Landscape of the European Chemical Industry 2017

Landscape of the European Chemical Industry 2017

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Latvia

Number of companies

198

Direct employees

4,740 Plus 2,470 in plastics and rubber

National contact

Association of Latvian Chemical and Pharmaceutical Industry (Lakifa)

Raina Dureja

Executive Director

rdureja@lakifa.lv

Latvia

Chemical industry snapshot

Building on historic strengths

With sales of €548 million in 2015, the chemical and pharmaceutical industry is a longstanding cornerstone of the Latvian economy. The historic commitment to a strong research, development, and manufacturing base in sophisticated chemical and pharmaceutical products was reaffirmed in 2009 when government made it a priority sector.

Rooted in research

Chemicals and pharmaceuticals account for 8% of manufacturing industry sales in Latvia, and pharmaceuticals is the biggest sub-sector, providing 33% of output.

 

Experience and traditions, skills, efficiency and R&D capacity underpin an ongoing development of the chemical, pharmaceutical and biotechnological sector.

How are we doing?

Embracing traditional strengths

Historically, Latvia developed and manufactured a quarter of the drugs produced in the Soviet Union. Its chemical manufacturing industry spanned plastic compounds, paints and household chemicals.

An important employer

Latvia’s chemical industry had 198 companies in 2015; all but a handful were SMEs. Employment in chemicals and pharmaceuticals is stable at 4,740 people, and another 2,047 work in plastics and rubber.

Leading with exports

Latvia produces and exports a diverse range of pharmaceuticals and chemical goods, from unique anti-influenza medicine to petrochemicals, household chemicals, and paints.

 

The core export markets are Baltic neighbours Lithuania, Estonia and the Confederation of Independent States (CIS) followed by Denmark, Germany, Sweden, and the Netherlands.

Backed by education and skills

Seven universities and higher education institutions collaborate closely with industry to educate and train young people in the skills needed in our industry.

Preparing the future

Strengths

  • Skilled, flexible and relatively cheap workforce
  • Modern, flexible plants producing to EU standards
  • Strong research capacity
  • High added value products
  • Proximity and expertise in Russian markets
  • Broad international cooperation between exporting enterprises
  • Positive attitude: the industry is a priority sector for economic development

Weaknesses

  • Reliance on imported raw material
  • Government creates pressure to increase taxes and fees
  • Limited industry resources to invest in business development
  • Lack of new production technologies (except pharmaceuticals)
  • Brain drain: able scientists often move abroad
  • Reluctance of research institutions to undertake relevant research
  • Ageing workforce
  • Skills gaps

Our contribution to a competitive Europe

To reinforce R&D investment, the Latvian government and Education and Science Ministry will support nine National Level Research Centres (NLRC) including centres dedicated to pharmacy and bio-medicine, food processing technologies, nano-structured and multifunctional materials, structural and construction technologies and public health and clinical medicine. Latvian CRO (Contract Research Organization) activities are also gaining recognition.

Clustering to compete globally

Two sectoral clusters have been identified, which aim to win a place in global markets.

 

The Life Sciences Cluster of Latvia comprises about 30 pharmaceutical, chemical, and biotechnology companies, as well as educational and research institutions, skilled in organic chemistry and biopolymer research, microbiology and virology, genomics, immunology, biotechnology, and wood chemistry.

 

The Clean Technology Cluster embraces 21 enterprises and research and educational institutions involved in renewable energy, waste and pollution, water management, clean technology, equipment and solutions and energy production, accumulation and storage.

 

A Smart Specialisation Strategy is being implemented in the chemical and pharmaceutical industry.