Landscape of the European Chemical Industry 2018

Landscape of the European Chemical Industry 2018

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Latvia

Turnover

€699 million

Number of companies

500

Direct employees

8,901

National contact

Association of Latvian Chemical and Pharmaceutical Industry (Lakifa)

Raina Dureja-Dombrovska

Executive Director

lakifa@ lakifa.lv

Latvia

Chemical industry snapshot

Building on historic strengths

With sales of €699 million in 2017, 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. Chemical and pharmaceutical companies have always been the high added value of Latvian products, consisting of both our scientific achievements and the ability of entrepreneurs to turn ideas into competitive products.

Rooted in research

Chemicals and pharmaceuticals account for 10% of manufacturing industry by turnover, and the last year we strengthened ourselves as the fourth largest industry in Latvia, exporting 72% of its’ 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?

An important employer

Latvia’s chemical industry had around 500 companies in 2017; all but a handful were SMEs. Employment in chemicals and pharmaceuticals is stable at 4,000 people, and another 5,000 work in plastics and rubber compounds subsector and glass fiber industry. Our industry is in second place compared to the average salary level among all sectors of Latvian economy. This implies both high tax payments to the state budget and a higher rate for the Latvian economy as a whole.

Leading with exports

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

 

We are exporting worldwide, but 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 higher education institutions and professional schools 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, The Life Sciences Cluster of Latvia comprises about more then 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.