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Real Economy News in Real Time
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Lithuania seeking trade partnership with South Africa

4th November 2016 BY: Keith Campbell
Creamer Media Senior Deputy Editor

The first-ever trade mission to South Africa from Lithuania, although small, represented no fewer than six sectors of the latter country’s economy. The just-concluded mission is part of the small European country’s programme of diversifying its trade and investment partners and expanding into the global economy.

“South Africa is an important country in Africa and this mission is the first Lithuanian embassy in sub-Saharan Africa,” points out Lithuanian ambassador Sigute Jakstonyte. “My government decided to open this embassy in Pretoria because of encouragement from the Lithuanian business community. We are looking for opportunities to expand business. Our objective is to grow business.”

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Lithuania is one of three countries on the eastern shore of the Baltic Sea, in North East Europe, which regained their independence following the collapse of the Soviet Union. (The other two are Latvia and Estonia.) Although linguistically and culturally distinct, they are generally grouped together as the ‘Baltic States’ (a term which, confusingly for outsiders, excludes the other countries bordering the Baltic – Russia, Poland, Germany, Denmark, Sweden and Finland). Lithuania has a population of three-million, a gross domestic product (GDP) of €37-billion, a GDP per capita of €18 000 and an average annual growth rate, since 2011, of 3.3% (last year, it was 1.8% and it is forecast to be 2.8% this year). The country is a member of the European Union (EU) and uses the euro as its currency. The capital city is Vilnius.

“Our country ranks thirty-sixth in world competitiveness, according to the World Economic Forum,” she highlights. “We rank twentieth in the Doing Business index of the World Bank. We’re strategically located on a crossroads between north, east, south and west. “We have access to 750-million potential customers around us – 300-million in the EU, 240-million in Russia and other former Soviet States in Europe, and about 110-million in the Baltic Sea region. This creates lots of opportunities. Most Lithuanian businesspeople speak English. English is the business language in Lithuania.

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“Our priority, for long-term development, is to create a knowledge-based economy driven by strong interaction between industry, science and education,” she reports. “We already have a very strong information and communication technology (ICT) sector in Lithuania. About 60 major multinational corporations have set up shared service centres in Lithuania, including major banks such as Barclays, Danske Bank and Western Union. There is a Technology and IT (information technology)Festival, LOGIN, in Vilnius every two years. Eskimi, the Lithuanian-developed and -based social network, now has 21-million users across Africa, including South Africa.”

Last year, two-way trade between Lithuania and South Africa was worth almost €100-million. Lithuania’s main imports from this country were phosphate products, followed by fruits and precious metals. The Baltic State is increasing its imports from South Africa. Lithuania’s main exports to this country are wheat, other cereals and plastics. Vilnius has two government agencies to promote business: Enterprise Lithuania and Invest Lithuania.

“There has been a significant interest in South Africa by Lithuanian business,” affirms international business consultancy The Business Mill CEO Zivile Jankauskaite, who hails from Lithuania. “There have been proposals for trade missions before, but this was the first and it is no coincidence that it follows the opening of the Lithuanian embassy in South Africa – Lithuania is the only one of the three Baltic States to have an embassy in this country.”

The mission was organised by Enterprise Lithuania on quite short notice, following a presentation on business opportunities in South Africa by Jankauskaite. This was attended by 30 companies. Although the subsequent business mission comprised only six companies, each represented a different sector of the Lithuanian economy. They were a manufacturer of agricultural equipment (which successfully competes in the Norwegian market against Norwegian group Kverneland); an organic food company (which owns one of the biggest organic farms in Europe); a custom-made wooden furniture company (which already exports to Sweden, the UK and Ireland, and to customers in the hospitality and corporate sectors – furniture manufacture is a niche sector for Lithuania); a company that manufactures automotive filters for both commercial and private vehicles (which already exports to 45 countries, including all the major markets); a manufacturer of animal health products; and an IT company. The IT enterprise specialises in ecommerce and ICT and is already operating in South Africa, but as a subcontractor to a UK group, and now wants to be directly involved with this country in its own right. “IT is a new strength for Lithuania. The sector is vibrant; there are quite a few specialists in Lithuania, with high quality and low costs.

“All six companies are willing to manufacture for South African businesses under South African brands – they do not insist on pushing their own brands,” she emphasises. “With Lithuania, you get German quality for a little more than the Chinese price!” 

EDITED BY: Martin Zhuwakinyu Creamer Media Senior Deputy Editor
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