the shortage of qualified technical specialists. Electronics engineers, automation experts, and production operators are in short supply. While talent availability remains a challenge, the issue is not one of quality but of scale. According to Zavadskis, Latvia offers a workforce with strong technical competence, high problem-solving ability, and a notably strong work ethic. The difficulty lies in attracting enough specialists at a time when many young professionals gravitate toward IT or R&D-focused roles, often underestimating the complexity of modern manufacturing. “A factory today is not about repetitive tasks,” he notes. “It involves diagnosing problems, ensuring continuity in a 24/7 operation, and taking responsibility for processes that directly affect global projects.” Bridging the gap between education and industrial reality, Lexel Fabrika positions itself not as a low-cost production site but as a skills-intensive environment where engineering, automation, and operational excellence intersect. 

“The second challenge is supply-chain disruptions and geopolitics — for example, discovering that some component suppliers have links to Russia, forcing the termination of cooperation and the search for new sources.” 

Zavadskis makes no secret of the fact that the people working here have a very high work ethic and excellent technical knowledge. “Competence is there and people are smart. In terms of numbers there may not be as many as we would like, but the quality is high.” Labour costs remain competitive within Europe, and state support instruments (LIAA, Altum, EU funds) work - even if bureaucracy sometimes demands patience. “We fought for three years to get this major investment project approved, but in the end, everything worked out. The support is real,” he summarizes. 

A Strategic Heart for Europe 

In the coming years Lexel Fabrika aims to further strengthen its role as a strategic European hub. The company plans to bring printed circuit board production in-house, reduce reliance on subcontractors, and transfer part of Schneider Electric’s manufacturing volume from Asia to Riga. This shift is driven by sustained investment in automation and productivity, enabling the factory to remain cost-competitive within the narrow 10–15% margin that allows European production to compete with Asia. The company continues to invest in people, training and attracting young talent, reinforcing the message that modern manufacturing is not a “harsh factory” but a high-skill environment where complex problems are solved daily and local teams contribute to global projects. 

2025 has already gone down as a historic year: €190 million in turnover, holding the number one position among six Schneider Electric electronics factories in Europe, and a decisive investment leap into the future. Outside the quiet factory doors fly both the Latvian and French flags, recalling the Schneider brothers who founded their first factory in the mid-19th century. In Riga, Lexel Fabrika continues to prove that Latvia can not only attract global industrial leaders but also grow into their strategic heart in Europe.