28.06.2021 - Economy

Norwegian investors in Latvia outline future plans

The Norwegian Chamber of Commerce in Latvia (NCCL) says Norwegian investors continue to see opportunities in Latvian real estate, manufacturing and business service industries. Over the past two weeks, three of the biggest Norwegian investors and job-creators in Latvia – Linstow Baltic, Orkla Latvija and Norwegian have announced their plans for the months and years to come.

Linstow Baltic (LB) recently announced its acquisition of the “Sporta 2 quarter” and plans to develop it into a "multifunctional and liveable urban quarter, combing modern contemporary design and functions with some of the authentic qualities of the area." 

The development will focus on creating office infrastructure, but will also include retail, service and residential space as well as premises for public and corporate events, restaurants and cafes, according to Linstow Baltic.

“The company intends to build out Sporta iela 2 as a mixed-use urban development project over the years to come in what the company considers as one of the most prospective areas in downtown Riga. This acquisition demonstrates Linstow Baltic’s long-term commitment to enhancing our presence in Latvia further and follows our strategy to develop a diversified real estate portfolio,” said Chairman of the Board of Linstow Baltic Frode Grønvold.

Earlier this month Orkla Biscuit Production, part of the Orkla investments in Latvia, held a ridgepole celebration marking the final stage of the construction process of its brand new biscuit and wafer factory in Ādaži with a floor space of more than 30,000 m2. The project is expected to be completed in 2022, creating "at least 250 new jobs", according to the company.

According to Orkla, the new plant will be the largest such plant in the Baltic countries and Scandinavia. After the completion of the project, Orkla will have seven production plants in Latvia, three of them located in Ādaži. It is expected that 75% of the plant’s output will be exported.

“Construction of the new biscuit and wafer factory in Latvia is Orkla group’s acknowledgement of our skills, at the same time, it is the largest group’s investment project of the past years,” said SIA Orkla Biscuit Production and SIA Orkla Latvija board chairman Toms Didrihsons.

Low-cost airline Norwegian, representing the industry that arguably has been hardest hit by the COVID-19 pandemic has also pledged to continue setting up operations in Latvia, according to the NCCL.

“Finally, after a turbulent year, Norwegian is back! And so are our people and our customers as the world is gradually going back to normal. This year we inaugurated our new Business Centre in Latvia with approximately 100 dedicated employees ready to help our customers with their next travel with Norwegian,” said Knut Olav Høeg, Executive Vice President IT and Business Services at “Norwegian”.

Norwegian announced plans of creating a shared service centre in Riga last September and has been building its team on the ground, creating new job opportunities at their office in Jaunā Teika. Norwegian has connected Norway and Latvia since 2005 and said they would re-launch departures between Oslo and Riga "within a short period" without giving a specific date.
According to Lursoft, Norway is the eighth-largest foreign investor in Latvia with an investment portfolio exceeding 350 million euros.

According to a Norwegian Investor Sentiment Index conducted by the NCCL in 2020, 45% of current Norwegian investors in Latvia plan to increase their investments in the future, whereas 34% stated that at the point of taking the survey they had not decided on further investment plans yet.

According to the same survey, the most commonly cited factors that would positively affect Norwegian investors’ decision regarding further investments in Latvia would be the improvement of the overall market situation, a more predictable and simpler tax system, and the availability of skilled labour. Some of the factors that would negatively impact further Norwegian investments in Latvia would be increased tax burden, grey economy and corruption, shortage of skilled labour and increased production costs, according to the NCCL survey.

Source: eng.lsm.lv

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