Baltic Business Quarterly: Autumn 2020

A U T U M N 2020

2.99 €

30 | Interview

Heading towards bioeconomics, Mārtiņš Lācis, Executive Board Member of JSC Latvijas Finieris

40 | Digitizing forestry Digital tools for foresters and others

73 | Culture

Wooden wonders of architecture

24 | COV E R S TO RY

Baltic forestry sector – a worldclass player

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E D I TO R I A L | 1

T

oday Germany will get blacklisted. At least in Estonia, Latvia and Lithuania because it belongs to the countries with more than 16 cases of COVID- 19 per 100,000 over the last 14 days.

With that, special regulations come into force. Travellers from Germany entering the three countries must selfisolate for a period of 14 days. That will effectively stop business travel between our countries and Germany.

It is fully understandable that countries seek to minimize the risks of increased COVID- 19 cases. If we take a wider perspective, however, we have to see that we are far from a coordinated approach in Europe. In Finland, for example, this regulation does not apply as of 16 cases, but already from 8-10 cases. Poland, on the other hand, has no such limit.

Germany itself has a different certification procedure for high-risk regions, i.e. it does not operate with countries but with regions in countries. Croatia, for example, was not classified by the Robert Koch Institute (RKI) yesterday as a risk area as a whole, as this was only applied to the two regions of Šibenik-Knin and Split-Dalmatia, where most cases occur.

Therefore, we firstly need to make sure that we stop the virus and not the economy. This means that we must find a way for business travel to continue – especially in times of COVID-19.

Secondly, we should quickly agree within Europe on one standard set of rules that is applied throughout the European internal market. It is not acceptable that now 27 member states each apply their own set of rules and cause additional transaction costs on an already strained economic situation. Business needs to know how to operate in these difficult times. For this reason, I call upon the politicians in Germany, Estonia, Latvia and Lithuania to find a solution that meets this need.

I wish you all good health and, at the same time, successful business in difficult times.

Yours, Florian Schröder – Executive Board Member

Baltic Business Quarterly is a publication of the German-Baltic Chamber of Commerce (AHK) and is released four times a year.

For questions or subscriptions, please contact info@ahk-balt.org

Deutsch-Baltische Handelskammer in Estland, Lettland, Litauen German-Baltic Chamber of Commerce in Estonia, Latvia, Lithuania

2 | CONTENT

4 Business in Picture 10 Guest Commentary:

The never ending monument wars in Tallinn

12 Baltic Business News 16 Business Agenda: Where you need to be

19 What’s hot? Upcoming

42

cultural events

22 My Office: Kaarel Kotkas,

Founder and CEO of Veriff

WOOD DESIGN

Other uses of wood

24 Cover Story: Baltic Forestry

We offer an insight into some ideas of Baltic designers.

sector – a world-class player

30 Interview: Latvijas Finieris

focuses on bioeconomics, Mārtiņš Lācis, Executive Board Member of the JSC Latvijas Finieris

34 Baltic wood Industry: No negative impact so far

40 Digitizing Forestry: Digital

tools for foresters and others

44 Skilled-Up: Skills for the Baltic wood industry

46 Crisis as chance: Business Vs. Covid-19

50 COVIDictionary:

The Corona ABC

60 Law & Tax: Legal effect of

electronic signatures in the Baltics

56

BUSINESS LOCATION

Liepāja is ready to welcome new investors

In recent years, 6 new factories have been built, 5 are still under construction, but at least 7 are being designed.

62 Trade Fairs: Interview with the new CEO of Messe Düsseldorf Wolfram N. Diener.

66 AHK Members: Who’s new in AHK’s Baltic network?

68 Event Reports 73 Culture: Many beautiful wooden

houses in the Baltics can still be admired in their original setting

78 Travel: Forest tourismfeel the forest vibe

80 Shooting star: Mareks Liepa,

the bath master of Forest SPA

70

INTERVIEW

Latvian architect Zaiga Gaile about the future of historical wooden buildings

“From the point of sustainability, this is a longterm investment – and another level of quality of life.”

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Photo: Matthias Tammet/ Office of the President of Estonia

KALJULAID MADE HER FIRST POSTLOCKDOWN VISIT TO GERMANY Estonian President Kersti Kaljulaid travelled to Berlin at the end of June to celebrate the Estonian Embassy’s 100th anniversary. The head of the Estonian state also met with German President Frank-Walter Steinmeier and representatives of an influential think-tank and an industrial association. President Kaljulaid discussed energy, the economy and the future of Europe with her German counterpart. She also drew attention to the importance of sustainable transport and gave the e-bike model Stout, made by the Estonian company Ampler, as a national gift to the German Federal President, Frank-Walter Steinmeier. LM

BUSINESS IN PICTURE | 5

Spring 2020

6 | BUSINESS IN PICTURE

BUSINESS IN PICTURE | 7

Lidl Latvija and the construction company Merks have announced the completion of the construction work and commissioning of Lidl’s logistics center at Dzelzavas street 131, Dreiliņi, Rīga. The newly built 51,000sqm facility will serve future Lidl stores in both Latvia and Estonia. The logistics center also houses the national headquarters for Lidl Latvia.

Jakob Josefsson, CEO of Lidl Latvia and Lidl Eesti (from left followed by Andris Bišmeisters, the CEO of construction company Merks and Member of the Board from Lidl Latvija Arūnas Dzikas) stated that the logistics center in Dreiliņi will be providing operations for Latvia and Estonia: “The construction work is complete and the next step is to install modern equipment, which will help us to maintain the highest quality of all the incoming goods and ensure their timely delivery to Lidl stores.” LM

Photo: Jānis Siliņš

LIDL LOGISTICS CENTER IN DREILIŅI COMMISSIONED

8 | BUSINESS IN PICTURE

Photo: Ministry of Foreign Affairs of Lithuania

HAND - IN - HAND IN SOLIDARITY FOR BELARUS Lithuania recreated the spirit of the Baltic Way with a human chain for Belarus on 23 August. Tens of thousands of people joined hands in a show of solidarity for demonstrators in the neighbouring country. Some 50,000 people formed a 30-kilometre human chain called Freedom Way that stretched from Vilnius to the town of Medininkai on the border to Belarus. The rally was another sign of support for a peaceful change following the contested elections and the mass protests and strikes that have erupted in Minsk and elsewhere in the country.

With a gross domestic product slightly higher than that of Lithuania, Belarus is also one of Lithuania’s main economic partners. The business sector has already sounded alarm over the devastating economic impact of state repression and on-going protests that are also affecting Lithuanian exporters and the some 600 Lithuanian-owned companies operating in the country. AW

BUSINESS IN PICTURE | 9

10 | C O M M E N T

by KAAREL KRESSA JOURNALIST FOR EESTI PÄEVALEHT AND DELFI

n

ew initiatives to build or replace monuments in Tallinn almost never go as well as planned. A notorious example is the 2007 relocation of the “Bronze Soldier” Soviet-era war monument, which was followed by riots among the Russian-speaking minority, cyber attacks directed from Russia and, ultimately, the realignment of Estonia´s transit economy and creation of NATO´s new cyber defence centre.

2007 also saw the beginning of the debate to build a new memorial to the War of Independence. There was not much disagreement about whether the event itself is worth celebrating, but the opponents argued that the winning project lacked artistic subtlety and ignored the architectural landscape already existing in Tallinn’s central Vabaduse square. The architects’ and artists’ associations complained that there was almost no consultation with professionals and the jury of the design competition was mostly filled with politicians.

Even some authors expressed dissatisfaction when the Cross of Liberty was finished in 2009. Although the initial design had envisioned a shining white glass cross, the core of the monument was ultimately built in concrete and covered with greenish-grey glass panels.

The multiple technical problems, including glass panels falling off the structure, continue to this day.

The curse extends to lesser-known monuments. The 2010 statue by sculptor Mati Karmin to celebrate the Estonian poet Marie Under did not attract similar criticism, but it suffers from a poor location, situated behind the national library’s parking lot.

There is also the case of sculptor Tauno Kangro, who has filled Tallinn’s public space with his naivist works during the last decades, despite being reviled by the critics and the media. His most ambitious plan would have seen a 24-metre bronze statue of Kalevipoeg (a hero from Estonia’s national epic) built in the Bay of Tallinn. The project was too much even for Kangro’s benefactors in the mayor’s office and it was shelved permanently in 2017.

It should come as no surprise then that the city government’s latest sculptural initiative has attracted controversy. Last year,

Publicity photo

The never-ending monument wars in Tallinn

Tallinn announced that a monument to the former president Konstantin Päts shall be built in a prominent place next to the National Opera.

Predictably, a large part of the criticism has focused on Päts’s controversial legacy. Although one of the forefathers of the Estonian republic, he was also the organizer of the 1934 anti-democratic coup and later oversaw the “silent surrender” to Soviet demands in 1939-40. Having a heated argument over Päts’s biography is as integral a part of Estonianness as a sauna or a sprat sandwich.

However, the project has raised opposition not only among liberal columnists, but also among many conservatives. The winning project is a 3-metre statue entitled “Head of State”, which depicts only Päts’s head.

The critics argue that the style invites comparisons with Socialist sculptures and American Olmec traditions.

“Not an artistic success, but not too embarrassing either”, commented the Arts Academy rector Mart Kalm.

Less charitable was Maarja Vaino, the conservative director of Tammsaare Museum, who resigned from the competition jury before the last vote, arguing that the winning project is a disgrace to Päts’s memory.

The ultraconservative portal Objektiiv argued that the project amounts to “spitting in the face of the Estonian people”. On the other hand, the playful design has managed to reconcile some of the liberal critics. Some art critics are suggesting that the head might actually have a positive effect on city landscape. Even detractors of Päts take consolation in the thought that Päts himself would not necessarily appreciate the way he is being depicted. It has been noted that the beheaded sculpture invokes disturbing comparisons, like the story of the Estonian “kings” beheaded during a medieval uprising.

“Maybe Päts actually deserves it”, commented the journalist Alo Raun.

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12 | B A LT I C B U S I N E S S

airBaltic Training establishes Diamond Aircraft service centre The subsidiary of the Latvian national airline airBaltic – airBaltic Training – has received certification to establish an authorized service centre for Diamond Aircraft at its base in Liepaja International Airport. airBaltic General Aviation Services is now entitled to perform warranty and post-warranty maintenance functions for Diamond Aircraft DA40 and DA42 aircraft types as well as provide a guarantee, approved by the manufacturer. airBaltic Pilot Academy has also opened the application process for new student groups next year.

Latvia records one of EU’s smallest decreases in exports Latvia’s exports in January-May this year decreased 5% year on year, which was one of the smallest decreases in the European Union, according to Eurostat. Denmark was the only EU member country to record a smaller decrease in exports than Latvia, at 4%. The biggest decreases in exports in January-May were recorded in Luxembourg (31%) and France (22%). In Estonia, exports decreased by 10%, while Lithuania recorded a 9% decrease.

Latvia’s Knauf building materials maker raises turnover by 7.8% Latvia’s Knauf building materials maker turned over €70.88 million in 2019, which is an increase of 7.8% against the previous year, while the company’s profit grew 20.5% on year to €14.343 million.

This year, Knauf is not planning any job cuts and the company’s production capacity does not require importing raw materials from the group’s other companies.

Projecting construction growth in the Baltic states, Knauf plans to improve its sales and profit results this year, the management said.

B A LT I C B U S I N E S S | 13

Adobestock, lauren-fleischmann unsplash

Neo Group to launch a 1 MW solar power plant Lithuania’s Neo Group expects to launch a 1-megawatt solar power plant by the end of the year, expecting to save more than 50,000 euros in annual energy costs, informs leta.lv. Neo Group is a leading PET (polyethylene terephthalate) manufacturer for the packaging industry, located in the Free Economic Zone (FEZ) of Klaipeda. The solar farm project is co-funded by the EU.

Estonia’s Helmes to buy Latvia’s T2T Estonian software company Helmes has signed an agreement with the Latvian technology and entertainment company Tet to purchase all the shares of their development services subsidiary T2T. The purpose of the transaction is to accelerate growth and attract new employees and strategic customers, Helmes said. By agreement of the parties, the price of the transaction will not be disclosed. T2T is a software development company that has been operating independently of Tet, formerly Lattelecom, for some time now and which, in addition to the services provided to Tet, has carried out major projects for both public and private sector clients. Helmes is an international software firm, whose main clients include international organizations like the OECD, International Energy Agency, Kuehne + Nagel, SEB, Telia Company, Solera, and ServiceChannel. Helmes is headquartered in Tallinn, with branches located in Minsk, Brest, Mumbai, San Diego and New York as of the end of last year.

Milda Mitkutė named Top 10 Female Founders in the world Milda Mitkutė is the co-founder of Vinted / Kleiderkreisel, the largest online international C2C marketplace in Europe dedicated to second-hand fashion. Founded in 2008 with a website, the company reached a new milestone with their launch in Germany in 2009. With more than 13+ million users it has become a worldwide success. Vinted changed the mindset of its customers from a throwaway society to a mindful fashion consumption. The rating was created by Business.Financing.co.uk earlier this year.

14 | B A LT I C B U S I N E S S

Rail Baltica receives 184 million euros of funding

Best digital skills in EU

The Rail Baltic global project in the Baltic states was granted additional 184 million euros in Connecting Europe Facility (CEF) financing to be invested in the project implementation until 2024.

Rail Baltica has thereby already secured around EUR 1.2 billion from the EU and national funds. The Member States and EU institutions’ decision once again confirms Rail Baltica as one of the key European flagship infrastructure projects. With ongoing design works on 643 km of the main line and international passenger stations, the project has reached its maturity and continues to enjoy strong political support.

According to a Europe-wide survey among EU Member States, Croatia has the highest share of individuals aged 16 to 24 with basic or above basic overall digital skills (97%), followed by Estonia, Lithuania and the Netherlands (all three 93%) as well as Greece (92%). By contrast, the lowest shares were observed in Romania (56%), Bulgaria (58%), Italy (65%), Hungary (68%), Latvia and Luxembourg (both 75%).

In 2019, four in five young people (80%) aged 16 to 24 in the European Union (EU) had basic or above basic digital skills. This was 24 percentage points higher than the share of individuals aged 16 to 74 (56%).

Estonian-Latvian offshore wind farm in the Gulf of Riga In July, the Estonian government signed a preliminary agreement for the Estonian-Latvian offshore wind farm in the Gulf of Riga. “The offshore wind farm zone to be developed jointly by Estonia and Latvia is a unique project which will contribute to the achievement of both countries’ renewable energy goals, and also creates new opportunities for other offshore wind park developments,” said Taavi Aas, the Estonian Minister of Economic Affairs and Infrastructure. The completion is scheduled for 2030. Estonia and Latvia are both trying to reduce the dependency on electricity from the Russian Federation.

Shutterstock, Pixabay

B A LT I C B U S I N E S S | 15

German bus company Flixbus to start trips from Baltics

Estonia’s leading Position in EUs cyber diplomacy and cyber sanctions For the first time, the EU imposes sanctions in response to cyber-attacks. Estonia has been part of a group of EU member states that were leading the preparations and had a significant involvement in the EUs new cyber diplomacy regime. Estonia has repeatedly denounced concerns about irresponsible government behavior in cyberspace. The EU remains committed to a global, open, stable, peaceful and secure cyber space and therefore reaffirms the need to step up international cooperation to promote the rules in this area.

The German bus company Flixbus is starting trips from the Baltics to Eastern and Western European cities with the first trip, from Tallinn to Warsaw. The company’s long-term strategy in the Baltics is to lay the foundation for a longdistance route between Estonia, Latvia and Lithuania, the company said. Flixbus’ new routes will depart from Tallinn, Riga, Vilnius and Kaunas.

Among the destinations are both Warsaw and Berlin. Flixbus currently operates in 29 countries in Europe, Asia and North America, connecting approximately 2,500 different destinations.

Detailed spatial plan for Manniku technology park Tallinn has endorsed the detailed spatial plan for the development of production and commercial buildings on 28 hectares of land in the Silikaadi technology park in the Manniku district on the southwestern outskirts of the city. It will be possible to establish on the 22 plots of the technology park stock office buildings up to four stories high along with traditional commercial, warehouse and production buildings. In total, the detailed spatial plan determines building rights for the establishment of 65 buildings and structures.

16 | B U S I N E S S A G E N D A / LAT V I A state-of-the-art accessories and many more products for refreshing your homes, offices or other premises! Baltic Design Market offers pieces of work by well-known and emerging designers.

Get home furnishing and maintenance advice at workshops and presentations held by the industry’s leading experts.

The Trade Show for Furniture, Interiors, Lighting and Design takes place at Kipsala International Exhibition Centre.

Business technology fairs and conferences: RIGA COMM 2020 15.10.2020 – 16.10.2020

IT and business professionals and stakeholders will meet at RIGA COMM 2020, on 15 and 16 October, where resource, document, personnel management and security system developers and suppliers, cloud service, Internet and digital marketing providers, web and mobile app developers, and ICT producers will present both readyto-use and tailor-made solutions to companies, municipal authorities and organizations in different sectors. Visit them at Ķīpsala International Exhibition Centre. eCOM360 conference: Phenomenal Practitioners 06.10.2020 Following last year’s keynotes by leading digital practitioners from Facebook, Walmart, Uber, Alibaba, Google, The New York Times, Yandex, Lenovo, and many others, this year’s eCOM360 conference is coming back with even higher ambitions.

Save the date – 6 October 2020 in Hanzas Perons. “Phenomenal Practitioners” is the core theme of 2020, implying that conference organizers are about to practically redefine & improve upon your digital strategy to stand out in 2020/2021.

The philosophy of “ICEBREAKERS’20” is discovering the submerged part of an iceberg – to encourage young professionals to explore the unknown diversity of business opportunities in various fields, and to urge students to raise their ambitions and look

The most ambitious and magnificent beauty industry event in the Baltic and Scandinavian countries that offers the latest beauty products, information on beauty trends and expert advice.

More than 340 participants from 20 countries take part every year, offering both professional cosmetics and equipment, as well as consumer products. International and local experts share the current trends in 12 large-scale beauty industry conferences and a number of seminars at Ķīpsala International Exhibition Centre.

FURNITURE & DESIGN ISLE 23.10.2020 – 25.10.2020

Tech Industry Riga 26.11.2020 – 28.11.2020

In the “Design Isle” hall, find original interior decorating items, the latest furniture and home decor collections from the Baltic and other European countries, sophisticated luminaires,

Tech Industry is an international exhibition of industrial production, engineering and automation in Riga. There will be a large number of international exhibitors, new technologies and products from the fields of hydraulics, automation, machine technology and control systems. The international trade fair is the biggest and most important event for industrial production in the Baltic states and will take place at Ķīpsala International Exhibition Centre in Riga, Latvia.

AdobeStock, nathan-dumlao- unsplash

ICEBREAKERS’20 09.10.2020

beyond the borders of Latvia in order to promote the world experience and knowledge. They will learn about attracting funding and grants, and navigating in the new social distancing economy. They will create new, strong teams and find unique solutions to overcome this unexpected and sudden obstacle the world is facing today – this year in a digital environment!

BALTIC BEAUTY 06.11.2020 – 08.11.2020

B U S I N E S S A G E N D A / E S TO N I A | 17 coffee roasting, operators of cafes or restaurants as well as sales people.

At Tallinn Creative Hub, the former central power station of the city, visitors can taste different coffee specialities in a stylish atmosphere with music and entertainment.

Beauty Word Autumn 09.10.2020 – 11.10.2020

The focus of Beauty Word Autumn is on professional beauty products and procedures, offering work supplies, uniforms, training, masterclasses and newest trends in the field for beauty, health and wellness specialists. Mass consumption and end consumer targeted products are also presented of course, but rather than focusing on retail sales, the main aim of the autumn fair is to offer new ideas, inspiration and new knowledge. Join at Estonian Fairs Ltd. in Tallinn.

Tallinn FoodFair 29.10.2020 – 31.10.2020

Tallinn Coffee Festival 05.09 – 06.09.2020

The Tallinn FoodFair will inspire, entertain and engage trade professionals at Eesti Naituste AS in Tallinn. In addition, those interested will have the opportunity to compete for coveted and prestigious awards such as chef, waiter, baker or confectioner of the year. Conferences, presentations and tastings will attract both food professionals and hospitality specialists; these are a must for anyone interested in new ideas and taste sensations.

The Tallinn Coffee Festival is an event around coffee and other hot drinks such as tea and hot chocolate.

It is aimed at both coffee lovers in learning interesting facts about methods of preparation and the coffee culture in general. Renowned industry experts from Estonia all over Europe hold presentations, present the latest equipment and organize master classes. A barista competition takes place as an additional highlight general and trade visitors involved in

Baltic Business Aviation 19.11.2020 Baltic Business Aviation gives a opportunity to the attendees with a unique opportunity to debate on topics such as the future of business aviation, learn about the latest developments in light jets, explore the regional air taxi market, discuss different business models, learn about the regional infrastructure development, and network with leading experts.

18 | B U S I N E S S A G E N D A / L I T H U A N I A

revive your business. Key Themes: How to navigate change, how to derive benefit out of the situation? Mro and leasing: turmoil or new opportunities?

What’s trending in the skies? Key Speakers will be announced soon.

LOGIN 24.09.2020 – 25.09.2020 Vilnius

International Contemporary Art Fair ARTVILNIUS 02-04.10.2020

The international contemporary art fair ArtVilnius is the largest event of visual arts in Eastern Europe.

The 11th edition ArtVilnius is a place where art collectors, professionals and art lovers can discover a vibrant art scene not only from Baltic and Eastern European countries, but also meet galleries and artists from France, Germany, Italy, Austria, etc.

Auto Bazar 04 – 05.09 Vilnius

Energy Tech Summit 2020 22.09.2020 – 23.09.2020 Vilnius The annual Energy Tech Summit is gathering top European energy and mobility investors, entrepreneurs, and government leaders at an exclusive two days event in Vilnius, Lithuania lead and hosted by Contrarian Ventures.

In these unprecedented times Energy Tech Network is bringing quality live

and on-demand content, context, engaging in-depth discussions, intentbased matchmaking & 1:1 networking.

AIR Convention Europe 14.09.2020 – 17.09.2020, online Discover Digital Week – a fully virtual free conference that brings actionpacked ideas from top aviation experts and powerful networking tools to

Taste Vilnius HORECA 05.-07.11.2020 Taste Vilnius HORECA exhibition, oriented at the HoReCa equipment, hospitality and food products becomes a unique international event in the Baltics. A renewed exhibition is dedicated to demonstrating a rapid progress of hospitality business, the newest innovations and technologies in the gastronomy world, food, beverages and packaging industry.

Photo: ArtVilnius organizers photo, ryk-porras-unsplash, luka-slapnicar-unsplash

Auto Bazar is a specialized exhibition of vehicles, parts, equipment, and the largest aerodrome in Lithuania.

Visitors will be able to see the cars live, communicate with sales representatives, evaluate and compare cars. There will be test drives, which will allow visitors to try out all the displayed cars in one place.

The largest two-day innovation festival in the Baltics, aka the celebration of digital culture. Dating back to 2007 as a bloggers’ gathering, now counting 14 years and 5,000 attendees each year, LOGIN takes over the biggest exhibition and congress venue in Vilnius, where seven stages host 150+ speakers holding sessions on the most relevant topics of today. Focusing on innovation and progress, we thrive to give the best insights on what is actually happening around, and to glance into the future. Inspiration, networking, and brain teasers are included.

W H AT‘S H OT | 19

what‘s hot Tartu City Marathon 03.10.2020, Tartu (Estonia)

The Tartu City Marathon track, which runs on the streets of the historical university town, has been considered as the most exciting marathon courses in Estonia. The following distances are opened: marathon (42 km), halfmarathon (21 km) as well as 10 km. On the 10 km distances also the Nordic Walkers are warmly welcome. In addition, special children races and a cool Friday Night Run await to hit the track. All together up to 8000 runners enjoy the golden autumn in the Estonian university town.

Black Food Festival 21.11.2020, Tallinn (Estonia) The Black Food Festival is coming to Estonia for the first time this year. Having set out its stall in Berlin, London and New York in the last 12 months, it’s be coming to the Põhjala factory in Tallinn on Saturday 23 November. The aim is to open the door to culinary creativity and experimentation and to do so under the umbrella of an enjoyable city festival during some of the blackest nights of the year. Good to know: The black part is not artificial – it’s entirely natural.

IV Narva Opera Festival 4.09.2020 – 13.09.2020 (Estonia)

Kreenholm Textile Manufacturing Enterprise, founded 161 years ago, had a choir that was once conducted by the grandfather of Georg Ots, one of the most loved singers in Estonia. Now we can enjoy contemporary opera and ballet from Estonia and its neighboring countries in this deliciously historical environment. Narva Opera Festival is the meeting place of east and west, history and the present day, aristocrats and bohemians. The freshest breeze of world musical theatre is blowing around the abandoned industrial complex. In Kreenholm, you can experience czarist airs, Soviet festivity, and present-day cosmopolitanism. Here avant-garde boldness is combined with the best traditions.

Pärnu Film Music Gala

09.09.2020-13.09.2020 (Estonia)

Pärnu Film Music Festival is one of the most esteemed classical music festivals in Estonia and it is becoming one of the most significant orchestra festivals in the whole Europe.

In addition to the extremely high-level performances during the festival, it also plays an important role in teaching young musicians at Järvi’s Academy. Soloists: Uku Suviste, Sofia Rubina, Pekka Kurki (Finland), German Gholami (Spain); Andrus Rannaäär & Mihhail Nikitin Quartet; ÜENSO Orchestra; Conductor Jüri-Ruut Kangur.

20 | W H AT‘S H OT

Festival of contemporary art – Survival Kit

04.09.2020 – 04.10.2020 Riga (Latvia) The theme of the 2020 festival – It is Dangerous to be Safe – is related to the discourse on security and political violence. The Survival Kit 11 program will consist of an exhibition of contemporary art, discussions with artists, film screenings, tours and creative workshops. The curator of this year’s festival is Katia Krupennikova.

The Survival Kit International Festival of Contemporary Art, which attracts more than 10,000 visitors annually, is the largest contemporary art event in the Baltic states and has been held since 2009. The festival is organized by the Latvian Centre for Contemporary Art.

Rihards Zariņš (1869–1939).

What Latvia’s Forests Are Whispering 04.07.2020 – 25.10.2020 Riga (Latvia)

In organizing an exhibition devoted to Rihards Zariņš’ eclectic creative oeuvre, in collaboration with the National History Museum of Latvia, the Latvian National Museum of Art would like to emphasize the artist’s uniqueness in the context of Latvia’s cultural landscape. The exhibition in the Great Hall of the Latvian National Museum of Art offers an insight into the complete range of fields that comprised the artist’s creative oeuvre, encompassing the master’s body of work over a period of more than 40 years.

Sand art in Jelgava Rimi Riga marathon 11.10.2020, Riga (Latvia) The marathon offers the great opportunity to get to know Riga, one of the most beautiful cities in the Baltics. There are several distances to choose from – full marathon, half-marathon, 10 km, and 6 km. The scenic course will meet the expectations of one and all, going through the Old Town, past architectural monuments, and over bridges. In 2020, the Rimi Riga Marathon has been awarded the prestigious World Athletics Gold Label for a second consecutive year, being the only race in Northern Europe and one of 36 in the world. This confirms the race’s high quality and excellent organizational level.

The Latvian city of Jelgava is hosting a sand sculpture park until 1 October that offers visitors a range of spectacular one-off artworks. Sand artists from the Baltics have carved sculptures to celebrate the 755th anniversary of the city, which was once known in German as Mitau. On display are the most important events and personalities in the history of the former capital of the Duchy of Courland and Semigallia. Among the massive exhibits are Teutonic Knights, Duke Jakob Kettler and the popular Latvian band Brainstorm.

W H AT‘S H OT | 21 Ģirts Raģelis, AdobeStock, jonas-jacobsson-unsplash, Modetas Endriuška, ashton-mullins-unspash

Exhibition “Wild Souls. Baltic Symbolism Art” at the National Gallery of Art in Vilnius (Lithuania) All three Ministers of Culture signed a Memorandum of Understanding at the Ministry of Culture in Lithuania on July 24th, emphasizing the importance of better knowledge and translation of the literature of the Baltic States and greater dissemination of works awarded by the Baltic Assembly Prize for literature. Moreover, the Ministers open the exhibition “Wild Souls. Baltic Symbolism Art” at the National Gallery of Art in Vilnius. This exhibition dedicated to the centenary of the statehood of the Baltic States. The works of 126 Lithuanian, Latvian and Estonian artists will be exhibited in Vilnius until 11 October and will afterwards move to Riga.

Furniture Interior Design 15.-17.10.2020 (Vilnius)

Furniture industry experts from Lithuania and other European countries present furniture for various home spaces and for each family member. Exhibition theme: Living at Home! We do everything at home: work, grow, cook, unwind... – This topic is represented in Exhibition Hall No. 5. How to organize any space in our house so that we could have a full and comfortable life no matter what happens? Advice and offers provided by experts, architects, interior designers, and ideas presented by furniture manufacturers.

International Vilnius Documentary Film Festival 24.9-4.10.2020 (Lithuania) Vilnius Documentary Film Festival (VDFF) is a film festival and is the main documentary film platform in the Baltics.

The festival has continually supported the diversity of documentary films by composing rich and captivating program. Each year the main and special festival programs show the most recent internationally awarded documentaries while a retrospective is dedicated to an acknowledged filmmaker. Guests, Movies and Programs to be announced.

Royal Recognition for Lithuanian fashion brand Magic Linen Meghan Markle was photographed with Prince Harry for the first time since April in Los Angeles. And fashion designers from all over the world admire her beautiful royal outfit: The Duchess of Sussex was spotted wearing a white dress

by Lithuanian brand MagicLinen from Vilnius designers Vita Murauskienė and Justinas Murauskas. With paparazzi pictures published in the press all over the world, the Lithuanian brand gets a lot of well-deserved recognition. The Meghaneffect will properly increase the sales of the brands products.

22 | MY OFFICE Photo: Jake Farra

KAAREL KOTKAS

FOUNDER AND CEO OF VERIFF

Veriff is an AI-driven global tech company building a visionary verification platform. The technology of Veriff makes sure that a person is who they claim to be. With offices in Tallinn and New York, Veriff has a diverse team of 230+ people from 36 different nationalities. With the help of artificial intelligence, Veriff analyses thousands of technological and behavioural variables in seconds, verifying people from 190+ countries. The ambition of company is to create a single global identity for everyone on Earth. They’ll give all people, no matter where they are from, equal access to digital services. Veriff also won the German Business Award in Estonia as the best Fintech 2019.

Probably my most important tool. As I am traveling a lot, it helps to be in touch with my team, our customers, partners and investors regardless of where I am. Also, when I demo Veriff’s product, I need a great camera to take a selfie and a photo of my ID card as a part of the verification process.

To verify a person’s identity you also need a valid ID document.

As I demo Veriff almost every day, I always have either my passport or my ID card with me so I am ready to go.

Estonian IDs are just one document among the 8,000+ government issued IDs that Veriff’s technology can read to verify a person’s identity.

MY OFFICE | 23

JANER GOROHHOV Co-founder and COO of Veriff

As most Veriff clients are global and our team works on two continents, a majority of our meetings are held virtually and from wherever. A great pair of headphones and my Macbook help me to keep in touch, hold meetings or just to concentrate on work in a quiet mode or with great music.

Today, you can set up your working station anywhere – your home, a cafe or on a park bench. We’ve made our office as cosy as possible so that our team would feel at home, as if you were working in your living room. We have a no-shoes policy in the office so Veriff’s socks come in handy.

LIISI SOOTS Veriff is all about teamwork and has a lot of tech talent from all over the world. Liisi is an engineer and a product owner in our automation team making sure that our technology is top notch.

Veriff is known for its high level of automation and great fraud prevention capabilities.

24 | C O V E R S TO RY

by KRISTAPS KL AUSS E XECUTIV E DIREC TOR OF THE L AT VIA N FORES T INDUS TRY FEDER ATION

t

he forestry sector is an important part of the national economy in Latvia, Lithuania and Estonia. Although every country is undoubtedly unique in terms of its history, culture and mentality of its residents, the forestry sector is characterised by close economic and knowledge ties that are based on mutual integration. There are bright examples of large local capital companies that have long ago had the vision of bringing their development beyond the boundaries of one Baltic state, and the number of countries will only increase.

Ready to demonstrate leadership

The Baltic region rapidly entered the world market arena in the 1990s and today it is constantly investing in new technologies, searching for new development opportunities for the further processing of products.

In recent decades the forestry sector

in the Baltic region has been able to very quickly “catch up” with what was lost during the 50 years of occupation. In the first stage it was even relatively easy, but already for some time the pace of future growth depends on much closer cross-sectoral and cross-border cooperation, the development of productivity enhancing technologies and well considered long-term decisions regarding resource management. Currently, in terms of timber resources harvested in the local forests within the framework of volumes permitted by the regulatory enactments, forestry has reached its primary processing capacity. Therefore, the Baltic states are very open to a mutual and international partnership and confirm their readiness to demonstrate leadership, among others, as a place where new products of an international scale are introduced into manufacturing.

Over the last 30 years, the curves that characterise the industry have risen by almost 45 degrees, with the only “gap” in 2009, but there is a wellknown, global explanation for this.

In general the added value of the forestry sector in the Baltic region has increased almost six times over the last 20 years, and currently the sector forms ~5% of the added value created in the Baltics, directly employing 143 thousand residents of the region.

The Baltic forestry sector is not only important at the local level. For example, according to the export of softwood saw-timber in global competition, the Baltic region is located between Austria and the USA, ranking in 7th place. The Baltic states are in second place after the United States with regard to the export of pellets. The Baltics take first place in the export of prefabricated wooden houses in Europe, and we are in the TOP 5 in the export of OSB and birch plywood. In general the Baltic production industry of wood slabs is larger than in Finland.

6% of wood in Europe

The commercially used forests of the Baltic states accumulate 6% of the total amount of wood in Europe, the region combined employs 6% of EU wood industry workers and 7% of EU forestry and logging workers.

In the Baltic states, labour is increasingly lacking, therefore this “defect can be turned into an effect”. Unlike, for example, the Netherlands and Denmark, which are well known as producers of excellent

Photo: Ritvars Skuja

Forestry sector – the cornerstone of the Baltic region’s economy and a world-class player

C O V E R S TO RY | 25

wood products, but where there are almost no commercial forests, in the Baltics, similarly to in the Nordic countries, wood processing has been historically very closely linked to forestry based on ancient traditions. Undoubtedly, one of the main conditions that has enabled the Baltic states to become a strong region of forestry and woodworking knowledge and technologies, is the climate provided by mother nature that is favourable for focused forest growing, the soil conditions and the geographical location especially suitable for product logistics. As well as the high quality of softwood in the region – an important basis for the development of strong sawmills, which in turn has provided the basis for further development of the processing industry. It is no coincidence that the factories of almost all major Scandinavian wood processing companies can now be found in the Baltics.

Important wood processing centre

Over the last 100 years, the area of the Baltic forests has doubled, while the timber stock has increased 3.7 times to 1.7 billion m3. The main commercial tree species are currently pine (Pinus sylvestris), birch (Betula pendula), spruce (Picea abies), white alder (Alnus incana), aspen (Populus tremula) and black alder (Alnus glutinosa).

Along with the local wood resources, the wood processing sector in the Baltic region, especially in the sawmill segment, is also partly based on import – both round timber and saw-timber. Mutual trade of round timber within the Baltic region is distinctly active, especially between Latvia and Lithuania. All three Baltic states are becoming an increasingly important wood processing centre. For example, every year the Baltic states buy increasingly more saw-timber or

boards from Belarus and Russia, adding value to these products by processing or re-processing them and exporting them further. In total, the Baltic states import boards (incl. within mutual transactions) worth almost 0.5 billion euros.

Apart from mutual trade, Baltic round timber export is mainly composed of pulpwood for the Swedish and Finnish pulp industries. Export volumes fluctuate however, as they are significantly affected by the purchase price.

The fact that the reorientation of the sector from a planned to market economy took place relatively quickly in the early 1990s can be mainly explained by the low cost – round timber in the Baltics was cheap, but average wages did not exceed 100 euros per month. As a result, a wide network of small, simple sawmills flourished, including large industrial companies in areas that have now become flagships of the Baltic forest industry and large cluster centres, marking the specialisation of each country – in Estonia the production of prefabricated wooden houses is more developed; in Latvia – the production of slabs, especially birch plywood, but in Lithuania – the production of furniture. For example, sawmills in Latvia process a significant amount of softwood saw-logs obtained in the Lithuanian forests, but the supply of chipboard produced in Latvia is very important for the Lithuanian industry of panel furniture. Estonians are buying sawn timber from Latvia for the production of wood frame houses, while Latvians are buying other types of saw-timber from Estonians for the production of glued building structures. In order to be closer to the raw material, “Latvijas finieris” has set up production facilities in all Baltic states, but at the same time has integrated the production processes quite closely. The flow of people across the borders is also common;

for example, the restrictions imposed

by COVID-19 on people moving across the borders have created a labour shortage in wood processing companies in southern Estonia.

Wood chemistry science

For a long time now, long-term development in the Baltic states is being focused on the further wood processing industry based on primary processing products.

The pulp industry has shrunk considerably since Soviet times and now only exists to a relatively small extent in Estonia, where Kraft packaging paper is produced, for which demand is growing steadily due to the growing global internet sales.

From time to time new early research projects for the possible production of mechanical wood fibre production and related further processing products are carried out in the Baltic states. There are already plenty of small foundations in the chemical processing of wood in the Baltics, various extracts are produced in small quantities, and there are a number of larger and smaller green pharmaceutical companies.

The level of wood chemistry science is also high; the only thing that has been lacking so far is the scaling capacity of pilot projects and the commercialisation of investment ideas.

Companies in the Baltic states invest relatively much in the latest knowledge and technologies compared to the rest of Europe, often more than 10% of their annual turnover. As a result, already now, the most modern forest industry companies in the Baltics, which produce about 70-80% of the total production, are in many ways very similar to their competitors in Scandinavia. Maybe even a little more modern, as the technical base has been established relatively recently.

In the European sense the Baltic companies are not large, but at a regional level they are important enough players to form complex cluster structures around them.

26 | C O V E R S TO RY

Baltic Forest Sector Estonia

2.23

Latvia

3.36

Forest area (mil. ha)

Lithuania

Land area covered by forests

47%

40%

Finland

Sweden

Slovenia

Latvia

Estonia

Austria

Norway

2015

Spring 2020

2016

40%

Slovakia Liechtenstein

6.80

6.75

10.22

6.42

Latvia Estonia Lithuania

9.52

* State Forest Service

12.29

(mil. m3)

12.79

Wood yield volume

40%

6.98

51%

12.03

54%

12.86*

62%

11.46

69%

11.44*

73%

2017

2018

37%

35%

Spain

Lithuania

Source:Â https://ec.europa.eu/eurostat/statistics-explained/index.php/Forests,_forestry_and_logging Source: https://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=for_remov&lang=en

2.18

%

C O V E R S TO RY | 27

3,0

Forest industry export (billion euros)

Latvia Estonia Lithuania

2.64

2.59

2,5

2.46

2.22

2.09

2.43

2.18

2,0

1.83

1.96

1.92

1.68

1.56 1,5

2016

2017

2018

2019

Forest industry export*, by major product groups (million euros)

Source: SIA “Meža un koksnes produktu pētniecības un attīstības institūts” (Forest and Wood Product Research and Development Institute) according to the data of the Central Statistical Bureau of Latvia, the Central Statistical Bureau of Lithuania, the Central Statistical Bureau of Estonia

Latvia Sawntimber Fuel wood (incl. wood pellets) Roundwood Plywood Particle board Furniture Builders’ joinery and carpentry Paper, paperboard and products

2019 665.6 453.2 230.4 213.1 174.9 170.7 143.0 126.9

2018 734.7 350.9 298.4 262.2 211.5 173.7 135.3 115.1

2017 613.8 287.1 140.4 200.0 192.5 155.8 131.6 117.3

2016 610.9 293.7 140.9 221.5 156.1 148.1 120.2 106.9

2019 321.1 321.1 299.6 237.1 209.3 151.3 111.4

2018 311.3 311.3 318.9 221.5 210.3 199.6 84.8

2017 294.4 294.4 296.3 211.0 194.1 129.0 65.8

2016 274.6 274.6 242.1 177.2 177.6 116.8 44.1

Estonia Prefabricated buildings Builders’ joinery and carpentry Sawntimber Fuel wood (incl. wood pellets) Furniture Roundwood Plywood

Lithuania 2019

2018

2017

2016

Furniture Builders’ joinery and carpentry

704.2 251.2

640.4 230.4

585.9 245.2

553.4 241.9

Paper, paperboard and products Sawntimber Roundwood Fuel wood (incl. wood pellets)

231.8 153.0 130.9 115.8

224.9 162.1 147.7 100.7

202.1 149.0 96.6 79.8

175.1 151.0 76.0 66.9

Spring 2020

28 | C O V E R S TO RY

Forest management is a solution, not a problem due to climate change ANDO EELMA A CH AIRM A N OF ES TONIA N PRIVATE FORES T UNION

in

the short term, we see that the global economy is greatly impacted by the COVID-19 pandemic and this will have an effect on us too. So far, not too heavily but next year will probably be a struggle. In the longer term, the risks are mainly due to climate change and the associated forest damage (for instance, bark beetle outbreak, storms and new diseases). Another problem we see is the urbanization of society and losing the understanding of the rural economy, which also includes forestry. This means that many people do not see that forest and wood is a local, ecologically sustainable and, most importantly, renewable resource.

In Estonia, for instance, we see that one of the most important shortcomings in the forest sector is the fact that we do not have the ability to chemically process wood. In the future, this may become a significant obstacle to producing innovative materials of higher value.

As well as being one of the risks, the climate change might be also an opportunity. The use of wood as a highly environmentally-friendly and versatile material should be cited as an opportunity again and again. It is also really important to apply the results of research and innovation activities to the valorization and use of wood. Forests and forestry have a positive impact on climate change adaption and mitigation, as does the application of bio-circular economy principles in forestry. We know that forest management could be a solution, not a problem, in the context of climate change.

C O V E R S TO RY | 29

Good potential to achieve EU common goals AIGA GR A SMANE E XECUTIV E DIREC TOR OF THE L AT VIA N FORES T OW NER S’ A SSOCIATION

s

Publicity photos

ince the restoration of independence of the Republic of Latvia, the cornerstones of forest management development have been the renewal of ownership, amendments in legislation, active land market and property consolidation, as well as the transition to purposeful forest management.

At present there are about 130 thousand forest owners in Latvia – private and legal persons. The history of purposeful forest management, when the owner carries out activities to create the forest value, is only 10-15 years old. This is due to fragmented forest properties, the large number of forest owners and the dislike of cooperation, acquired during Soviet times. Gradually more and more forest owners are engaging in the purposeful management of their forests, investing time, work and money in creating such forests that meet their goals. Surveys of forest owners demonstrate that the main goals of forest management are timber production, additional irregular income, landscape, nature protection, timber for one’s own needs.

Currently forest management is carried out by individual forest owners, companies that provide forest management services and cooperatives of forest owners.

In 2000, the legislation that regulates forest management was amended – a new Forest Law and a number of binding regulations were adopted. Since then legislation has not been amended significantly, although the knowledge provided by scientific research, as well as nature processes related to climate change and biotic factors require legislation to be adapted so that there are no regulatory barriers to forest management in order to achieve the objectives in commercial forests. The legislation that regulates forest management in Latvia is still relatively very descriptive and detailed, which significantly limits the possibilities of adopting economic decisions. It is difficult to achieve positive changes in the liberalisation of regulatory enactments.

The funding of the European Union within the Rural Development Programme for Forest Management has provided a qualitative incentive for the development of young forest stands, afforestation of unused agricultural land and replacement of unproductive forest stands.

The favourable climatic conditions for tree growing provide excellent opportunities for forestry as an industry. As well as the relatively large forest resources, which cover more than half of the country’s territory, there is good potential to achieve both the individual goals of the owners and the national and EU common goals regarding the availability of renewable resources, bioeconomy development, biodiversity conservation and climate neutrality.

Ongoing digitisation of Estonian forestry HENRIK VÄL JA M A N AGING DIREC TOR OF THE ES TONIA N FORES T A ND WOOD INDUS TRIES A SSOCIATION

the

biggest challenges in the forestry sector in Estonia is most likely climate change, as there is less cold during the winter and more rain which makes it difficult for machinery to work in the forests. In addition, we see new species and outbursts of bark beetle, for example, as well as more storms and drought which can harm the forests.

The Estonian forest industry is modern and highly digitised which allows us to be competitive. At the same time, most of the companies are small on the international scale and therefore lack the innovation and market disruption possibilities that bigger companies have.

Sweetwoods is one of the most important projects currently seeking to add higher value to low-quality wood: sweetwoods.eu There is also ongoing digitisation, and we have been using e-waybills for roundwood transportation for 10 years now. With the emergence of 3D laser scanning based measurements systems, we can have a fully digital supply chain – from the forest to the product.

30 | I N T E RV I E W

Latvijas Finieris focuses on bioeconomics JSC (AS) Latvijas Finieris, one of the largest birch plywood producers in Latvia, has taken a course towards bioeconomics by replacing the fossil phenol used for plywood gluing with biological lignin; furthermore, construction of the industrial level experimental birch bark recycling laboratory intended for the production of betulin is in progress.

by MĀRIS ĶIR SONS

t

his was told in the interview with Baltic Business Quarterly,

by Mr Mārtiņš Lācis, Executive Board Member and Head of Marketing, Sales, Purchasing and Logistics Sector of JSC (AS) Latvijas Finieris. He admits that the Covid-19 pandemic and restrictions imposed in an effort to limit its spread have changed many previously common processes. The planning has also changed, since only short-time operation for the duration of a few weeks may be planned at the moment, while previously this term was many times longer.

How have the measures imposed to restrict the spread of coronavirus pandemic changed the company’s operation?

Of course, the situation, which emerged in 2020 is an unprecedented one, and it affected everything — production, logistics, foreign purchasers and consumers of our products, as well as suppliers of veneer logs and other materials necessary for plywood production.

In fact, everybody was forced to find a way to work under such unclear circumstances, where the highest priority was and is human health.

This is why an internal regulation was developed within the company to improve safety and at the same

time reduce the risk of infection with Covid-19. The most complicated matter concerned the health of the company’s employees to reduce risks of illness. For example, we limited the contact of our employees with the transporters — truck drivers.

Production units of Latvijas Finieris are located in four countries — the production units in Lithuania and Finland produce veneer, while plywood and its products are produced in Latvia and Estonia.

Initially, we were concerned regarding possible stricter measures imposed in Lithuania, which would affect the production of veneer in Likmere, but this turned out not to be a problem.

Reactions of Baltic countries and Finland aimed at the restriction of the spread of the coronavirus pandemic were similar. There were no problems related to the supply of products – logistics, apart from the decision of Poland to close down the borders and a similar case on the border of Turkey. Besides, the imposed travel restrictions forced us to very rapidly introduce various solutions for remote gatherings and meetings with customers, especially with those who had planned to attend the company’s production units. Even the annual gatherings and meetings of work groups organised by the European Panel Federation, which previously took place on-site only and were unthinkable of in remote format, now

take place in the digital environment.

At the moment, the most important factor in the company is balance at all levels, both in the segments of foreign customers and all links of the supply chain, from the forest to the purchaser of products, which means the ability to adjust to the changing situation quickly and flexibly. In cooperation with forest managers, we are looking for solutions to avoid a shortage of raw materials such as veneer logs. Solutions offered by JSC (AS) Latvijas valsts meži and the Estonian state forest manager RMK to provide the stability of supply of veneer logs are worth recognition,

Latvijas Finieris

Sector: development, production and sale of birch plywood products Export: 95% (to more than 60 countries overall) Net turnover: 228.9 million euros (2019) Employees: 2,545 (on average in 2019) Production: • In Latvia: JSC (AS) Latvijas Finieris, factory Furniers; factory Lignums, factory Hapaks and LLC (SIA) Troja (Riga), LLC (SIA) Verems in the Rēzekne Special Economic Zone • In Estonia: OU Kohila Vineer • In Lithuania: UAB Likmere • In Finland: Riga Wood Finland Oy Forestry: • JSC (AS) Ludzas MRS • LLC (SIA) Latvijas Finieris mežs Sales: • Riga Wood GmbH (Germany) • Riga Wood Holland BV (the Netherlands) • Riga Wood Finland Oy (Finland) • Riga Wood Sweden AB (Sweden) • Riga Wood Ltd (Great Britain) • Riga Wood France S.A.R.L. (France) • Riga Wood Iberica S.L.U (Spain) • Riga Wood Italia S.r.l (Italy) • Riga Wood Orman Urunleri San.Tic. Ltd. Sti (Turkey) • Riga Wood Japan (Japan) • Riga Wood North America Inc. (USA) • Riga Wood Baltic AS (Latvia)

I N T E RV I E W | 31

Mārtiņš Lācis, Executive Board Member of the JSC (AS) Latvijas Finieris: “Plywood products of Latvijas Finieris will become “greener” and significantly reduce the carbon footprint, thus causing competitive advantages and reducing climate change.”

Photo: Matīss Markovskis

since at that moment nobody knew the potential production volumes, because the predictions were only possible for the duration of 2–3 weeks, while any further predictions were equal to looking into a crystal ball. My prediction is that it will take a stabilisation period of 6–12 months to understand the long-term impact of the Covid-19 pandemic.

Namely, the impact caused by these consequences on the demand of customers and cooperation partners for the products of Latvijas Finieris and also any other producer. For example, Latvijas Finieris supplies its products to a trailer manufacturer in Germany, which, in turn, sells its products across the globe. This time is not easy for European producers.

What changes were caused by the pandemic in the behaviour of purchasers of birch plywood?

Latvijas Finieris sells plywood products in more than 60 countries, and each of these countries has a specific situation with certain nuances. First of all, the huge uncertainty related both to the foreign customers of Latvijas Finieris and their cooperation partners,

because nobody knew what was going to happen, what kinds of restrictions were to be imposed and for how long; however, we had assurance that the situation would change at some point.

Due to the aforementioned reasons, we initially built a rather pessimistic scene, where sales in April and May shrank comparatively quickly, at the same time focusing on the ability to quickly adjust to the situation — the wishes of our customers. This was the correct decision, since volumes of orders changed rapidly in all countries in April and May compared to January; a few countries showed huge drops, while other countries showed huge increases.

For example, purchasers of plywood products from Spain, France and Italy, where the restriction measures of the pandemic imposed by the countries were very strict, postponed deadlines for the deliveries of orders with the assurance that they will need the products at a later date. Of course, we also faced some cases, when customers cancelled their initial orders. There was also a case, where the cargo of products was on the way to a Spanish customer,

but his company was closed down due to the coronavirus; therefore, products were delivered to a logistics warehouse, where the customer picked up the order as soon as he was able to. April saw an explicit drop in deliveries of plywood products mainly to Southern European countries, but it was compensated by the growing demand in the German, Polish and Baltic markets. The fact that restrictions in a large market such as Great Britain were imposed later than in the rest of Europe, thus enabling us to smooth out the production process, also played its role. Besides, we have to take into account the fact that so far British purchasers have always maintained larger inventories in warehouses than in continental Europe. Whereas, in May and June, following the lifting of the restrictions in Southern European countries, customers from these countries rapidly renewed their orders. In essence, the market diversification implemented by the company a while ago allowed us to successfully overcome this complicated period.

Thus, in general, volumes of plywood production during this complicated period were maintained within the conditional frames.

32 | I N T E RV I E W

WHAT IS LIGNIN? Lignin is a recyclable and ecologically friendly product, abundantly available in the entire world in trees and plants.

Therefore, it has recently become important subject to active research, to develop new and more sophisticated uses for it. This rising technological wave with most promising results belongs today to the World’s Megatrends. RIGA ECOlogical is one of them.

Latvijas Finieris faced its first experience with Covid-19 back in February this year. Last year, our company commenced good cooperation with plywood purchasers in China, but, at the beginning of February, deliveries to the purchasers of this Asian country were put on hold; however, 1.5–2 months later, when all the European countries commenced imposing their restrictions, deliveries to China resumed. This fact caused the feeling that economic activities would also renew in Europe. In contrast to the massive restrictions imposed in China, there were no such restrictions in Japan and Korea.

Moreover, cooperation partners from Korea and Japan even wanted to receive the goods sooner than initially expected, since they were afraid of possible restricting measures aimed at the restriction of spread and combatting of the coronavirus in Latvia, which could make plywood production and deliveries thereof difficult. However, uncertainty is still here. Customers want to receive their orders within a very short time, which means a very short time span between the receipt of the order, production and delivery.

Turkey is another market for the products of Latvijas Finieris, which helped to compensate for the drop in volumes of orders in Southern European countries. This Middle Eastern country has recovered after the economic recession faced in 2019, therefore construction volumes have increased, and so has the demand for plywood products.

What about the situation in the German market, where Latvijas Finieris is among the largest suppliers of industrial products from Latvia?

The German market is the largest plywood market in continental Europe, where we sell 16% to 20% of the plywood products produced by Latvijas Finieris annually. Latvijas Finieris has more than 60 customers in Germany, from traders to industrial consumers of birch plywood, with the annual business volume of the largest customer reaching approximately 5 million euros, and the smallest one – approximately 1,000 euros. Successful cooperation with such a broad circle of customers with different interests is provided by the trade company of Latvijas Finieris (with seven employees) Riga Wood GmbH, located in Dresden.

As I mentioned before, during the pandemic, Latvijas Finieris was even able to increase sales in the German market. Such a result was achieved due to the elaboration forerunners of previous years combined with the ability of Latvijas Finieris to respond to the wishes and needs of each particular customer very quickly and operatively. Share of sales of Latvijas Finieris in the purchase portfolios of these customers has even increased.

Did you work on new potential markets and new customers during that time?

Work towards this direction has not stopped, even during the pandemic.

For example, in the American market, Latvijas Finieris has focused on

the research of new end consumer products (where birch plywood can be used). Trans-continental trade is very sensitive to situations such as that which was caused by this pandemic.

American purchasers maintain larger inventories than purchasers working in Great Britain or, moreover, in continental Europe, because they take all kinds of possible risks into account. At the same time, during this aggravation of Covid-19, interest in innovative birch plywood products grew in America; however, the materialisation thereof takes a longer time, because on-site meetings are not possible due to the cessation of travel. Although we have not attracted new purchasers of plywood products at the moment, a customer, which had not purchased anything from Latvijas Finieris for several years, placed an order this spring.

What is the situation in relation to the previously planned investment projects?

Under the circumstances of huge uncertainty, the further direction of several development projects, which were at the stage of planning, has been slowed down, but not stopped.

At the moment, Latvijas Finieris concentrates on the more efficient use of the existing assets, more efficient use of heat and electric energy – energy efficiency. All technical repairs and maintenance of equipment take place according to the schedule. Coronavirus has not

WHAT IS BETULIN? Betulin is a naturally occurring triterpene. It is commonly isolated from the bark of birch trees. The compound in the bark gives the tree its white color.

In numerous scientific studies, the natural active ingredient betulin has been found to have anti-inflammatory, anti-bacterial and regenerating properties.

I N T E RV I E W | 33

“My prediction is that it will take a stabilisation period of 6–12 months to understand the long-term impact of the Covid-19 pandemic,” Mārtiņš Lācis, Executive Board Member of the JSC (AS) Latvijas Finieris

affected the sector of service and product development. Emphasis is on making plywood products greener — fosil products are being gradually replaced by sustainably generated materials of organic origin. A good example of this is the new lignin-based glue of Latvijas Finieris, used for the production of plywood with the trade mark RIGA ECOlogical. This glue has been developed within the framework of a three-year project in close cooperation with the Finnish group of companies Stora Enso. Whereas, the second direction is wood resources — birch bark, which we want to use to make a product with high added value – betulin. Both of the aforementioned directions form the contribution of Latvijas Finieris to the reduction of climate change.

What is the current stage of the project related to gluing plywood using lignin-based glue?

We already started offering plywood products glued with such glue to our customers last year, and this year the volume is increasing. There are many customers in France, the Netherlands and also in Latvia, which are already receiving the entire range of products of Latvijas Finieris glued

using lignin-based glue. Customers in other countries are also waiting for such offer. In RIGA ECOlogical glue bio-based renewable lignin currently replaces almost a half of traditionally used fossil materials, thus offering to all our customers a significant competitive advantage in the increasingly green business environment. Customers like such replacement of phenol by lignin, but they also want tangible benefits – results. At the moment, Latvijas Finieris, together with scientists, performs and tests plywood products, the glue of which contains phenol and lignin. When this work is finished, we will be able to compare the environmental impact caused by both glues containing phenol and lignin. Whereas, the physical and chemical properties of the product do not change depending on the use of phenol or lignin in its content.

In Scandinavia and Great Britain, during the building of houses, their environmental impact is already being taken into account and is to be later used in tax policy, most frequently for the calculation of property tax. I predict that, as soon as the relevant documentation is ready, demand for plywood products with the RIGA ECOlogical brand will also grow, because lignin reduces the carbon footprint of plywood production. It is planned that initially such a solution – to use only RIGA ECOlogical glue – will be fully adopted by the factory Furniers; however, it requires additional investments.

Regarding further substitution of fossil resources, our intention is to proceed the direction where we

decrease share of phenol in our glue, replacing it with lignin over time.

What is the current stage of the intent of betulin production?

We have considered the rational, economically beneficial use of wood by-products in plywood production for many years, and, as far as birch bark is concerned, its recycling into biological betulin, which could be a raw material for cosmetics and pharmaceuticals, was admitted to be a good approach.

In cooperation with the Forest Sector Competence Centre, the experimental industrial betulin production unit is in the process of creation – a laboratory with the aim to find a way to obtain high purity betulin using birch bark, which is generated as a by-product of plywood production. Opening of this production unit is planned at the end of 2020. This means that Latvijas Finieris has “stepped out” from wood processing and commenced its activity in the area of wood chemistry, the potential consumers of the products of which include the cosmetics manufacturing industry and pharmacy, which set different criteria compared to the sectors we have worked with thus far. At the moment, betulin is globally produced using birch bark in experimental small volumes, but this area has great future potential, especially in the context of the circular economy and Green Deal. The great potential is confirmed by the following example – one company (operating in the pharmacy industry) from Germany purchases decontaminated and sorted birch bark from Latvijas Finieris, in order to produce betulin.

From a long-term perspective, this German company could become a good cooperation partner in the betulin segment. At the same time, it might take many years, certificates and convincing of potential consumers of the quality and properties of the product before we can speak about commercial betulin production using birch bark in industrial volumes.

34 | B A LT I C W O O D I N D U S T RY

No negative impact so far

Michael Pfahler, CEO of Finlaid: “If the virus gets weaker, we should have the same good result as in 2019.”

“We have managed to work all through this critical period, just keeping truck drivers happy in their cabins”, says Michael Pfahler, CEO of the company Finlaid in Estonia regarding this year. It’s impossible to say that the worst of this pandemic is over yet, but business developments so far allow Finlaid to hope for a good year.

by SANTA DUNAISK A

Finlaid OÜ Has the current situation affected the company’s production or export markets? Or do you even see an opportunity for growth?

So far we have not seen any negative impact on the consumption or supply side. In this part of Europe, societies are less affected by the virus and we have managed to work all through this critical period, just keeping truck drivers happy in their cabins. The heart of the economy – cargo transport – remains ticking. If only 20% of truck drivers were out the roads, then we would really face troubling times.

What is the amount of investment (both your own and from others) in the period from 2017-2019 in your company?

Like every other company, we also aim to develop. Besides our everyday costs, we constantly monitor our productivity year on year. Whenever machinery or processes need to be upgraded, this shall be done. In production, investing does not mean buying new machinery every year, in the same way as some people buy a new phone or change their

Year founded: 2003 Specialization: A producer of naturally renewable building materials, wooden facade cladding, flooring and decking.

This is produced (in a global wood quality comparison) from premiumquality Nordic spruce and pine as well as from Siberian larch on request.

Net turnover: During last few years, the company raised its annual turnover from €4 million to over €5 million.

Number of employees: 16-17 Market structure: Export approx. 85% Main export markets: Asia and Western Europe Production place: Otepää area, not far from Sangaste centre

car every 5 years. The machinery we install must serve for at least 15 to 20 years. Our machines are up to the right level to provide good quality material to customers but, yes, they could be a bit faster. The current political situation does not favour making investments in natural resource-saving machinery, so it’s not possible right now to consider switching old machinery for new. An investment would save approx 30 full trucks of round log every year, which

means a lot forest land resources would be used properly, instead of chopping it straight into fire wood.

What are your company’s prospects for 2020 (in relation to production, product sales and markets)?

If the virus gets weaker and does not send anyone to emergency rooms in the autumn (governments are currently introducing different types of closure rules), we should have the same good result as in 2019.

B A LT I C W O O D I N D U S T RY | 35

by SANTA DUNAISK A

Aware of the good fortune of the moment “If you are forced to sit in an apartment in the city, you start to think about owning a house”.

Finnlog OÜ

Year founded: 2003 Specialization: Building logand CLT houses, approximately 80 houses per year Net turnover of last years: 2017: €3.5 million, 2018: €4.9 million, 2019: €5.1 million Profit: approx. €200,000 Number of employees: 37 Market structure: 30% Estonian, 70% export Main export markets: Finland, Russia, Germany

year, the project is in Tuusula and it will start on 3 August.

There will also be one of our houses in which we invested around €0.5 million.

So says Alar Anton, Managing Director of Finnlog OÜ which is also an AHK member.

What is your current situation, how have the consequences of the pandemic affected your company?

In some markets, the influence of the pandemic is quite serious but in some there is almost no change.

When we talk about the German market, it seems that everyone and everything was in a state of shock when it all started. After the first month, business started again as a very good and positive wave. In our field, everything that is happening now is a good opportunity because when you are forced to sit in an apartment in the city, you start to think about owning a house. The Russian market is another story, as the situation regarding controlling the pandemic is on a different level as in Germany. Therefore we can’t say that the pandemic has had a negative influence on us in total, and it seems that this year will be even better for us than last year.

What is the current situation in your company with export markets?

Quite good. The German market is in a good state, while the Estonian market is stable. The Finnish market could be better, but before the pandemic started the sales results there were quite good. By contrast, the Russian market is in a bad state, although it hasn’t broken down.

For most of our sales, we work for about 3 months before closing the deal. A lot of work gets done in advance, which is also the reason why this pandemic hasn’t had a negative effect on us.

Were there any plans or investment projects before the pandemic that need to be changed or cancelled now, and do you see an opportunity for growth?

We are careful about investments, and in this current situation we will not rush into any major investment projects for now. But we have invested in making a show house for a Finnish exhibition project – the government sells the land to local people at an affordable price with the condition that they have to build a house on it in one year.

After that they have to exhibit the finished house for 2 months. This

How has the pandemic affected your work and the number of employees?

As we are the ones that make technical projects, half of our employees were also working from home beforehand. That is not a big issue for us at all, as we don’t have a production line or factory where you have to be present all the time.

We all know that many companies had to let go of some of their workers or reduce their salaries, but we have not had to do that fortunately.

We cannot cut the salary if the work amount has increased. We are thinking more about hiring extra staff and not cutting their salaries.

What are your company’s prospects for 2020 (in relation to production, product sales, markets)?

For 2021 it is difficult to say, as we can’t predict how coronavirus will evolve. But we expect improvements in 2020 when we see that people feel lonely in their apartments due to being forced to stay indoors. Being in a private house makes the lockdown easier to overcome as you get more freedom, so therefore we hope the future will bring good fortune to us.

36 | B A LT I C W O O D I N D U S T RY

10 Million Euros Invested in a Modern Lumber Sorting Plant One of the largest producers of softwood sawn products, AHK member SIA Rettenmeier Baltic Timber, by investing almost 10 million euros, has created one of the most modern lumber sorting plant in the Baltics, under which a water reservoir the size of Ķīpsala Swimming Pool has been created.

Rolands Rimicāns, Board Member of SIA Rettenmeier Baltic Timber: “The new sawmill that meets modern requirements increases the company’s competitiveness in the market.”

by MĀRIS ĶIR SONS “Currently the new lumber sorting line is operating in test mode, as its establishment has been delayed due to COVID-19 restrictions, as a result of which foreign specialists could not visit Latvia for several months to perform testing of the sorting line in actual working mode,” says Rolands Rimicāns, Board Member of SIA Rettenmeier Baltic Timber, adding

SIA Rettenmeier Baltic Timber

Sector: production of sawn coniferous products and glued boardsNet turnover: 64.0 million euros (2019) Largest sale markets: Germany, Italy, the Baltics Location: Inčukalns (Latvia) Number of employees: 295 Founded in: 1994 Source: SIA Rettenmeier Baltic Timber

that the development of a modern, automated sorting complex of the sawing production could be completed within next weeks. He admits that the uncertainty caused by coronavirus in the segment of industrial buyers of the company products, as well as the concerns of the World Health Organisation about the possible next wave of the pandemic, has raised significant caution regarding the implementation of investment projects.

Underground reservoir An interesting fact is that SIA Rettenmeier Baltic Timber has created water storage required for fire safety under the new sawmill sorting station. “In Germany, in many wood processing companies such water reservoirs are created underground, mostly in different areas, but in Latvia we are creating a solution of constructing it right under the production plant,” says R. Rimicāns. He admits that he is not aware of any similar solutions implemented in the Baltics.

Market reaction “In different countries, different buyers of the company’s products have felt the effects of coronavirus differently,” explains R. Rimicāns.

He noted that the company first felt the slowdown in the British market, but cooperation partners from this country resumed their purchases just as quickly. “There was a situation, when the stores of building materials were empty, as people were determined to improve their living conditions at home. There was also a different situation, when foreign partners, not being able to actually understand what would happen next and how,

simply postponed the delivery deadlines of their orders, and part of these orders was stored in the company warehouse,” says R. Rimicāns. “The buyers of some furniture manufacturers “paused” their activities and consequently the furniture manufacturers acted throughout their supply chain, in which SIA Rettenmeier Baltic Timber was also involved,” says R. Rimicāns, indicating the link to customers.

“We had work to do in Italy, Germany and Latvia, and the conditions and requirements were, of course, different, but in general, the economic activity that existed before the coronavirus – in January-February this year, has not been restored yet in some product groups, but in general actual market development is good,” says R. Rimicāns.

Future issues The production of Rettenmeier Baltic Timber is used in both the construction and production of various wood products, therefore attention is paid exactly to these segments. R. Rimicāns admits that not only in Latvia, but also in other European countries the recovery from the recession caused by coronavirus is being implemented with the help of large-scale construction orders. However, he believes that as a result of a long-lasting coronavirus pandemic, construction might also slow down, especially if the construction sector suffered the most during the previous financial crisis. He points out that this is why the company warehouse balances of the finished production are closely monitored, as well as what is happening in the saw-log segment, which in turn is affected by the pulp and paper industry and the demand for such products. “In 2019, we were working with a net turnover of 64 million euros, which is slightly lower than in 2018, as a fall in prices could be observed for certain product groups,” says R. Rimicāns. He admits that the company previously experienced the largest increase in net sales after Rettenmeier Group purchased the wood processing complex owned by SIA Ikea Industry Latvia with the capacity of 330 000 m3 of pine saw-logs per year in 2016.

We are positive about the upcoming future. We are likely to meet the level of 2019 in terms of production and income.

There is also a strong possibility that we will even surpass it, Egidijus Mockus, the CEO of of VAKARŲ MEDIENOS GRUPĖ

Export demand is booming VAKARŲ MEDIENOS GRUPĖ (VMG) is positive about the upcoming future and could even surpass the numbers achieved in 2019 AHK Member VAKARŲ MEDIENOS GRUPĖ (VMG) is one of the largest wood processing and furniture production groups in the Baltic states. Its new production facility in the Akmenė Free Economic Zone has started testing production capacity. The company has invested €140 million into this new facility.

It was supposed to start production back in late April or early May but the coronavirus lockdown affected the plans, as specialists from Germany’s Siempelkamp could not come to Lithuania to complete the work. The group is now producing more than before the lockdown, and sales exceed plans by 10% in June. Egidijus Mockus, the CEO of VAKARŲ MEDIENOS GRUPĖ, told the Baltic Business Quarterly that the company is very confident about the future prospects.

What is your current situation, how have the consequences of the pandemic affected your company?

We are currently maintaining

a more favourable pace than predicted and are even likely to surpass the numbers we achieved in 2019. If sales continue to grow.

Has the current situation affected production? What is the current situation in your company with export markets?

The overall damage was not very significant compared to that of other markets and companies. The export market currently has a strong demand for our production, even greater than we expected.

Were there any plans or investment projects before the pandemic that need to be changed or cancelled now, and do you see an opportunity for growth? How has this affected the number of employees?

It is possible for the pandemic to affect the time-frame of project completion. However, we are glad that it did not wholly compromise

Vakarų Medienos Grupė is a leader in the wood industry and works in wood processing, business management, technical maintenance, logistics, and the development of industrial real estate in Lithuania, Belarus and other European Union countries. VMG Group consists of 16 companies operating in Lithuania and foreign countries.

Year founded: 2002 Main production: Solid wood furniture, furniture from particle board, layer glued furniture along with sawn timber and pellet products Net turnover: 2017: €251 million, 2018: €281 million, 2019: €339 million Profit: 2018: €33 million, 2019: €32 million Number of employees: 4,000+ Amount of investment: 2017: €33 million, 2018: €74 million, 2019: €106 million Market structure: Exports up to 95% to 11 countries across the EU, USA, Middle East, India, China and Australia Main export markets: Germany, Scandinavia and the UK Production factories: Lithuania and Belarus

any investment plans. We did not lay off any workers during the pandemic and do not plan to do so now.

What are your company’s prospects for 2020 (in relation to production, product sales, markets)?

We are positive about the upcoming future. We are likely to meet the level of 2019 in terms of production and income.

There is also a strong possibility that we will even surpass it.

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Bolderāja Serviss Aims for the German Market The strategic goal of SIA Bolderāja serviss, member of AHK and manufacturer of case furniture in 2020, is to expand the geography of its sales market. Thanks to the investments made, the company has also entered a new phase of development.

by MĀRIS ĶIR SONS Investments we made not only allow one to quickly and efficiently produce the products required by customers, but also to quickly change the assortment of manufactured products, Valdis Krauklis, Member of SIA Bolderāja serviss Board

Photo: Ritvars Skuja

“We are trying to implement a market diversification programme, which allows us to avoid problems that can be caused by one market, one buyer or sales channel,” explains Valdis Krauklis, Member of SIA Bolderāja serviss Board. Currently the largest market of the company is Sweden, but the production is also sold in Finland, Norway, Denmark, the Netherlands, the United Kingdom and Iceland.

“It all started with an agreement that we signed with a Norwegian company, the direction of activity of which was the supply of furniture to public schools,” says V. Krauklis. In order to conquer new markets, the company has already implemented ISO 9001/2015 and has initiated work in order to meet the requirements of the ISO 14001 standard, as well as to acquire the opportunity to label its products with the so-called green certificate (FSC system).

1.5 million euros for competitiveness

The company has invested approximately 1.5 million euros in digital solutions and technologies, thus completing the second stage of the BSO (batch size one) investment project. “A few years ago, the company bought and started using the so-called smart warehouse for board, in which two new saws were integrated. The warehouse itself automatically sorted the board materials, which were automatically directed to a specific saw the next day, which in turn “knows” what size material is required. Last year this system was supplemented with automated slab edge gluing and drilling equipment,” says V. Krauklis listing the largest investments. “These investments not only allow one to quickly and efficiently produce the products required by customers, but also to quickly change the assortment of manufactured products,” explains V. Krauklis. “In 2021-2022, the third and final stage of this project should be implemented, within which another drilling line and robots will be installed, which will group furniture parts between glueing and drilling the edges,” emphasises V. Krauklis. He admits that the timing of the planned third investment stage in automation and digitisation will depend on the financial performance of the company, as it is difficult to predict anything one or two months in advance due to the COVID-19 pandemic.

Possibilities of digitisation

The company produces furniture for schools, kindergartens, offices, hotels,

SIA Bolderāja serviss

Sector: production, sale of case furniture (for schools, offices, hotels, medical institutions, specific projects) Market structure: 80% export Main export markets: Norway, Sweden, Finland, Danmark, the Netherlands, the United Kingdom, Iceland, Lithuania, Estonia Net turnover 2019:7.82 Million euro Production place: Rīga (Latvia)

kitchens, as well as for individually designed projects. Currently there are four furniture designers, who produce precise furniture drawings. “By placing the work of these designers in a digital environment (IMOS), which is integrated with the company’s ERP system, any product can also be made repeatedly after several years by using its article, as all the data is stored. At the same time, this system communicates with the production systems, which in turn allows one to fulfil orders very quickly,” says V. Krauklis about the possibilities of digital tools. “We have a minimum production batch of 30 units and more, but the implementation of the above measures allows us to produce the product in only one copy, of course, at a reasonable price. It is important that we have gone through the stage – more and cheaper – and entered a new stage – faster and of higher quality,” points out V. Krauklis.

Restores the assortment The company has its own e-shop in all Baltic countries. It is interesting that although the furniture is delivered in Latvia, it actually still travels abroad. For example, Bolderāja serviss furnished 330 modular houses, which were eventually exported abroad. When asked about the deadlines, V. Krauklis answers: “Bolderāja serviss produced more than 1500 pieces of furniture for the agreement amount of 0.16 million euros within 22 days.”

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Photo: Dainis Ģelzis

It is one of our advantages, that we deliver the customer a ready house.

The customer receives the key, unlocks the door and everything is ready for living, Denijs Jaunzemis, Sales Manager of VIA-S houses

SIA VIA-S modular houses Year founded: 2004 Number of employees: 80 Net turnover: 2019: 4 Million euro Market structure: Export 90% Main export countries: Scandinavia and Germany Production place: Liepājā (Latvia)

Greener and smarter

From the idea to the key The manufacturer of modular houses, member of AHK SIA VIA-S modular houses, during its sixteen years of operation, has not only gained experience in the Latvian and Scandinavian markets, but is also strengthening its positions in Western Europe.

by MONTA GLUMANE The main product of the company is summer and residential houses, which it has been manufacturing, selling and installing since 2004. The orders are assessed, as the company has concluded that it is possible to achieve excellence in business, when focusing on some specific niche. VIA-S houses has found their niche – construction of summer houses. Initially VIA-S houses developed its activity in the local market, but with the economic crisis of 2008 in Latvia, the company was forced to either change something or terminate its operation.

A decision was made to develop export to Denmark, a few years later – also to Sweden, as well as Norway. “What showcases us as a company is that we are still cooperating with our first customers in Denmark today. It is clear that in some years there are more projects and some years there are less, but we are always working in the long term, as there are no more single-day projects. It is no longer relevant for anyone,” says Jānis Akerfelds, Member of SIA VIA-S modular houses Board. For the company of Liepāja, the local Latvian market currently accounts for approximately 10%.

Ready for living

In the Latvian market the company works with customers on its own, while abroad architect offices are involved, who communicate with the customers and plan the designs. In total, a modular house is created in about four months – from the idea to the key, including delivery and installation of the house both in Latvia and abroad. “It is one of our advantages, that we deliver the customer a ready house. The customer receives the key, unlocks the door and everything is ready for living. I think this is what the customers enjoy. One day the yard is empty, but the next day a house already appears there and people are already living inside it,” says Denijs Jaunzemis, Sales Manager of VIA-S houses. According to him the main difference between the manufacturers of wooden frame houses and modular houses is that VIA-S houses are delivered fully finished, as they are already pre-fabricated in the factory, while in the case of wooden frame houses the interior works and facade works must be completed after their installation, which can take another month or two.

“Not only do the specific legal requirements differ in each market, but customer expectations are also changing.

For example, in the Nordic countries the Scandinavian classic design is in demand – red boards are used for the facade decoration, but white – for interior works. In Germany, on the other hand, a more modern style is demanded, such as painted plasterboard for interiors and modern materials for facades. Each country has its own nuances and they certainly differ – it is important for us as the manufacturer to take this into account. Customers are also willing to make their homes greener and smarter,” says D. Jaunzemis. Thinking about export markets, J. Akerfelds says that two years ago the company already decided that the export market of VIA-S houses would be Scandinavia, but also purposefully worked in the direction of Germany. Last year the company brought the first demo house there, and this year 5-6 readymade houses have already been delivered to this country. “Entering the German market is a significantly serious step, as more than 80 million people live there.

We implemented very purposeful actions in the direction of Germany. We are not sitting still and waiting for someone to come to us. No, we have to go and prove what we are capable of ourselves, in order for someone to be willing to work with us,” says J. Akerfelds confidently. The company has also considered selling its products in the Netherlands and Finland. The delivery costs of modular houses are quite significant, therefore the company focuses on the countries located by the Baltic Sea to make their delivery more profitable.

When looking at the map, the company is thinking about development in Western Europe, as it is already feeling comfortable enough in the Nordic countries. If we have to choose between the North and the West for the next partner, VIA-S houses definitely favours the West.

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A digital tool for foresters and others The geospatial information technology platform LVM GEO, created by the Latvian state forest management company JSC Latvia’s State Forests(LVM), which was originally created to support the company’s own business processes in forestry, is now also used by companies working in other areas.

by MĀRIS ĶIR SONS “We are working to attract potential foreign customers,” says Māris Kuzmins, Director of LVM Business Systems Solutions. He points out that the platform developed by the company is currently used not only by the forestry companies operating in Latvia, but also, for example, by the power transmission company JSC Augstsprieguma tīkls.

“The geospatial information technology platform has just been adapted in such a way, that it can be used for the management requirements of Altum Land Fund of Latvia,” informs M. Kuzmins.

Active foresters

“Initially our solution was used by forestry companies (including Scandinavian forestry subsidiaries in Latvia) that managed large forest areas (at least 5000 ha), and on the average one such manager monitored about 30,000 ha; but now we also offer this system to managers of smaller forest areas,” Katrīna Amerika, Project Manager of LVM Business Systems Solutions explains. “Our largest client in Latvia manages more than 120 000 ha of land. Currently negotiations are being organised with several potential foresters abroad,” K. Amerika says. However she quickly adds that LVM offers to adapt and install the existing platform for customers, who require the support of geospatial information technologies for the implementation of their economic activities – not only for foresters, but also for those working in other industry.

M. Kuzmins points out that the system is built of several modules and therefore it can be adapted to the needs of different companies, as well as integrated with other systems and can be localised, thus providing communication with the system in the preferable language.

Māris Kuzmins, Director of JSC Latvia’s State Forests (LVM) structural unit LVM Business Systems Solutions: “The platform is intended for viewing, processing and analysing various types of geospatial data for companies operating in Latvia, but in the future we also see customers abroad using these solutions.”

The priority is neighbours

The good results acquired working with forest managers in Latvia currently allow foreign foresters to be viewed as great prospects. “We are interested in those working in this field in the neighbouring countries, but this does not mean that they cannot also be located in more distant countries, like Germany, Austria and elsewhere,” M. Kuzmins emphasises. “Seeing what the systems are like in other countries, the one developed

by LVM has several advantages – it is regularly updated and does not contain any old technologies,” M. Kuzmins reveals.

He emphasises that companies in Europe are currently being sought, that would be ready to work with the product created

by LVM Business System Solutions. When asked about the possible attraction period of foreign customers, K. Amerika answers: “One to two years.” “The interest is large enough, and the platform has an adequate price range in the market of geospatial solutions, as it is possible to purchase both the platform and the right to use this platform as a service,” says M. Kuzmins.

100 000 downloads

It should be taken into account that many Latvians have downloaded the mobile application created by LVM Business System Solutions. “Initially, LVM GEO Mobile was created for professional needs – to receive work orders and to report the completed works – but currently it has already been downloaded

almost 100 000 times – both to study maps in specific areas and also simply for recreation in nature,” M. Kuzmins explains. Thus, part of the large LVM GEO platform is available to anyone.

The forester creates IT

The fact that a forest management company has also started work in the field of information technology has once been dictated by the circumstances.

M. Kuzmins remembers that initially – more than 10 years ago – the geospatial information technology platform was created in the company to improve the efficiency of its operations within all stages of forestry up to the transportation of harvested timber itself. In 2012, the company decided to completely abandon the outsourced services of geospatial IT systems development and established an internal department of business systems solutions staffed by professionals in the relevant field.

“The system is able to perform several functions simultaneously. It ensures accuracy, calculates, controls and also generates notifications, as it contains the tasks of the respective works, as well as reports on the implemented works and thus helps to make the right decisions,” says M. Kuzmins. However, he adds that the system created so far does not use artificial intelligence technologies, but it could happen in the future, especially in the positions that include so-called large data and their processing.

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Photo: Ritvars Skuja

Roundwood moves along with electronic data Digitalisation solutions for the movement of roundwood, together with the data on its volume and quality, provided by the industry Data Centre, already create competitive advantages for more than 100 participants of this system. In 2021 this system will be supplemented with new opportunities.

SIA VMF LATVIA Council Member Mārtiņš Gaigals: “The biggest benefit for the industry companies is increased work efficiency and most importantly clear management of the timber flow throughout the supply chain.”

by MĀRIS ĶIR SONS The data centre (SIA Koksnes plūsmas datu centrs), the same as SIA VMF LATVIA, is a company owned jointly by the sellers and buyers of timber, where all basic data, codes and classifiers are located and maintained, and communication takes place according to a single international papiNet standard. It is a support tool for work planning, as it allows one to match the production with the supplies of round timber. Mārtiņš Gaigals, the Member of SIA VMF LATVIA Council, points out that it is not economically feasible to measure roundwood in several places; it is enough to do it in one place – at the consumer; and it is implemented by independent experts not influenced by external interests – by VMF LATVIA, using electronic control and surveying systems, while quality assessment still basically depends on the human factor. “In Latvia, this system is implemented in a significant part of the timber flow chain – from the log landing in the forest to the consumer’s warehouse, including timber carriers; but in the future this system should also include forest resources and thus it is possible to plan the work of harvesters and forwarders, including based on the customer’s demand, nature and market conditions, etc.,” says M. Gaigals, revealing the future plans.

Provision and implementation of such a project is only possible for industry players – companies involved in the timber supply chain, by agreeing on the relevant data standard and also investing in their own IT systems, adding

a corresponding module to them – a translator that converts business documents created according to the papiNet data standard into the individual IT data systems of each company.

In real-time mode

When asked about the need to create such a structure, M. Gaigals answers as follows: “Technology development allows the generation of digital business transaction documents and their processing, which significantly reduces the human factor, at the same time allowing for more efficient and faster operation.” It is estimated that the developed system will aim to move 80 to 100 million items of goods each year, for example saw-logs.

“A single data standard means that all participants understand the same thing; if they are given the task to deliver it from landing A to consumer X, then everyone understands what is happening,” says M. Gaigals. He points out that the system also allows one to assign a task to deliver specific cargo to a specific location, while obtaining an online report on what actions have been completed, as well as provides confirmation that the cargo has been received and also VMF LATVIA test reports, on how much has been transported and what the quality is. “This forms a total of four digital documents for one shipment,” explains M. Gaigals, adding that all stages thus have real-time data inventory and clarity is provided on how to organise logistics, so as not to run out of resources.

The sequel will follow in 2021

The next step is already planned in 2021, supplementing this technological platform with opportunities to issue electronic invoices. “Currently, the system already provides an electronic bill of lading, which is accepted by both the State Revenue Service and the State Police,” M. Gaigals points out. “In the long run this system is likely to cover forest owners and it will help them plan their activities and generate relatively higher revenues,” says M. Gaigals. He admits that the circle of users of the established system is expanding with timber manufacturers, logistics and timber transport service providers, and owners of timber warehouses (wholesalers) working in Latvia. When asked whether this information technology solution created in Latvia could be used abroad, M. Gaigals answers as follows: “If there are such requests from foreign companies, then, of course.” However, he quickly adds that such a solution is only possible if the buyers and sellers of timber have mutually agreed on the classification of timber and its measurement standards, and the quantity and quality of timber is assessed by independent evaluators.

“The most important task in this area is to change the way people think; then we need to change the processes, and only then are resources required to adapt information technologies, so that they can cooperate.” This is how M. Gaigals answers the question about what is required for such a system to be implemented.

42 | W O O D D E S I G N

Other uses of wood

Wooden accessories with personal touch

Wood is not only for house building, furniture or everyday household items. Baltic designers find uses for wood everywhere. We offer an insight into some of their ideas.

The idea for KOOR wood started in 2013 as a side project, when Aleksander Tomas was working an office job at Tallinn University of Technology (TTÜ). Woodwork is his lifelong passion. Working from his home workshop, he prototyped several personal accessory products with a little help and feedback from his friends. The prototypes were presented to local retail stores and as the feedback was overwhelmingly positive, the decision was made to rent the necessary equipment to professionally produce the first 3 test batches. The start was slow, as expanding a woodworking business needed costly investments in CNC technology and production space.

Currently, KOOR wood has 8 employees and several freelancers working every day with the sole goal of manufacturing highquality and environmentally responsible wooden accessories. “At KOOR wood, we do as much work in-house as possible to keep control on quality to the highest standard and we enjoy the challenge of figuring out custom solutions for our new clients.

We plan to further grow our business, as long as we are able to retain the small business feel and ethics that allows us to be flexible and personal in our approach”, emphasizes Rezete Karu, the marketing and sales manager of KOOR wood.

by SANTA DUNAISK A

Latvian design studio Brum Brum has created a bike that helps children develop their sense of balance and kinetics from an early age, while keeping a focus on their safety and integrating features that ensure it. The idea was to create the balance bike for kids that is user-friendly in weight, suspension, tubeless tires, safe discs, high quality and lots of fun. The father of the idea is Krisjanis Jermaks, who created the first Brum Brum bike for his own children. The company believes that this is the future of balance bikes because at such a sensitive age kids have to develop in the most natural way. Thanks to the U-shaped plywood frame, which provides a natural suspension, the child’s spine is well protected at any given moment. As the lightweight wooden bike is held together by only one screw, assembling and maintenance is very easy.

While the bike grows with your kid, it is also possible for siblings and friends to take a quick ride at any moment as one can simply adjust the bike to 3 different heights in seconds without any tools. Everything in this bike is created locally.

Photo: Publicity Photos

Future balance bike from plywood

W O O D D E S I G N | 43

Playgrounds growing together with children “Waiting for our daughter’s birth 15 years ago, my wife Kadri and I started to plan and design our own backyard playground. But the selection of homemade playgrounds was almost nonexistent. As a parent, you do everything for your children, so I obtained the necessary tools and materials and made a start!”, says Rasmus Varunov, CEO of Tiptiptap. Together with his wife and friend, Rasmus got into such a groove that instead of one planned attraction they made two. They took the spare one to a fair where the homespun product immediately found a new owner. Interest from other people started to grow, so Rasmus decided to start the production and Tiptiptap was born. Tiptiptap has grown in parallel with Marii and her younger brother Rasmus jr and both children are the sources of inspiration and experimenters of the family business products. “As safety is our priority, I started the business by familiarising myself with the subject of playground safety and standards. All the Tiptiptap products are safe for children and meet the safety requirements. This is the top priority for me as the head of the family and the chief executive officer of the company”, says Varunov. Tiptiptap mainly exports its products to Europe but also to Asia, Africa and some Arab countries. But in Estonia, Tiptiptap playgrounds as well as Tiptiptap itself is the signpost and area leader.

Riding the wave of ecological tiny houses “For the production of our houses, we only use ecological materials – both for the creation of our own constructions as well as for their processing and finishing works”, says the member of the Board of SMART ECO TINY, Kaspars Juliks. The company was founded in the summer of 2019 and focuses on producing mobile houses (tiny houses) and modular houses. Scandinavian countries, Germany and France are the main export markets so far. “We have been working in the construction industry for many years as carpenters. Following the market development and trends, we noticed that mobile homes are rapidly becoming popular in Europe, gradually reaching the Nordic market. We therefore decided to focus on this segment and start the production of mobile homes in Latvia as well, mastering the local market but mainly focusing on exports,” says Kaspars Juliks. For the production of the houses, they only use ecological materials – both for the creation of our own constructions as well as for their processing and finishing works. They are built of certified timber corresponding to building construction class C24.

44 | S K I L L E D - U P

Skills for the Baltic wood industry – European quality in vocational education and training

by K AROLINE SCHLEGEL

Skilled-Up Latvia

Baltic Business Quarterly talked to Artūrs Bukonts, CEO LKUEA, Latvian Association of Independent Timber Harvesting Companies, Latvian Association of Woodprocessing Entrepreneurs and Exporters, and the Association “Latvian Wood”.

What is your role in the project?

The main role is to be the mediator between the industry and the project, to bring students and companies into this project.

Why do you participate?

There was no such training available before and of course I saw that this is something that would be necessary both for the industry and the education system. In Latvia, we had some attempts at this learning in projects and so on but basically, I don’t see this as the kind of typical practical training that we had before. When they begin the training, the trainees do not have companies in their background.

They look for companies only in the third or fourth year to go and do some practical things there and the idea for our project was that the trainees are already working in the company and are looking for further education. That has the advantage of the trainees already knowing

In October 2019, the training of the EU project was launched in Estonia, Latvia and Lithuania. Two thirds of the training will take place in companies in each country, as well as during mobility visits to companies in other Baltic States and one third takes place in the schools.

Participants in the first training sessions included 50 representatives from different manufacturing companies. They will be piloting the work-based learning program (WBL) at level EQF 5 in the woodworking industry for the next two years so that it can meet the educational needs of the industry and become available to a wider audience. the workplace and the challenges, and are ready to look for the most effective solution. In addition, they already have some authority with regard to the knowledge.

What are the aims of the project?

Our aims are to provide some further education to people who are already working in the wood industry in company production in order to raise them up to production managers or chief managers. In smaller companies, you normally have one manager for the whole production process and in larger enterprises you have different managers for different processes and so we came up with the idea of increasing the educational standard to make it suitable and worthy for both.

How is the project going?

It was quite a challenge in the Baltic countries to bring all three different countries in a position to be seen as one. The first challenge was to bring the three different systems together and create something that can be equal in all countries. The next challenge was to introduce it to companies. I was positively surprised that the program we

created before was something the companies welcomed very well.

I have an example: We finished with the first of ten modules this year in March. The first module was Industrial Technology and was a very large module. The best thing that showed at the end of the first module was having trainees who already implemented this new knowledge in their companies, including solutions in inner logistics, energy efficiency and process management.

Would you already say that the project is a success?

Of course it’s a success because of the experience we gained through the project. And we also made new contacts and are looking forward to doing more of this in the future.

We already know that next time, in October, when we start the training with the second group, we will do a few things a bit differently, especially the organization. But we will strive to maintain the quality, which is a bit difficult when working from home and we hope there won’t be a shortage of students because of this special situation.

Publicity Photos

Which companies are taking part in the project?

On the Latvian side, we have 18 trainees from 12 different companies.

And what’s interesting is that we have quite a wide range of companies; some make furniture, others make windows. The trainees have very different backgrounds but they are all learning the same processes and they really enjoy learning from each other.

Additionally, we have 36 lecturers who aren’t officially linked to the project, but are included in it so there is plenty of influence from many different sides. During the whole project, we stay in close contact with the companies and inform them on how everything is going.

Could you please name some of the companies?

SIA “IKTK”, SIA “Konto”, SIA “KRAUZERS”, SIA “MARKO KEA”, SIA “Elīza K”, SIA “Reliņš”, SIA “Troja”, AS Latvijas Finieris, SIA “Dāvana Luks”, among others.

What are the plans for the future?

The project ends next year in October and I am really looking forward to taking the best from this project in order to improve progress in the first module or mix up some of the modules and continue.

Skilled-Up Estonia

Astrid Org, project manager at the Centre of Competence for Wood Processing and Furniture Manufacturing TSENTER of Võru County Vocational Training Centre.

A good project affects the organization like a refreshing breeze.

It brings with it new ideas, new acquaintances and also financial support for the realization of good

ideas. Regarding the project that started in the late autumn of 2018, we can say that we have now crossed the “equator”. Our first training group – 20 people from 11 different companies – will continue to study in the autumn, while preparations are currently underway to open a new group in September.

A survey of employers in the region’s timber sector showed that training for primary managers is most needed. Indeed, many of our learners are self-learners at their workplace and have never attended any training related to their job.

The motivation of the students to participate in the training is high and the drop-out level is minimal.

We are now creating and testing the “First-level manager at the timber sector” curriculum, based on the experience of the Lehrinstitut Rosenheim in Germany and the cooperation of partners. The curriculum can be adapted according to local needs and opportunities, of course.

Initial feedback from students and employers has been positive – so we will continue in the same spirit.

Skilled-Up Lithuania

Dr. Giedrius Gecevičius, Dean at the Faculty of Technology, Kaunas University of Applied Sciences, Lithuania.

The wood industry is one of the most important sectors in Lithuania with an annually growing number of companies and employees. However, a lack of middle or higher-level digitization, sustainability and social responsibility competencies is the main reason for not fully exploiting the wood industry potential in the Baltic countries. The “Skilled-Up” project could be a very positive and successful example of such skills development with more than 50 students and around 30 companies in Lithuania. During the project’s

courses, students already acquired soft and hard skills, as well as theory and practice in fields such as Industrial Design, Planning Control & Quality Systems, Communication Methods, Occupational Safety and Health, Environmental Protection.

As a result of the COVID-19 virus and lockdown, we also started the distance learning process and it was a big challenge for the students.

In any case, we can be proud of successfully managing this task to enable students to acquire the necessary skills. I strongly believe that this project is a good beginning for a new European quality training concept for the wood industry in the Baltic countries and all of Europe and will benefit from a high valueadded economic development.

Disclaimer The European Commission’s support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

46 | C R I S I S A S C H A N C E The most popular – grocery robot Cleveron 501

by SANTA DUNAISK A

Business vs. Covid-19 Many companies had to struggle with declining order numbers and had to stop or at least cut back production due to the coronavirus outbreak. For some Baltic enterprises crisis is giving a powerful boost.

Baltic Business Quarterly shares these stories.

What is Cleveron and what does it do?

Cleveron offers parcel lockers and robots for companies in all sizes so they can make their operations more effective and save on costs. But the main mission for Cleveron is to save time for the consumers. Instead of waiting for a courier at home or going to a post office, people can pick up their purchases where and when it is most convenient for them. Cleveron is also developing an autonomous delivery car to make the last mile even more efficient.

How did the corona crisis impact you and would you say it is an opportunity for you?

The COVID-19 crisis hit us hard at the beginning. Our main clients are retailers and most of them had to close their stores, suffering considerable losses.

This, in turn, affected our plans.

After the first shock, we started to see things change and the interest in our products increased rapidly. E-commerce grew like never before and the supply chains collapsed. Courier companies

Year founded: 2007 Net turnover of 2019: €66m Number of employees: 180 Location: Viljandi, Estonia Main export markets: North and South America, and Europe

couldn’t handle a growth of this magnitude. Our parcel lockers and robots work as self-service pickup points, which are just the right kind of solution in these circumstances. They are a safe alternative for both customers and employees since people do not have to be in contact in order to hand over a parcel. The parcel robots are also touch-free – the parcel code is scanned from the mobile phone so there is no need to touch the machine.

Given the unfortunate circumstances we are currently facing, we have received great interest in our grocery robot Cleveron 501 – an automated grocery locker with a freezer and a regular temperature zone, which makes it possible to deliver grocery orders without any human contact and 24/7.

expensive IT integrations, and since it can be placed outdoors it is available 24/7. Normally, you can’t just buy only one locker from manufacturers, as most of them are more focused on large companies with major potential and order volumes. With the Cleveron 351, any company that has anything to hand over can buy even just one locker, if they wish. Today, it is great to see how different companies have adapted this locker and expanded their businesses.

Our lockers are used by car dealerships as car key handover points, as well as an additional handover point in a smart storage solution complex for handing over spare parts, clothes, cosmetics, and so on.

Were you inspired to develop something new?

Yes, we were. Normally we take our time in developing new products, but halfway to the peak of the crisis we created a product in only a couple of weeks – our smallest parcel locker Cleveron 351. We saw how small companies and consumers in Estonia were struggling. Even though the courier companies were doing their best to deliver orders, it was still not enough. And since Estonians are a “parcel locker nation”, the parcel lockers were also constantly full. Companies created online stores overnight but couldn’t get the orders to the customers. And the customers couldn’t (and were not allowed to) come to pick things up in person. To solve this, we created a parcel locker specially for SMEs and companies with small order volumes. Cleveron 351 already comes “ready to use”. It is compact, arrives fully assembled, doesn’t need any kind of special installation or

What are the future plans?

We definitely see that the shift to e-commerce will not go away and will continue to offer a convenient alternative to shoppers who like or need to shop online. And this will also increase the need for different delivery options, be they in-store pickups, from a parcel locker or home delivery. Since the last mile is the most expensive part of the process and growth needs to be handled efficiently, companies have to start automating the processes. There will also be a push from the consumers, as time is something that we value and therefore opt for solutions that offer us speed and convenience. We already offer automated parcel handover solutions to some of the world’s biggest retailers and today are improving our product portfolio to offer solutions to all kinds of companies. One of our main focuses is definitely our grocery robot Cleveron 501, in which we see great potential.

Publicity Photos

“Normally we take our time in developing new products, but halfway to the peak of the crisis we created a product in only a couple of weeks – our smallest parcel locker Cleveron 351”, says Mihkel Ilp, the COO of Cleveron AS.

Cleveron AS

C R I S I S A S C H A N C E | 47

by ANDA A SERE

Covid-19 Prompts the Opening of the Online Shop Over 16 years of operation, Uuskasutus has grown to 14 physical shops, and the online shop of the organisation was opened during the time of Covid-19 “Since physical shops were closed, the crisis served as a good opportunity to think about opening the online shop. We could not do this if the shops were open,” says Diana Paakspuu, the CEO of Uuskasutus

Uuskasutus is a social company and a nonprofit NGO that must ensure its own survival. The organisation was founded in 2004 by several organisations and two natural persons. “Our mission is to take care to ensure that good quality items in good condition – clothing, footwear, furniture, household items etc. do not end up in landfill,” says Diana Paakspuu, the CEO of Uuskasutus. The business model is built as follows – the organisation accepts donations and sells these items in the stores of the organisation. People often wonder why Uuskasutus sells donated items, but D. Paakspuu explains that the organisation uses the raised income to cover operational costs – rental of space, salaries of the personnel, investment in the development and opening of new shops, as the objective of Uuskasutus is to open more new shops, thus expanding the mission of the organisation. “We wish to reach as many people of Estonia as possible. We have a good selection of shops and have not closed any of them to date. Our brand is rather strong; based on the growing number of customers and donations, we can conclude that people know about us,” she says.

Complex System

As for everyone, March was a surprising month for Uuskasutus, with turnover dropping to zero within a couple of weeks, while fixed costs remained unchanged.

“Although, legally, we could continue our operation, we are a socially responsible company and we wanted to help in containing the virus; therefore, at the end of March we temporarily closed all of our shops. The shops were closed for more than a month. This seemed to be the best time to open an online shop. We were already thinking about this, but we always had other priorities,” says D. Paakspuu.

The largest obstacle is the fact that our shops sell the widest range of items and all of them are available in a single copy. This means that each item must be added to our online shop individually and removed from it when sold. This requires a lot of manual work; furthermore, our items are not expensive. The items are located in one of the 14 shops and the team of each shop must add them to the system and, if a buyer wishes to buy one item from the shop in Tallinn and the other from the shop in Tartu, they have to pay for the delivery of each item separately.

Therefore, the shop is a very complex structure in general. The management team divided their duties – technical issues, payments, logistics, privacy policy, appearance of the product, marketing, pricing policy, visual presentation, etc.

After a month of intensive work, the shop was ready to launch. “Since physical shops were closed, the crisis served as a good opportunity to think about opening the online shop. We could not do this if the shops were open, since our colleagues would be busy with their basic work duties,” explains D. Paakspuu.

Environmental factors have caused the trend of responsible use of resources, which, among others, includes the donation of good items and buying of used items.

During Covid-19, the online sales of all companies increased, and the customers of Uuskasutus were interested. “The grand opening was announced at a particular time, but, of course, the address of the shop was ready earlier and some customers were curious enough to find it in advance. At the moment when the shop was launched, there were already 20 orders, and more than 100 purchases were processed on the first day of operation,” comments D. Paakspuu. The online shop has provided the organisation with new customers in the entire of Estonia.

Reasonable Choice

D. Paakspuu believes that environmental factors have caused the trend of responsible use of resources, which, among others, includes the donation of good items and buying of used items. “In retrospection, most of our first customers were people who lacked money for new items and for whom the buying of used items was a substantiated necessity. Now I see an increasing number of customers, who see second-hand as a reasonable choice for the benefit of the environment.

The awareness of environmental issues is developing, and even people who do not wear second-hand clothing, but wish to get involved, donate the items they no longer need to us. It is a growing trend. I like to see the fact that second-hand shops are ceasing to be dark places with bad odours, and are being transformed into light shops on the main streets, looking just like any other store. No one should be ashamed of shopping at these stores,” she says, voicing her observations.

48 | C R I S I S A S C H A N C E

by ANDA A SERE

For greater transparency in last mile delivery By the end of the year, the food monitoring solution created

by Kedeon Solutions in the last mile delivery phase will be used by 50 companies, but it is planned to increase this number to 1000 next year.

A global problem

130 thousand people in the world get poisoned by food and 3.5 thousand cases are fatal. R. Skorovs emphasises that the problem exists all over the world, not only in less developed regions. Due to Covid-19, last mile delivery of food is developing rapidly, which is a relatively new industry with much less regulation than the rest of the food supply chain.

“For example, there are specific rules in the delivery process from the factory to warehouses; there are not as many rules in last mile delivery, as it is a new market, but many risk factors exist at this stage, which can harm both the end consumer and the company’s reputation. For example, relatively recently in Germany, two people died and dozens were poisoned from sausages stored at inappropriate temperatures. In Britain, sandwiches were to blame for such a disaster. Both companies went bankrupt – it no longer mattered whether the producer, the warehouse or another company was to blame, and in Germany the demand for sausage products fell in this case, as the buyers were not willing to take the risk.

We want every company to be able to follow its products and to eliminate the possible problems,” says R. Skorovs.

Opportunity to eliminate problems

“We started the first tests in June and we have concluded that the risk is high in stages where the goods are reloaded, and sometimes the permissible temperature is exceeded during this stage. Companies appreciate that they have the opportunity to understand what is happening in the supply chain, thus preventing possible problems in the future,” says R. Skorovs.

There are already 30 companies in Europe that are willing to use it. By the end of the year it is planned to increase the number of customers to 50, but within the next year it is planned to attract investments and to offer the solution throughout Europe and America.

The equipment developed by the company consists of a sensor, battery and modem, which constantly measure the

temperature, humidity, light, movement and other conditions, sending this data and storing it in a blockchain. This information can be followed by all the involved parties – the delivery company, the restaurant or the company from which the food has been purchased, and also by the buyer. The product packaging has a QR code, which the buyer can scan to see both simplified information about the food, which shows whether it has been transported under appropriate conditions, as well as to access more detailed data on temperature and other parameters. R. Skorovs emphasises that the sensor is turned on the entire time and as the blockchain technology is used, the data cannot be manipulated by changing or deleting them.

Also for pharmacies

Another industry that has shown interest in Kedeon Solutions is distributors of pharmacy products, who ship their products across borders. “During the COVID-19 pandemic these companies faced delays in shipments waiting at the borders, the products were temporarily placed in warehouses, and so on. Often the pharmacy products were damaged, as some of them had to be stored at a certain temperature, humidity, etc. Products can be damaged and losses can total as much as 100 to 200 thousand euros. Reliable and verifiable measurements not only protect the end user, but in the case of problems, also provide the manufacturer with the opportunity to prove that everything has been carried out correctly on its side and that the errors should be sought elsewhere. When the pharmaceutical companies began to reach out to us, we realised that it is yet another interesting market,” points out R. Skorovs.

Photo: Publicity Photos

Kedeon Solutions originates from the final study paper of its founder, Reinis Skorovs, when graduating from Riga Technical University. It was a technical project for the monitoring of food supply chains, and over time, companies that saw its potential demonstrated their interest. Prior to the Covid-19 pandemic, the company had already initiated pilot projects with customers in various countries – Ukraine, Austria and elsewhere, but it was not possible to continue them during the state of emergency. “The pandemic period has helped us to focus on those stages of the supply chain, where the most significant problems might arise and where the solutions currently have the greatest added value. We found another target audience for our solution – last mile delivery exactly for food and other products, regarding which it is important to follow the temperature, humidity and other parameters,” says R. Skorovs.

One of the company’s partners is Blockrocket in Germany, which connects blockchain startups with the largest companies in Germany to help bring solutions to market as quickly as possible. “In Europe we find exactly the German market to be most interesting,” says R. Skorovs.

The pandemic period has helped the Team of Kedeon Solutions (Kristaps Mikasenoks (from left), Reinis Skorovs and Ronalds Sovas) to focus on those stages of the supply chain, where the most significant problems might arise and where the solutions have the greatest added value

C R I S I S A S C H A N C E | 49

by ANDA A SERE

New factory in Kėdainiai Ukrainian pet food producer Kormotech invests €15 million in factory in Lithuania, including €10 million as a loan from the European Bank for Reconstruction and Development The new factory in the Lithuanian town Kėdainiai is the first Kormotech plant outside Ukraine. “But this facility won’t be the last one. Our strategy requires us to build or buy other sites too”, says Nazar Shchyrba, Kormotech Export Director for Northern Europe and Latin America.

As the plant in Lithuania is just opening, its capacity will increase gradually, reaching 10 thousand tons of wet pet food by the end of the year. It is planned to reach a capacity of 20 thousand tons in mid-2022, and the maximum capacity will be 30 thousand tons. The company plans to triple its turnover by 2023.

“The vision of Kormotech is to enter the top 50 players in the world by 2023.

We will continue to strengthen our positions. In Lithuania, we will open a trading house and are now recruiting a team for this. We are getting ready for direct shipments”, says Shchyrba.

Only a two-month delay

With regard to Covid-19, Shchyrba says March 2020 was a difficult time. Even before the introduction of quarantine in Ukraine, some foreign companies – suppliers of equipment – began to restrict the travel of their employees. Part of the equipment was on its way, and part of it had already arrived. But commissioning works on several machines had not been completed. At some point, everything stopped. The company started launching everything that was possible remotely, but some equipment was waiting for service engineers who were isolated for two weeks. “Overall, we postponed the launch of production by two months because of Covid-19. The plant was built in less than a year and we gained some valuable new experiences. For example, our Dutch partners were forced to hire local subcontractors to launch the equipment.

They reluctantly accepted this scenario,

The new pet food factory Kormotech in Kėdainiai plans to reach a capacity of 20 thousand tons in mid-2022.

but the result exceeded all expectations.

They realized that such work can be performed by local partners, which is economically justified,” adds Shchyrba.

Lithuania offered better conditions

“We considered Latvia at first, in particular the city of Ventspils. We were offered good construction conditions.

But while we were already at the stage of studying the expansion agreement in Latvia, we received an offer that had a number of advantages. The Ambassador of Lithuania and representatives of Invest Lithuania came to our office and offered us a much better deal: income tax benefits for 15 years, including 0% for the first ten years and then 6%. In Latvia, by contrast, we only had 5-6 years of the tax break. The second advantage was the right to construct a building for rent, together with the right of redemption for a period of 10 years. In addition, we were offered a return of part of our investments by the government of Lithuania. In Latvia, only European Union grants were possible. But since we are a large enterprise, they would have been disproportionately small”, says Shchyrba.

In Lithuania, the company chose Siauliai and Kėdainiai from several economic zones and decided on Kėdainiai. This town proved more suitable, as there is a world-leading chicken production factory nearby – a key raw material for food production in pouches.

“The service package” from Lithuania contains the opening and registration of a company, a bank account, the drawing up and signing of a contract with the Ministry of

Economy, a selection of contractors, and support for the allocation of land.

“This is powerful support that we have felt and continue to feel. The Kėdainiai Free Economic Zone provides hectares of land, which is divided, paved and filled with utilities. The streets are cleaned and washed. Come and “plug the plant in”. It’s hard to believe, but that’s how it is”, recalls Shchyrba.

Kormotech put the facility into operation and received a permit to manufacture and sell in less than a year.

Industry is developing

Shchyrba says that for the last 5 years, the Ukrainian market for pet food has been developing quite rapidly. “Worldwide, Kormotech ranks 61st among the top companies, with an annual turnover of $63 million in 2019 and it is the number three player in terms of growth, according to the Petfood Industry. We export our products to 32 countries, including the United States, the United Kingdom, Germany, France, Finland, Sweden, the Netherlands, Spain, Italy, Poland, Turkey and Chile”, he adds.

Since March 2020, shipments to export markets slowed down due to a number of restrictions, including border crossings.

Despite that, Kormotech sales increased by more than 20% in March 2020.

Kormotech Ltd. is a leading Ukrainian manufacturer of pet food for cats and dogs. The company’s facilities include two dry and wet pet food plants in the Lviv region in Ukraine and one plant in the Lithuanian town Kėdainiai.

Kormotech is a family-owned company and the final beneficiaries are Rostyslav and Olena Vovk.

50 | C O V I D I C T I O N A RY

The Corona ABC Do you speak corona? Make sure that your pandemic parlance is up to scratch – with our COVIDictionary.

Here are some of the key terms you need to know to understand the outbreak and be able to talk about it.

by ALE X ANDER WEL SCHER

t

he coronavirus pandemic is changing how we speak and has quickly expanded our vocabulary.

Together with the COVID-19 outbreak, new terms and a whole set of colourful and creative expressions have emerged and entered our everyday language. The Merriam-Webster dictionary has added a total of 535 coronavirus-related terms, new words and meanings because of “the speed with which these new words became essential to communication.”

While some of them are new word creations and neologisms, others that are not even new went from being a relatively unknown piece of academic jargon to something we hear multiple times a day. To keep your language up-to-date amid the pandemic, Baltic Business Quarterly presents a lockdown lexicon from A to Z.

Apturi Covid: Name of the

official contact tracing app that Latvia introduced as one of the first countries in the world and has so far been downloaded over 105,000 times. Many other countries including Estonia with the app Hioa, but Lithuania has not done so yet.

Baltic Bubble: Created by Estonia,

Latvia and Lithuania in mid-May by reopening their internal borders in a move to help put their economies back on track. It allowed the free movement of their citizens between the Baltic states – at a time when many other countries were still introducing travel restrictions.

Buckwheat: Mid-March saw residents rushing to empty grocery store shelves of buckwheat. Many homes in the Baltics since then are wellstocked with the versatile fluffy brown grain. The trusty national staple also quickly became a symbol of mockery – as an embodiment of panic and fear over COVID-19.

lockdown. It is the result of weeks of staying at home and eating more than usual after stockpiling left the fridge full. Roughly translated as “corona fat” but in its broader meaning corresponds to something like “flab”.

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istance learning: Many schools worldwide moved to online remote learning away from the classroom.

This has placed a heavy burden on working parents, who had to organize work and study at home. Concerns also arose that some children might fall behind due to missing access to internet-enabled devices, insufficient bandwidth, and a lack of direct instruction from teachers.

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oomscrolling: Have you found yourself obsessively consuming pandemic news and keeping up with the latest upsetting messages on websites or social media networks all day long?

Human sensationalism and technical infrastructure encourage this endless scrolling through negative news online.

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rive-in: The old, already presumed dead drive-in cinema has undergone a renaissance during COVID-19 times.

Concerts, services and other events can also be enjoyed from the comfort of your own car – to experience good entertainment at a distance. Besides fast-food chains, there is also now a drive-in at some supermarkets and at coronavirus testing stations.

abin fever: It has been weeks or months within the walls of your home, right? Social distancing or selfisolation left some people experiencing symptoms of cabin fever – the feeling of despair when under conditions of confinement. This might come along with successive feelings of elation and then turn into a “coronacoaster”. ovidiot: A person who acts like an irresponsible idiot during the COVID19 pandemic, ignoring common sense and disregards safety measures or public health advice. Sometimes also referred to as “Morona”. Like the virus itself, no one is immune – #covidiot has been trending on Twitter with plenty of examples.

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oronials: The generation that will be born after December 2020 as a result of the enforced quarantining of their parents at home during the coronavirus pandemic. Its members will demographically become “quaranteens” in 2033-34 – and might be perfectly used to distance learning.

Coronaspeck: German expression for

the extra weight gained during the

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pidemiologist: A science expert who studies, models and projects the emergence, spread and course of epidemics caused by infectious diseases such as coronavirus. Based on data and samples collected by them, virologists study the virus itself to understand how it works. Both professionals have made their expertise available to the media – and appear tirelessly on television and radio.

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ace-mask: Previously mainly known as an indulgence at a spa day, facemasks have unexpectedly become

C O V I D I C T I O N A RY | 51 global competition for every single job. To attract talent from around the world to live and work in the country, Estonia has launched a new Digital Nomad Visa for remote workers and location-independent entrepreneurs.

Keep safe: Few things have been left

Photo: AdobeStock

a mandatory accessory when going out in public. While this was a cultural norm in many Asian countries long before COVID-19, embracing face-masks has been met with reservation in the Baltics and other Western countries.

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ace-shield: Additional protective equipment for healthcare professionals and other frontline workers to protect them from virus transmission through air droplets. It is usually worn and used on top of face-masks and other gear to protect the eyes and nose.

Do you have a 3D printer? Then you could churn out some yourself and help to overcome PPE shortages.

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lattening the curve: The mantra and strategy of public health authorities to at least slow the spread of the virus during the COVID-19 pandemic. Its aim is to turn a peak into a broader, longer epidemic curve – to prevent a spike in infection cases that stretches healthcare systems beyond their limits.

Guest workers: Who picks the

strawberries and other berries from the fields during the corona crisis?

The question caused a stir and stand-off that, in Estonia, was dubbed the “strawberry war” in local media. Following heated debates, the seasonal harvest helpers from outside the EU were allowed to enter the Baltics but are subject to strict regulations and controls.

Hand sanitizers: They have become

part of our daily lives since the coronavirus outbreak and are a main form of protection during the COVID-19 pandemic. Sanitizers lower the amount of bacteria, viruses and other microbes on a surface to a safe level, although disinfectants are better at killing them.

Herd immunity: Sweden famously

took a totally different approach than the rest of the world in trying to control coronavirus by developing a “herd immunity”. This occurs when a sufficient proportion of the population either gets infected and builds up an immune response to it naturally or gets a protective vaccine to stop its circulation. The threshold for coronavirus herd immunity is broadly estimated at 60% of the population.

Infodemic: The spread of COVID-

19 has been accompanied by what the World Health Organization has described as a “massive infodemic”.

The huge demand for information on the disease has created the perfect breeding ground for myths, fake news and conspiracy theories. Some of them can be dismissed as ludicrous and largely harmless, but others are dangerous and life-threatening.

Job market: COVID-19 led to an

enforced work-from-home experiment that will most certainly change the job market and could result in a truly

unaffected by COVID-19 – even e-mail sign-offs changed during the pandemic.

Formal e-mails also now often end with “Keep safe”, “stay healthy” or similar wishes. The beginning of such messages is also often tailored to the situation, acknowledging the challenging times in the world.

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ockdown: The main quarantine strategy implemented by public authorities to control the virus spread, consisting of emergency measures such as closing public buildings and stayat-home orders to restrict movement and social contacts. By early April 2020, around 3.9 billion people worldwide were under some form of lockdown – more than half the world’s population.

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ortality: How deadly is coronavirus?

The metric used to calculate this is the infection fatality rate (IFR) – the ratio of people with Covid-19 who died from the disease divided by the number of actual infections. The risk of dying from the virus, however, can vary considerably depending on age, ethnicity, access to healthcare, socioeconomic status and underlying health conditions.

New normality: At the end of the state of emergency originally declared to manage the COVID-19 pandemic, the governments in Tallinn, Riga and Vilnius were quick to announce a new phase of normality. It has restored many of the restricted freedoms but maintains certain safety norms in place. For some, however, the end of the restrictions and confinement created feelings of “lockstalgia”.

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nline boom: Online food delivery has gone from being a convenient luxury to an ultimate necessity during

52 | C O V I D I C T I O N A RY

the COVID-19 pandemic. Retailers across the Baltics have seen huge sales growth for groceries and other essential items online. Couriers and other delivery companies also benefited from the boom, which is set to continue in the near future.

Pandemic: A pandemic is a disease

that spreads in multiple countries around the world at the same time.

It is a type of epidemic – an upturn in the spread of a disease within a specific community. Both are preceded by an outbreak – a sudden rise in the incidence of a disease.

PPE: Personal protective equipment

is clothing and kit such as face-masks, aprons, gloves and goggles worn by medical staff to reduce exposure to coronavirus. Hospitals across the world, and particularly those in areas hard hit by the virus, have been struggling with PPE shortages since the beginning of the pandemic.

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uarantini: An alcoholic or even any other beverage mixed and sipped at home while under quarantine, consumed often regularly in special “locktail” hours – with virtual cheers via a video-conference platform and “quarantunes” as a musical background.

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ueen’s Speech: Queen Elizabeth II probably gave the most impressive public address of all the global leaders on April 5 when she called on people to tackle the disease together and remain united and resolute. “Better days will return”, said the Queen during the lockdown. “We will be with our friends again; we will be with our families again; we will meet again.”

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espirator: While a face-mask fits loosely over the face and covers the nose and mouth area, the respirator is a tight-fitting mask that offers a higher level of protection by creating a facial seal. It continues to be merely functional and has

not (yet) followed the face-mask’s transformation from a medical essential to a fashion item and style accessory.

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-number: A simple but crucial number at the heart of understanding the threat posed by COVID-19. The reproduction number – or simply the R-number – measures the average number of people that one infected person will pass the virus on to. The new coronavirus turned out to have an R-number somewhere between two and three.

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econd wave: While some countries are still dealing with large epidemics, others currently controlling the virus already fear the “second wave” – a sustained resurgence in the number of cases of infection following the ease of restrictions and initial containment procedures.

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elf-isolation: Staying inside and avoiding all contact with other people for a full 14 days, with the aim of preventing the spread of disease.

The order of the day for anyone who shows symptoms and might have been exposed to the virus, and is at risk of developing COVID -19 and passing it on.

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ocial distancing: The practice of maintaining a greater than usual physical distance from other people and avoiding direct contact in order to minimize exposure to coronavirus.

It remains necessary despite the relaxation of many restrictions.

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taycation: The 2020 summer holidays were different for most of us. Due to uncertainties and travel restrictions, millions of people around the globe went for a staycation – a holiday at home or some domestic location.

Travellers from Estonia, Latvia and Lithuania also used the opportunities offered by the Baltic Bubble to explore the neighbouring Baltic countries.

Superspreader: A person who passes

on the virus more widely and infects

a disproportionate number of other individuals – either by being in contact with more people or emitting more of the virus. Whether someone becomes a superspreader probably depends more on circumstances than on the person’s individual biology.

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riage: This is a process used by medical professionals for the prioritization of incoming patients and to determine which of them should be treated first. A matter of life and death and a horror scenario of a pandemic that has already become a bitter reality in some places around the world following the coronavirus outbreak.

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ncertainty: Retrospective investigations have identified the first human cases with coronavirus symptoms in early December 2019.

Spreading further, the virus unfolded its full power some months later and changed life for almost everyone around the world. When will life go back to normal? No one really knows – we are living in uncertainty.

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entilator: A medical device that takes over the breathing process when a disease has caused the lungs to fail and the patient cannot breathe well enough on their own. People with COVID-19 may be placed on a ventilator if the amount of oxygen in their blood dips below a certain threshold.

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-shaped recession: Steep decline, quick recovery – the best-case scenario for the economic rebound after the COVID-19 crisis. Is it likely?

It depends on how we manage the virus and whether there is a second wave or not. Other options include a slower U-shaped recovery and the up-and-down W-shaped recovery that would see a second recession before a return to an economic expansion.

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FH: Working from home has become a matter of course for many – including the improvisation and time juggling

I M P R I N T | 53

that came along with it. Both employers and employees are often divided over the benefits and disadvantages of remote work that has rapidly replaced face-toface interactions in the business setting.

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HO: The World Health Organization has a central role in the fight against the coronavirus pandemic. It declared COVID-19 a pandemic on March 11, pointing to the alarming levels of spread and severity of the virus. US President Donald Trump has sharply criticized the WHO in the coronavirus pandemic, accusing it of responding too slowly and helping to cover up China’s outbreak.

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uhan: A previously largely unknown Chinese city of 11 million people that is at the origin of the current coronavirus pandemic. It was sealed off entirely by the Chinese government for several weeks after being particularly hard hit by the virus.

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XX: Minimize contacts, keep social distance and stay at home – a hard burden especially for singles and those in need of love. Dating with people that you have met via an app – how is that supposed to work during a pandemic? “You are your safest sex partner”, reads one of the numerous official pieces of advice from the New York health department for its citizens.

Yoga mat: Closed gyms and psychological stress made many roll out the mat at home for workout sessions or relaxation exercises – alone or together with others in online lessons on Zoom or Skype. The new privacy and more discreet environment came along with less group dynamic and the disadvantage that the instructor could not advise you on your moves.

IMPRINT Magazine “Baltic Business Quarterly” Founder: German-Baltic Chamber of Commerce in Estonia, Latvia, Lithuania (AHK), Breite Straße 29, D-10178 Berlin, Germany Executive Board Member: Florian Schröder Editorial office: Strēlnieku iela 1-4, LV1010, Riga, Latvia, +371-67320718, www.ahk-balt.org Publisher: SIA “Žurnālu izdevniecība Lilita”, Brīvības iela 85 - 4, Rīga, LV-1001 20004547, lilita@lilita.lv, www.lilita.lv Reprint allowed only with a written agreement with the Founder. ©2018.AHK Printed in printing house “Lietuvos Rytas Print”, Lithuania Cover photo: Matīss Markovskis Editor in chief: Līva Melbārzde, +371 6 732 0724 Reporters: Anda Asere, Dr. Ąžuolas Čekanavičius, Santa Dunaiska, Kevin Gerretz, Monta Glumane, Kristaps Klauss, Kaarel Kressa, Māris Ķirsons, Martin Mäesalu, Karoline Schlegel, Sarmis Spilbergs, Vineta Šķērīte, Alexander Welscher, Magdalena Worst Photographers: Arina Solntzeff, Ritvars Skuja, Matīss Markovskis, Jake Farra, Rimantas Matulionis, Dainis Ģelzis Art Director: Vitalijs Suseklis Advertising Director: Līva Melbārzde Tech Director: Gints Mucenieks Advertising Editor: Jānis Rožkalns, reklama@lilita.lv Digital editions: App Store and Google Play ISSN 2592-2570

Publisher is a member of Association of Press Publishers of Latvia. lpia.lv

OUR PREMIUM MEMBER S

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oom: This video-conferencing app has become popular and widely used due to WFH. It sometimes leads to unwanted insights into the private life of colleagues and has also introduced the phenomenon of “zoombombing” – the hijacking and/ or interrupting of video-conferences.

BAVARIA - PARTNER S TATE 2020

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56 | B U S I N E S S LO C AT I O N

Liepāja is Ready to Welcome New Investors Liepāja has historically been an industrial port city, which already developed in a single synergy in the 19th century, forming the economic basis for the overall growth of the city.

by MONTA GLUMANE

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oday the main characteristic industries of Liepāja are cargo reloading, processing and logistics at the port, which is possible due to the advantageous geographical location of Liepāja with extensive connections of railways, waterways, roads and aviation traffic. We can also mention the revival of aviation, along with the reconstruction of Liepāja International Airport and the establishment of the airBaltic Pilot School as well as the aircraft maintenance centre in Liepāja, which may possibly be followed by other projects in the future. Accessibility and transport connections have also facilitated the establishment and presence of industrial manufacturing companies. The main industries are metalworking, light industry or the textile industry, and certainly also modern technologies and IT.

Liepāja SEZ

Liepāja Special Economic Zone (LSEZ) plays an important role in the development of Liepāja companies, covering an area of about 2/3 of the city, an historically, when establishing LSEZ, the port, airport, industrial territories and former military base in Karosta were already included in it.

“It is true that almost all production, logistics and transport companies are located in the territory of LSEZ, which form a common, united and high-quality business environment or economic ecosystem,” says Jānis

Lapiņš, Manager of Liepāja SEZ. Of all these companies, 43 are capital companies of Liepāja SEZ, which benefit from the state benefits specified in the regulatory documents in order to develop faster. “JSC UPB should definitely be mentioned in this regard, which works and develops in the territory of Liepāja SEZ, the turnover of which in 2019 totalled 212 million euros, and which has more than 1800 employees. The former company Liepājas Metalurgs, which once used the benefits, but later refused them due to the restrictions on competition, is also located in the territory of Liepaja SEZ,” says J. Lapiņš. The Manager of LSEZ says that there are a number of industrial parks in Liepāja and each has its own preconditions and history.

Several industrial parks

It is logical that industrial parks are developing in the territories of former production plants. For example, Liepaja Business Centre in the old meat processing and packaging factory was developed by a foreign businessman several years ago, and today there are 16 modern companies that provide more than 1000 jobs.

Also, the Old Ostmalas Business Park is developing rapidly in the territory of the former furniture factory with the help of local entrepreneurs.

The idea of Karosta Industrial Park, which dates back to 1999, is also being implemented. Today, Jensen Metal production plant is working there, which was constructed

Population: 68 535 (2019) Average gross salary (euro): EUR 848.

Number of working residents in Liepāja: 29 287 Processing industry production output (mil. EUR): 90.9 Processing industry sales (mil. EUR): 92.1 Port cargo turnover (mil. t): 1.58 Number of persons served in tourist accommodations: 15 787

in 2019; Interspiro is currently under construction and two more new production plants are being designed. The story about business territories at Meldru/Dūņu streets in Liepāja is similar. Lesjofors is already working there, while JSC UPB has just coordinated the technical project of a new production plant right next to it. J. Lapiņš mentions that when listing the business parks, Lauma, Hidrolata, and Mašīnbūves rūpnīca must not be forgotten.

They are also currently working as industrial parks, renting production facilities to other companies.

The biggest challenge

The biggest challenge for the management of Liepaja SEZ has been the re-planning and arrangement of the former territory of Liepājas Metalurgs, in order to create the environmentally friendly, modern and innovative industrial park with a total area of 120 ha. The goal – modern companies in the field of technologies

Liepāja has extensive connections of railways, waterways, roads and aviation traffic

B U S I N E S S LO C AT I O N | 57 Liepāja Special Economic Zone (LSEZ) plays an important role in the development of Liepāja companies, covering an area of about 2/3 of the city

Photo: Liepāja SEZ

and IT, 1000 new jobs within the next 15 years. Attracting of foreign investors, including Scandinavian entrepreneurs, has been a clearly defined requirement since the very beginning of the establishment of Liepaja SEZ. “There were many risks from the point of view of investment protection, the availability and qualification of human resources, and other factors. But there were also a number of advantages – the ability to adopt quick and constructive decisions, the transport connections – port, airport, railway, roads, as well as ports and industrial traditions,” reveals J. Lapiņš. The first foreign investors arrived in Liepaja in 1999, less than two years after the adoption of Liepaja SEZ Law. In recent years, 6 new factories have been built, 5 are still under construction, but at least 7 are being designed. However the pandemic could introduce some corrections.

Active recreation and culture

Along with a high-quality business environment, in which the determining factor is quick and

simple decision-making and stability, Liepāja also provides a high-quality living environment with active recreation and culture opportunities.

The city is located between the Baltic Sea and Lake Liepāja, which are connected by the Trade Canal.

A tram line winds through the city as a special connection. It is the oldest electric tram line in the Baltics. The city by the sea and by the lake has its own tennis hall at Liepaja Olympic Centre (LOC), which is also appreciated by world-class stars, such as Anastasia Sevastova who comes from Liepaja and is one of the TOP 20 players in the world.

Liepaja also has its own LOC arena, swimming pool and SPA, wake park, adventure park, its own football, basketball and hockey team, as well as the basketball player of NBA club Dallas Mavericks Kristaps Porziņģis comes from Liepāja. The culture opportunities available in Liepāja include the Concert Hall, as well as the oldest Latvian professional theatre, cinema, and art galleries, but Trinity Cathedral can boast the largest original, mechanical

According to the data held by the State Revenue Service, in 2019 about 280 economically active manufacturing companies were registered in Liepāja, employing a total of about 6440 employees.

Production volumes in 2019 in Liepaja have increased by 10.3% or 29.1 million euros in the volume of industrial production, which is mainly formed by companies operating in the territory of Liepaja SEZ.

organ in the world that has not been reconstructed. All year Liepāja hosts a variety of events to suit everyone’s taste – exhibitions by local artists and performances by internationally renowned artists, classical music concerts and beach festivals, amateur sports competitions and European championships. One can enjoy a tasty meal at any of the lovely cafes or the fine restaurants, while delicious drinks can be enjoyed in any of the local breweries, bars or cocktail bars. Liepaja also offers a wide range of accommodation options – from neat apartments to design hotels. The most unusual and surprising hotel in the world is Karosta Prison, which is the only military prison open to tourists.

Also noteworthy is Liepāja beach, with its unusually white and fine sand, that can rarely be found on any beach. Liepāja has the amenities of a small city with a global reach.

58 | B U S I N E S S LO C AT I O N

“Everyone of us most surely use something produced by Lesjofors, for example, on the phone or TV. It is just that no one really knows where these parts are manufactured,” Ingars Jaunzems, Director of LSEZ SIA Lesjofors Springs LV

The biggest industries in Liepāja

by MONTA GLUMANE

Lesjofors Springs METAL The manufacturing companies in each industry have their own development story. For example, the tradition of metalworking began in the middle of the 19th century along with the construction of Liepaja lighthouse, which was definitely continued by Bekers un co, which later turned into the flagship of Liepaja industry – Liepājas Metalurgs.

Currently, there are a number of Scandinavian metalworking companies that successfully work and export their products, such as Trelleborg Wheel Systems Liepaja which manufactures tractor wheel discs, Lesjofors which produces various types of springs, Caljan which is the creator of telescopic conveyors for mail stations, Jensen Metal which produces equipment for the food industry, etc.

Springs from Liepāja, Even for Lamborghini

Company Lesjofors Springs LV manufactures springs for goods used by each of us, as well as for well-known worldwide brands such as McDonald’s, Husqvarna, Stihl and even Lamborghini.

The company production plant in Latvia, Liepāja has been engaged in the production of springs, gas charged shock absorbers and stamped parts since 2003, as well as it distributes the products manufactured by Lesjofors Group. Liepāja was chosen as the only place for the plant in the Baltics, which attracted investors both in terms of the premises required for the plant and due to the fact that Liepāja has historically

been known as an industrial city with a strong metalworking industry.

Currently, the company has grown to such a level that at the beginning of April it moved into new premises of 11 000 square metres, into the construction of which Lesjofors invested around 6 million euros.

Springs for all cars The products manufactured by Lesjofors are small components – stamped or spring parts, which are produced in large batches of thousands of pieces. “We do not produce any finished parts, therefore all the products that we make are just components of another product in the making.

They are meant for manufacturers who operate in various industries and who require springs or stamped products,” says Ingars Jaunzems, Director of LSEZ SIA Lesjofors Springs LV. The products produced

by Lesjofors reach representatives of various sectors, such as electronics, medicine, automobile engineering, telecommunications. Lesjofors manufactures springs for all car models in the world, focusing especially on those found in, for example, car lamps, seats, engines.

In general the company does not produce chassis springs, with the exception of the Lamborghini order.

The company’s customers also include well-known brands such as McDonald’s, Husqvarna, Stihl.

“Everyone of us most surely use something produced by Lesjofors, for example, on the phone or TV. It is just that no one really knows where these parts are manufactured,”

Year of founding: 2003 Employees: 95 Turnover: 6 Million euro

Lesjofors Gas Springs Year of founding: 2008 Employees: 60 Turnover: 3.3 Million euro

reveals I. Jaunzems. For each of the product types Lesjofors Springs LV has approximately 2000 article numbers, which are updated annually.

Unique in Europe Lesjofors currently operates about 30 factories around the world and Liepāja is the only factory in the Baltic states. The Liepāja plant is slightly unique in Europe. It produces two products that are certainly not produced anywhere else in Europe: gas springs and power springs.

Elsewhere they are only produced in the USA, while gas springs – only in Korea. Lesjofors Springs LV mainly focuses on the Scandinavian market due to its convenient logistics, but products are also delivered to, for example, Mexico, China, India and elsewhere. “I think that Liepāja is a very good place for the development and planning of production, as the city is industrial.

Although we are located by the sea, there have always been factories that produce something here. Also, the support provided by Liepaja Special Economic Zone is a big motivating factor, because by investing in equipment and modernising the factory, it is possible to recover taxes. It motivates, and drives us forward to invest,” says I. Jaunzems.

B U S I N E S S LO C AT I O N | 59

Photo: Dainis Ģelzis

TEXTILE Along with the construction of the textile company Lauma in the 1970s in Liepaja, light industry declared its strong positions here, and it was also able to switch and adapt to market conditions after the collapse of the Soviet Union. The spacious premises of Lauma can also be called an industrial park, as a number of other companies that produce medical patches, geotextiles for road construction, and medical bandages, as well as others have found their home there.

Patches for Every Occasion

Manufacturer of medical patches NordePlast is not afraid of competition and is looking to become a popular brand in Europe.

LSEZ SIA NordePlast began its operation in 2016, but the first production batch was sold at the beginning of 2017. Although the company is relatively new and small, this does not prevent it from competing with large and well-known foreign manufacturers of patches.

Currently, the company produces about 100 different types of patches and 90% of them are exported to Ukraine, Poland, Belarus, as well as in small quantities to Russia and Georgia. However, the company has also begun to develop actively

SIA NordePlast

Location: Liepaja (Latvia) Turnover: 141 232 euros (in 2019) 207 991 euros (in 2020 until the end of June) Number of employees: 12 Year of founding: 2016

in the Baltic states – starting with Latvia and moving to Estonia and Lithuania at the same time. “The competition is very high. In Latvia we are the only ones who produce patches, but we have to compete with big foreign brands, such as Compeed, Urgo, which have been operating in this market for a long time. They are widely represented in stores, as well as pharmacy chains. There are also many small distributors representing the Chinese manufacturers,” says Romāns Gramiko, Member of LSEZ SIA NordePlast Board.

A solution to every problem The company offers various product lines for different needs, such as wart remover patches or blister patches and others. “Sometimes the consumers are not aware themselves of what patches they require. Our goal is to keep up with the news in the world market, the innovations, the changes in materials and technologies. We also follow the competitors, in order not to lag behind and to move forward in the same step. Our products have to be modern, attractive and the consumers must be aware that there are many types of patches.

You can find a solution to every problem,” explains R. Gramiko.

2000 patches per minute Quite recently, the company expanded its production plant and received new equipment, which allows it to double its production capacity. So far it has been possible to produce 2000 patches per minute.

One of the main goals of the company is to sign agreements with local pharmacy networks. The company is also ready to cooperate and

Quite recently, the company expanded its production plant and received new equipment, which allows it to double its production capacity. So far it has been possible to produce 2000 patches per minute

produce patches for private brands.

“Our plans to develop and grow are huge. The next product we would like to implement is sterilised products that are suitable for hospitals. When the certification is received, these products will be available throughout Europe,” reveals R. Gramiko.

The company plans to continue its development in Liepāja and praises the fact that Liepāja has a great geographical location – in the middle of Europe, the port is located next to it, and cargo transit is convenient here. Great support is also provided by the municipality.

TECHNOLOGIES In recent years, technological companies have announced their operation, which develop modern technological solutions and products themselves – electric karts, industrial drones, 360-degree robotic cameras, etc. For example, the engineering company of equipment assembly LSEZSIA EURO DK was founded in 2007, and currently exports its production to more than 150 countries. About 62% of the equipment is exported to Europe, and the rest to other countries, such as Asia, Africa, Saudi Arabia. Starting from 2009, the company successfully produces various equipment for wired and wireless network installations: routers, antennas, network switches, cables, security and monitoring tools. The company range includes about 1300 items from the leaders of the network goods industry, such as Ubiquiti Networks, Mikrotik, Teltonika, Cambium Networks and others.

EURO DK not only cooperates with manufacturers of equipment, but also with Amazon, Ebay and other trading platforms. In 2016, the company received the status of a Liepaja Special Economic Zone company. In turn, in 2018 the company completed the construction of a new office and warehouse building in Liepaja and plans to expand in the future.

60 | LA W & TA X

Legal effect of electronic signatures in the Baltics ELLEX IN THE BALTICS

Dr. ĄŽUOLAS ČEKANAVIČIUS ASSOCIATE PARTNER

SARMIS SPILBERGS ASSOCIATE PARTNER

t

he COVID-19 outbreak has changed the way in which many businesses have to function.

In the light of governmental restrictions, many companies have implemented working from home practices as a solution to their business continuity. As many people are working remotely, obtaining original “wet ink” signatures for commercial agreements has become difficult. In this digital era electronic signature is the best solution.

However, it is important to know that not every electronic signature will have the equivalent legal effect as a handwritten signature.

EU rules

Article 25 (2) of eIDAS Regulation1 establishes that a qualified electronic signature shall have the equivalent legal effect of a handwritten signature. Thus, it is clear that “qualified electronic signature”

MARTIN MÄESALU SENIOR ASSOCIATE

has an equivalent legal effect of an original “wet ink” signature under the EU law. “Qualified electronic signature” means an advanced electronic signature that is created by a qualified electronic signature creation device and is based on a qualified certificate for electronic signatures2. Generally speaking, services for qualified electronic signatures (for example, issuing qualified certificates for electronic signatures) in the EU can be provided only by qualified trust service providers, the list of which is publicly available3.

From the practical perspective we see that businesses sometimes sign documents with electronic signatures which do not meet the requirements of the qualified electronic signature. Such signatures fall under the definition of “advanced electronic signature”4 or simple

KEVIN GERRETZ ASSOCIATE

“electronic signature”5 provided for in eIDAS Regulation. These electronic signature solutions are also offered by world-wide popular signing platforms such as DocuSign.

Depending on jurisdiction and other circumstances, DocuSign is a onestop shop for all types of electronic signatures, including advanced and qualified electronic signatures6.

The EU law stipulates that it is for national law to define the legal effect of “non-qualified” electronic signatures. Therefore, the legal effect of a “non-qualified” electronic signature (i.e. advanced electronic signature or simple electronic signature) depends on the national law applicable to a certain agreement.

Lithuania

The Lithuanian national law7 establishes that an electronic signature which does not meet

LA W & TA X | 61

the requirements for the qualified electronic signature provided for in eIDAS Regulation will have the equivalent legal effect of a handwritten signature, where the users of that electronic signature: (i) agree, in writing, in advance and (ii) where it is possible to store that agreement on a durable medium. In the absence of such prior written agreement by the parties on the use of “non-qualified” electronic signature, the agreement will be deemed not concluded in written form. The legal effect of such agreement depends on the type and amount of the contract, and on other circumstances.

Legal consequences under the Lithuanian law may vary from complete validity of the agreement (for example, agreements which may be concluded in non-written form) to the loss of the right to use testimony of witnesses as evidence in court, or even voidability of the agreement in some specific cases.

Latvia

Under Latvian national law8 a document is regarded as singed by the individual personally if a qualified electronic signature is used, or electronic signature which does not meet qualified signature requirements, but on the use of which the parties have agreed in writing (on paper with ink signature or electronically using qualified electronic signatures). If any of the two types of electronic signatures are used, then such electronic document is regarded as equivalent to written document. This is relevant for such documents which in accordance with law have a mandatory written form requirement. There are, however, plenty of daily commercial or consumer contracts where written form is not mandated and it is sufficient to meet a lesser standard, for example, providing information to consumers electronically so

that they can download/save the information, but without adding any type of ink or electronic signature from the seller or requesting such in return from the consumer. In other words, there are still plenty transactions that can be entered into through “click/accept” buttons, whereas in cases where document must be “in writing”, but parties cannot exchange ink signatures, then one of the two electronic signature types noted above can be used for Latvian law governed documents.

Estonia

Under Estonian national law, the feasibility of use of electronic signatures depends on the type of contract or document. Where the document is subject to a mandatory written format, one should give effect to such document by means of a qualified electronic signature (defined as a digital signature9 under Estonian law). Alternatively (and provided that the transaction is given an electronic form) Estonian law allows the use of any other electronic signature given in a manner which allows the signature to be associated with (i) the content of the transaction, (ii) the person entering into the transaction and (iii) the time of entry into the transaction.10 Theoretically, certain advanced electronic signatures may meet those conditions and therefore be used to give effect to documents subject to written form, however

1

this has not been tested in court.

Furthermore, it is theoretically possible that in rare circumstances also a simple electronic signature (such as signature in the form of a picture, text, stamp etc.) may qualify as equivalent to a handwritten signature, where the (i) use of such a mechanical signature is common and (ii) the other party does not require a hand-written signature immediately.11 Again, there is no established practice on this. However, and regardless of the above, all electronic signatures may in any case be used to give effect to documents which are not subject to any mandatory form, or which are subject to a form which can be reproduced in writing.

Conclusion

Each business should be clear about electronic solutions they use to sign the documents. If agreements or other documents are signed with qualified electronic signatures, such signatures have the legal effect equivalent to original “wet ink” signatures under the EU law.

However, if electronic signatures do not meet the requirements of the qualified electronic signature, businesses should evaluate all related legal risks. The applicable national law, the type and amount of the agreement as well as other circumstances become particularly important for determining the legal effect of such agreements.

Regulation (EU) No 910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC. 2 Article 3 point (12) of eIDAS Regulation.

3 https://webgate.ec.europa.eu/tl-browser/#/ 4 Article 3 point (11) of eIDAS Regulation.

5 Article 3 point (10) of eIDAS Regulation.

6 https://www.docusign.com/learn/eidas-regulation-primer/ 7 Article 5 (1) of Law of the Republic of Lithuania on Electronic Identification and Trust Services for Electronic Transactions 8 Electronic Documents Law, art 3.2, https://likumi.lv/ta/en/en/id/68521-electronic-documents-law 9 In practice, this includes signatures that are given by means of national ID-card, mobile-ID, digiID and Smart-ID. 10 Section 80 of the General Part of the Civil Code Act (tsiviilseadustiku üldosa seadus).

11 Section 78 (2) of the General Part of the Civil Code Act.

62 | T R A D E F A I R S

Focus on Hybrid Trade Fairs Messe Düsseldorf is one of the largest companies in the trade fairs industry.

Wolfram N. Diener was appointed as President & CEO of Messe Düsseldorf recently. Baltic Business Quarterly put several questions to him to enable our readers to get to know him better.

by LĪVA MELBĀRZDE Mr. Diener, could you please tell us a little about your professional experience before you became CEO of Messe Düsseldorf?

I have spent almost my entire professional life in the trade fair business. I was first allowed to organize large events in 1991 for the State Garden Show in Pforzheim, Baden-Württemberg, where I was in charge of the catering and events department for over half a year. After Pforzheim and five years in Hamburg, Messe Frankfurt sent me to Asia as a member of the Board of Management at the age of 33.

I could not turn down such an offer.

In Shanghai, I then spent four years as Managing Director of a joint venture involving the German trade fair companies of Düsseldorf, Munich and Hanover, the Shanghai New International Expo Centre Ltd. That was an exciting time with a lot of dynamism. Until then there had only been smaller exhibition centres in Asia.

After various management positions at Asian trade fair and congress companies, I was a member of the management board of UBM Asia Ltd. In Hong Kong until 2018 – UBM was the world’s second largest organizer at that time and is now part of the Informa Group. I worked for Las Vegas Sands to build up their trade show and convention center in Asia. And then Messe Düsseldorf knocked on my door.

What do you see as the three most important strategic tasks you want to achieve in this position?

First and foremost, of course, is the strengthening of our trade fairs. We also

plan to expand our range of services - both analogue and digital. We were already very well positioned digitally even before Corona. Hybrid trade fairs are not really new for us, as we have been accompanying our trade fairs with various digital services for a long time. But of course we will continue to expand this area. For example, glasstec VIRTUAL, the first purely digital event organised by Messe Düsseldorf, will take place in October 2020. This is a service for exhibitors participating in glasstec 2021. In general, we will continue to focus on hybrid formats as there is no substitute for on-site presence.

A special focus will also be on foreign business. The national exhibition market is highly saturated. Growth is almost only possible by displacement, for example through spin-offs. This means that individual segments are spun off from an existing trade fair and installed as independent events.

I see much greater potential abroad.

If our financial situation permits, we will talk about acquisitions abroad.

I am not just referring to trade fairs that fit into our existing portfolio. It is important to me to be open-minded, which means that I generally do not close my mind to any new trade fair topic if it seems promising - and that includes both Germany and abroad.

Because of COVID-19 you became CEO of Messe Düsseldorf during a difficult time. How quickly do you think the trade fair business will recover and in what direction is it actually developing?

Of course, this depends very much on

the further development of the pandemic, which is very difficult for everyone to assess because of its dynamics. However, it is particularly important, especially in a time of crisis, to provide companies with a platform for their new products, innovations and trends. Messe Düsseldorf’s hygiene and infection protection standards ensure that the safety and health of our exhibitors, visitors, partners and employees are protected in the best possible way. We are also in close contact with the health authorities in order to implement any new measures for the exhibition grounds.

Everyone is taking action to make trade fairs a safe experience, even in these times.

I could well imagine that people will reduce their willingness to travel, even if we hopefully soon have the virus under control. The trend could then move towards smaller, more local trade fairs as spin-offs of the world’s leading trade fairs, due to shorter journeys.

What do you think about virtual fairs? Do they have a future?

In my opinion, the technology is simply not yet so advanced that virtual measurement offers an efficient and userfriendly platform like a physical trade show does. This may of course change in the future. But in my experience, the personal relationships and the small casual experiences during a trade fair are not so easily replaced by digital solutions.

That’s why we focus on hybrid trade fairs that combine the advantages of both areas. This works very well, especially in the field of matchmaking. The tool brings exhibitor representatives and visitors together even before the trade fair begins and allows them to make appointments. This makes the trade fair visit more efficient for both sides.

Do you see an opportunity for closer cooperation with Baltic trade fairs, e.g. by mutually advertising exhibitors?

Until recently our corporation didn’t want to engage with other trade show organizers in -Europe. However, we meanwhile wouldn’t rule this out as long as it fits our strategy.

T R A D E F A I R S | 63

64 | T RA D E F A I R S

New security concepts for trade fairs in Germany Basic points of hygiene concepts and social distancing measures for minimising the risk of infection at the exhibition

ME A SURES WE HAVE TAKEN Reorganisation.

For instance, with adjusted capacity of people and areas, distance markings, increased staffing, transparent partition walls, information signs and visitor guidance systems.

Hand and surface disinfection. Numerous possibilities of hand disinfection placed throughout the exhibition centre: sanitiser dispensers located in entrances, halls, hall transitions and toilet facilities. Highly exposed surfaces will be regularly cleaned and disinfected.

Wide and open doors.

The doors will be wide open for you. Easy for you to enter – and leave: by separate entrances and exits.

Crowd management.

Stream of visitors is controlled at entry areas and within the halls by consistent crowd management to avoid a high concentration of people.

Your online ticket, please.

Admission tickets are exclusively sold online for each day. For you this means: no ticket counters, no cash payments. And for us: a constant eye on the number of visitors present.

First aid. Our medical service at every trade fair.

Highly skilled – and always ready to assist.

Safe distance. Ensuring enough distance so you can forego your face mask while seated, but don’t have to forego our exciting accompanying events.

WHAT YOU C AN DO Networking without physical contact. Even though you might be delighted at seeing other people again or closing a successful business deal – please forego shaking hands and physical contact.

Eyes wide open – mouth and nose closed.

Please wear a face mask (which you can remove outdoors and when seated) to protect all trade fair participants. And although you might not be able to see it, we are smiling at you behind our masks.

Still close up.

Keeping a minimum distance of 1.5 metre between all persons on the exhibition centres.

Cough and sneeze etiquette. For the sake of yourself and others, please sneeze or cough into the crook of your arm. Even better, do so while maintaining a distance of least one metre or turning away from other persons. Wash or sanitize your hands after each cough or sneeze.

BACK TO BUSINESS AT E XHIBITION STANDS More room to spread out. Whether at your exhibition stand, in ventilated conference cubicles without ceilings or throughout the entire exhibition centre.

Observance of strict sanitary rules on the exhibition centres. Especially frequent cleaning cycles for shared facilities and contact surfaces.

Deli food to go. Our catering partners in each exhibition hall offer tailor-made concepts in compliance with all safety and hygiene rules.

Networking in focus – according to new rules.

Always a good reason to celebrate the latest products presented in the exhibition area.

However, this time without stand parties.

You are welcome to take everything you are offered – without putting it back.

auma, Messe Düsseldorf, 08/2020

Ensuring as good air quality as possible.

Good aeration of entry areas, halls and conference rooms by modern ventilation installation.

Reducing the microorganisms in the air that we breathe.

Despite increasing numbers of infections, many German organisers are planning a re-start in autumn 2020 after the lockdown caused by the corona pandemic.

The federal states have so far signalled a thumbs-up in many cases and have specified rules for hygiene and social distancing. On this basis, the organisers have developed concepts for each trade fair individually in close cooperation with the responsible authorities in order to protect your health. The large-scale and modern exhibition centres in Germany offer good conditions for implementing these concepts.

Trade fair restart in Germany from September 2020 The recovery of the exhibition business is taking place in the same order as the pandemic affected the global exhibition market (first the Asian market, then the European market).

At the beginning of July 2020, the first trade fairs of German organisers were successfully held in China after the Corona break. All events were carried out in compliance with strict hygiene regulations, including the obligation to wear mouth and nose protection, and temperature measurements were carried out on the exhibition grounds.

Following the decision made by the government, and with a full compliance with the hygiene and distance rules, the trade fairs in Germany will take place again as real-life events from September 2020. Many exhibition organisers have developed new formats for this autumn with modified concepts and newly defined visitor target groups. Some of them will be held completely in a virtual way, some will be held on-site combined with a digital offer and same as an invite-only events, which will put a strict limit on the number of attendees.

Electronica China 2020

SEPTEMBER - DECEMBER 2020

TR ADE FAIR

INDUSTRY

NEXT DATE 2021-2022

SEPTEMBER 03 - 05 BERLIN NEW format

IFA The Global Innovations Show

CONSUMER ELECTRONICS, MULTIMEDIA

September 03 - 08, 2021

SEPTEMBER 04 - 13 DÜSSELDORF

CAR AVAN SALON DÜSSELDORF The World’s Largest Trade Fair for Motor Homes Und Caravans C AR AVAN-SALON.DE

VEHICLES, LEISURE, HOBBY, DIY, TOURISM

September 2021

SEPTEMBER 04 - 06 DÜSSELDORF

TOURNATUR The Outdoor Enthusiast’s Show for Destinations and Equipment, Hiking, Trekking, Discover Nature

OUTDOOR, SPORT, TOURISM

September 2021

B2B.IFA-BERLIN.COM

TOURNATUR.COM

SEPTEMBER 08 - 10 MUNICH NEW format

DIGITAL IFAT IMPACT BUSINESS SUMMIT World’s Leading Trade Fair for Water, Sewage, Waste and Raw Materials Management IFAT.DE

CITY SANITATION, WATER TECHNOLOGY, WASTE DISPOSAL, ENVIRONMENT PROTECTION

May 30 – June 30, 2022

OCTOBER 14 - 15 MUNICH NEW format

EXPO REAL HYBRID SUMMIT International Trade Fair for Property and Investment EXPORE AL.NE T

REAL ESTATE, INVESTMENT

October 2021

OCTOBER 19 - 22 MUNICH Postponement

ANALY TICA World’s Leading Trade Fair for Laboratory Technology, Analysis, Biotechnology and Analytica Conference ANALY TIC A.DE

LABORATORY TECHNOLOGY, BIOTECHNOLOGY

June 21 – 24, 2022

NOVEMBER 10 - 13 MUNICH

ELECTRONICA World’s Leading Trade Fair and Conference for Electronics ELEC TRONIC A.DE

ELECTRICAL ENGINEERING, ELECTRONICS, COMPONENTS

November 2022

NOVEMBER 16 - 19 DÜSSELDORF

MEDICA and COMPAMED World Forum for Medicine and International Trade Fair High Tech Solutions for Medical Technology

MEDICINE, IT MEDICINE, IT, HEALTH

November 2021

BOATS, BOAT ACCESSORIES, SPORTING GOODS

November 2021

METALWORKING, WELDING TECHNOLOGY, SUBCONTRACTING

December 2022

ENERGY

September 2022

METALWORKING, WELDING TECHNOLOGY

April 2022

COMPUTER-AIDED ENGINEERING, FACTORY AUTOMATION

June 2022

MEDIC A.DE / COMPAMED.DE

NOVEMBER 19 - 22 BERLIN

BOOT & FUN BERLIN The Whole World of Water Sports BOOT-BERLIN.DE

DECEMBER 01 - 03 DÜSSELDORF

VALVE WORLD EXPO International Valve Trade Fair and Conference VALV E WORLDEXPO.COM

DECEMBER 01 - 04 HAMBURG Postponement

WINDENERGY HAMBURG The Global On & Offshore Event

DECEMBER 07 - 11 DÜSSELDORF Postponement

TUBE and WIRE International Tube and Pipe Trade Fair International Wire and Cable Trade Fair

WINDENERGYHAMBURG.COM

TUBE.DE / WIRE.DE

DECEMBER 08 - 11 MUNICH Postponement

AUTOMATICA Leading Trade Fair for Smart Automation and Robotics AUTOMATIC A-MUNICH.COM

66 | A H K N E W M E M B E R S

SERVICE

SERVICE

Vecās Ostmalas Biznesa parks

MobillyTX SIA

Liepāja, Latvia Employees: 25 Inese Kurvina info@vobp.lv +371 25666472 Vecās Ostmalas Biznesa Parks - owner, developer and manager of a fast growing industrial business park in Latvia, city of Liepāja. We provide local and foreign Investors with the facilities needed to start or expand their business activities, as well as make available variety of support services for business establishment and operations. Development plan till 2023 includes building additional new production/ warehouse facilities in the 3,5 ha strategically located area in Liepaja, thus providing our TenantsInvestors with more than 17 500 m2 of production, warehouse and office space.

SERVICE

1NCE Latvia

Rīga, Latvia

Riga, Latvia

Valdis Bergs Tel.: +371 67777749 info@mobillytx.com www.mobillytx.com

Jans Jelinskis Tel.: +371 29990110 jans.jelinskis@1nce.com

MobillyTX is an advanced solution that helps state and municipal institutions to provide indirect social benefits to citizens. The transparent and automated system is completely protected from any kind of fraud or loss of funds, quickly prevents data leakage and ensures the anonymity of the recipient. MobillyTX provides social benefit solutions for services like public transport, school lunches, rent and utilities, food subsidies and medical services.

The innovative solutions of MobillyTX ensure more benefits for residents by using taxpayer funds more effectively, as well as transparency at all levels.

1NCE is the first IoT network carrier to offer fast, secure and reliable connectivity services at low cost based on an IoT flat rate. 1NCE cooperates with Deutsche Telekom AG as well as China Telecom Global Limited and supports all common mobile communications standards for almost worldwide connectivity. Besides direct sales, 1NCE offers its technology to mobile network operators via Platform-as-a-Service.

1NCE was founded in 2017 and has 100 staff in Cologne, Riga, Hamburg, London, Rome, Paris and Warsaw.

INDUSTRY

Hanza Via Baltic Riga, Latvia Alexander Seebold Tel.: +49 4284 92 685 0 mail@hansegrand.de hansegrand.com HanzaVia Baltic is a subsidiary of the HanseGrand sustainable building materials group from Germany. In the field of construction of paths and squares, restoration of historical parks and castles, and regarding expanded clay in foundation and substrates, nature is our main focus.

For over 30 years HanseGrand has been developing and producing water-bound road surfaces for a better environment. Innovative materials and nature-friendly in-house developments make the HanseGrand Group a renowned brand known for its sustainability and consistently high product quality. Based in Northern Germany, HanseGrand is active throughout Europe. Production and storage take place in more than 50 regional plants. This means short distances for customers and products, saves transport costs and has a much lower environmental impact than long delivery routes.

INDUSTRY

SIA Zieglera Mašīnbūve Daugavpils, Latvia Employees: 250 Olga Krušinska Tel.: +371 65404146 www.ziegler-gmbh.co / www.ziegler-harvesting.com SIA “Zieglera Mašīnbūve” is a large international manufacturing company that has been offering high quality products and services in the field of Mechanical Engineering (Metalworking) and Automotive Engineering for 22 years already. The company is constantly and successfully developing in both fields of its activity.

ZIEGLER has been a world market leader in the production of various agricultural machines for many years. The company’s product range includes: electric and hydraulic rapeseed side knives and headers, rapeseed tables suitable for most combine brands, header transport trailers, corn harvesting headers, sunflower harvesting headers, pick-up-systems (swath harvesting), soil cultivators.

A H K N E W M E M B E R S | 67

SERVICE

Brandu MB

Munava UAB CarePoint

We help our clients to meet all communication needs. We develop digital products – websites, e-shops. Also, we manage social media accounts and online advertising. We create various types of content - articles, press releases, social media content and visuals. We are ready to help with strategic communication, marketing, and branding issues.

EMUS UAB

Kaunas, Lithuania Employees: 7

Lithuania Employees: 5 Mangirdas Matusevičius Tel.: +370 662 23606 mangirdas@brandu.lt www.brandu.lt

INDUSTRY

SERVICE

Vilnius, Lithuania Employees: 17

Arūnas Samochinas Tel.: 370 640 04415 sales@carepoint.lt www.carepoint.lt CarePoint provides personal protection and hygienic products in a simpler way.

A unique solution - personal health, safety, and care tools at one point.

CarePoint sales stand and vending machines are available to visitors in the shopping malls, airports, events, or other public spaces. We can feel living safely in our daily lives. CarePoint sales stand and vending machines can contain the following products: disinfectant liquid, surgical mask, antibacterial wipes, dispenser, respirators, gloves, face shield, disinfectant gel, wet wipes, thermometer, patches.

SERVICE

VTG Project Logistics UAB

Mindaugas Milašauskas Tel.: +370 686 45554 sales@emusbms.com www.emusbms.com EMUS main area of activity and expertise is all about adapting lithium chemistry batteries for use and safe operation in wide range of different applications – we produce intelligent and highly flexible lithium battery management systems, that are applicable almost anywhere, starting from small, mass produced electric vehicles, scooters, drones ending with large projects, such as maritime industry or extremely high capacity backup power supplies or grid stabilization devices.

SERVICE

“Lietuvos ryto” spaustuvė UAB

Klaipėda, Lithuania Employees: 5

Vilnius, Lithuania Employees: 233

Violeta Vlasovienė Tel: +370 656 65932 violeta.vlasoviene@vtg.com www.vtg.de

Paulius Vižinis Tel: +370 5 274 3743 print@lrytas.lt print.lrytas.lt

VTG Project Logistics Baltics is part of VTG AG, the largest private rail car company and one of the leading logistics service companies in Europe: • Offices at strategic logistical locations, door-to-door service • The most optimal freight transport solutions – by truck / rail / water transport • Experts for over size goods – preparation / approval of drawings / load fastening • Transport of liquid / hazardous, bulk goods, general cargo and storage • Tank container logistics • Representation in the Baltic States • Deliveries from Western to Central and Eastern Europe, Asian countries and vice versa!

The company’s credo is the careful design of shipping and logistics solutions!

“Lietuvos rytas” printing house, JSC (RYTAS PRINT) is one of the largest and most advanced offset printing houses in Central Europe. About 65 million Euro were invested in the modernization and quality management of the printing house and now we can offer our clients quality printing in medium and high volumes at highly competitive prices within the shortest possible time period. Over 50% of our production are exported to the Western, Scandinavian and Eastern countries. Our key principles of long-term partnership are premium quality, strict adherence to the agreed dates and attention to each project. We offer our Customers a wide range of printing services: catalogues, magazines, brochures, flyers and promotional publications. We are proud to be a socially responsible and environmentally friendly company (we hold FSC, PEFC, Nordic Ecolabel certificates).

68 | EVENTS Photo: Līva Melbārzde

First digital AHK regional assembly and annual meeting The first virtual General Assembly 2020 of the German-Baltic Chamber of Commerce in Estonia, Latvia, Lithuania (AHK) was held on 18 June. During the general meeting, the results of the year 2019 and the current situation were evaluated.

Thomas Schöllkopf, who was President of the German-Baltic Chamber of Commerce for 9 years, was elected an honorary member.

The AHK currently has more than 420 members in the Baltic states, of whom more than 20 are new members who joined this year.

Christopher Zimmer, General Sales Manager at Lufthansa Passenger Airlines and President of the German-Baltic Chamber of Commerce, was elected to the Board of the German-Baltic Chamber of Commerce.

Theis Klauberg, Partner at Klauberg BALTICS, has resigned from the Board after the maximum possible term of office expired.

Clean hands are always important, Florian Schröder, the CEO of AHK, before starting the virtual assembly

Keeping up healthy habits in the „new normal“ AHK office life

We also want to congratulate our elected Board members in Latvia • Lada Kalinina, Dr. oec., General Manager Baltic States, Jungheinrich Lift Truck Corp, • Aleksis Karlsons, CEO Hotel Bergs and • Reinhold Schneider, CEO at SCHWENK Latvija During the general meeting, an innovation was also presented: the AHK members app, which is unique in its extensive functionality in the network of German chambers of commerce abroad. The app is an important milestone in the digitization of the German-Baltic Chamber of Commerce, making a range of innovative options available to members. LM

Māris Balčūns, Head of the Office in Latvia, AHK

SUP OORTED BY

On 15 August, Vilnius celebrated a fun German holiday weekend filled with music, dancing and delicious traditional food! Moreover, our Lithuanian office hosted the first AHK football match at Lukiškių Square. AHK member companies bnt attorneys in CEE, Hegelmann Group, UAB saugos tarnyba “Argus” and Layher, Inc. competed in the 3x3 mini tournaments. Despite the heat, our teams were eager to battle for victory. Congratulations to the winning team from the Hegelmann Group. We had an amazing day with motivated players, a great team spirit and supportive fans.

Our German sporting event was supported by the principal sponsor Berlin Chemie Menarini. Sponsoring partners include the Hegelmann Group; Layher, Inc. and the Deutsch-Litauische Fußball-Freundschaft e.V. The winning prizes were sponsored by Sixt and Fielmann, while refreshments were sponsored by Lidl. MW

Team UAB saugos tarnyba Argus

Team bnt attorneys in CEE vs. Team Layher Baltic, UAB

Winner Team Hegelmann Group

Photo: Rimantas Matulionis

AHK Football Match at the German Weekend in Vilnius

70 | C U LT U R E

Building the future on the past To be or not to be – to demolish or restore. This dilemma often comes into play with historical buildings and, in particular, with wooden houses. For the renowned Latvian architect Zaiga Gaile, the answer is clear: heritage has to be preserved and cultivated. Baltic Business Quarterly talked to the creative mind who has rescued many of Latvia’s wooden structures and is the woman behind many successful restoration projects.

by ALE X ANDER WEL SCHER

h

ow you would describe the general attitude in Latvia towards old wooden houses?

Wood is our traditional and local natural material. All our farmsteads in the countryside were made out of timber and it was also later a common building material in Riga – and remained so for longer than in other European cities. So our heritage consists mostly of wooden buildings.

Additionally, because of their density and quality, UNESCO has included Riga’s historical centre, among other places, on its World Heritage list.

Still, many people have a reserved attitude towards the wooden houses – this cannot be denied.

Where do these reservations arise from?

There are several reasons but the main one is that renovating a wooden building is not cheap but rather expensive. It is more profitable to build a new house in the centre and sell or rent apartments instead of renovating a wooden house that is small and not large at all. But we are moving forward – there has been a noticeable shift in the attitude in the last 20 years. The preservation of wooden houses is progressing, and support mechanisms and financing options are developing.

As a result, there are much more people who now take this seriously than there were two decades ago.

How did this change of mindset come about?

Things started to change when representatives of the international heritage protection organisation Europa Nostra visited Riga in 2000. Soon afterwards, the Latvia Nostra foundation was established, which organized the Europa Nostra international conference in Riga in 2001 that adopted the Declaration on the Preservation of Wooden Heritage.

This was the breaking and turning point for us because someone from the outside told us that we have a rich heritage of high-quality wooden houses. And suddenly everybody talked about it and the public became interested in the topic. It was also at this time that the book “Koka Rīga” (Wooden Riga) came out. Both things were a very big success.

Riga still continues to be much more well-known for its Art Nouveau buildings. Does the wooden architecture get the appreciation it deserves?

People value and evaluate it nowadays. Take Āgenskalns as an example. 25 years ago, people would simply demolish the old building and build a new house. This is, of course, not possible anymore because of the protection laws. But at the same time, the present wooden houses are also extremely popular - you hardly get

one anymore. People want to buy and renovate them. Why? Because the area is ideal and clean – it is a kind of garden city. All houses have these small gardens on a very human scale. Most of them do not have high floors and are not higher than two storeys. And they are made out of wood – it is a natural material that is coming back more and more.

Is this trend also related to the changes in the way of living?

Absolutely. It is part of the green lifestyle. People have become more ecological and environmentallyaware, and try to reduce their carbon footprint. They aim to buy and eat local things, want to be healthy and live long. And think about their children and grandchildren.

The wooden house is also in this chain – and it is the best kind of place that people can live in. It is healthy, it breathes and it is highly sustainable. Nowadays, you can live in an old wooden house with a very high level of comfort. And if you are able to join and combine the semantics, atmosphere and scale of the historical house with contemporary living solutions, then it is an ideal house. It only needs some care and attention. But from the point of sustainability, this is a long-term investment – and another level of quality of life.

B LO C KC H A I N I N T H E B ACLT U LT I CU S R| E71| 71

Architect Zaiga Gaile stands on the wooden staircase in her office in the only wooden building in Berga bazārs in Riga

Photo: Arina Solntzeff

So everybody should live in a wooden house?

It is always your own choice how you want to live your life.

What is your motivation for preserving them?

It is my sense of life. I simply love old houses. We also do new projects but I mainly concentrate on the heritage aspect. For me, it is so interesting and so exciting when I have to re-plan old buildings and adapt them to modern needs. I love making this combination work and thinking about how to keep the structure of the house and its atmosphere and feeling, and then bring it to our times. I really enjoy this process of reflecting on how we can live and build the future on the past.

Other architects seem not to have so much affection for old houses Perhaps one must ask to what extent architects are willing to deal with the renovation of the old houses and especially with wooden ones.

In Latvia, in general, only a small number of architects want to deal with them and instead prefer to build new ones. Because new houses are built according to the new standards with new materials and a new philosophy. On the other hand, if you deal with the old buildings, you have to get really involved with them, get to know the history of the architecture and all about their technical condition before being able to understand what is good about the building, what is bad, what is valuable and what is not, what

problems there are and how can they be solved. This is very difficult.

It sounds like a lot of work.

Indeed, it is a lot of work but it is so exciting. You study life through these houses. You know who has lived there and how they have lived.

Nowadays, we sometimes think that it is hard to live. But when we look back: In Āgenskalns and Pārdaugava, people lived like in the Middle Ages – including me. I lived in such a wooden house up to the age of 18.

We had a dry toilet, for which we had to go one floor down. And we also did not have a bathroom. Every morning my parents had to bring wood from the courtyard for the heating. And some people are still living like that in these old houses. But anyway –

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PASSIONATE PRESERVATIONIST Zaiga Gaile is one of the most renowned Latvian architects and has specialized in the restoration of historical buildings. The 69 year-old expert has brought many shabby houses back to life by skilfully merging both the old and the new. By adapting the historic architecture to the needs and requirements of functionality and modern lifestyle, she always tries to restore the former attractiveness while finding a modern touch. Although this approach is not favoured by other professional renovators or strict advocates of the Venice Charter for the conservation and restoration of historic buildings, her design work nevertheless most often results in a harmonious and visually appealing living environment.

For her works, she has received much praise: Gaile is the winner of the Latvian Great Architecture Award, several Latvian Architecture Awards, and many other Latvian and international awards. Among her most well-known restoration projects are the Bergs Bazaar in Riga, the wooden homes on Ķīpsala Island, the “Gypsum Factory” residential block and the “Easter Island” weekend home in Kaltene. Some of her most recent on-going renovation projects include the reconstruction of the New Riga Theatre (JRT) building and the Wagner Theatre in Riga.

these are good memories. Because wooden houses naturally always come to my mind when I think of a home.

How do you start and proceed with the renovation?

The first step is photo fixation – to document how the house looks in its current condition. Then we go through the archives to get the original plan of the house. We are also looking for information about the former owner and old pictures of the building. We want to get an idea of when it was built and to evaluate as many details as possible,

such as what the window frames, doors, stairways, shutters and so on were like. Based on these studies, we develop a plan for the existing structure. For example, that is how we set it up for our own office in the only wooden building in Berga bazārs.

Do you try to stick to the original as much as possible?

Yes. But unfortunately this is not always possible. Sometimes the houses are in extremely poor condition. Then it is better to partly demolish the building rather

than keep it. We did this in Ķīpsala, for example. We demolished some of the houses and then built it back on and even moved several houses from the city centre to there.

Do you consider this a legitimate way to deal with the heritage?

Yes, because sometimes I think I cannot build it better than what has already been done. It is not because I do not have ideas, but people should not lose their landmarks and their memories.

Paradoxically, we saved the wooden houses during the Soviet times, while in Western countries whole areas were demolished during the wave of modernism in the 1960s and 1970s.

Still, our heritage became particularly threatened after the restoration of independence in the 1990s and later on as well. The construction boom wanted to sweep away all the old wooden houses but we managed to avoid that and keep them.

Which phase of the renovation process is the most rewarding?

The best thing is seeing when the plans become reality and have served their purpose. Renovating a wooden house in poor condition often proves to be a challenge, but in the end, it is always worth the effort.

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Wooden wonders Latvia has a long tradition of building houses from natural resources.

The wooden architecture is preserved in abundance in Riga, but has withstood several hard periods elsewhere in the country. Many beautiful wooden houses can still be admired in their original setting.

by ALEXANDER WELSCHER

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eople used wood to build houses for a long time in Latvia. Large forests and easy access to timber made wood a common building material in Riga and it was still used in the late 19th and

early 20th centuries. Despite the destruction brought about by two world wars and decades of neglect during the Soviet era, Latvia’s capital is still home to a large number of wooden houses. About 4,000 of them are dotted around different parts of the Baltic metropolis – more than in any other European city.

Indeed, some fine examples of the wood-based architectural heritage have also remained in other areas and towns throughout Latvia.

Scattered throughout Riga, the wooden houses are an essential feature of the cityscape. Around 500 alone are located in the historic

Many years of history and a variety

Photo: Arina Solntzeff

centre, with the largest number of them dating back to the 19th century. Most of the other original wooden buildings were burned in the fire of 1812 – a tragic episode in the history of the city. To thwart an attack by Napoleon’s troops which did not materialise, the wooden suburbs around the fortified medieval old town were burned down – only a handful of buildings survived the flames. A wooden city was rebuilt on the ruins.

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C U LT U R E | 75 Ungurmuiža Manor – an unique ensemble of wooden architecture from the 18th century

capital. Restored and brought back to life around 15 years ago ahead of the NATO summit in Riga, the neighbourhood has become a hotspot of culture and entertainment – with a very popular organic food and crafts market, festivals and other outdoor events such as concerts and film nights in a courtyard around a historic set of wooden houses. The suburban cultural space managed to attract like-minded people that developed, renovated and popularized the area further - it now has become a symbol of the renewal of wooden architecture in Riga.

of different styles, from baroque to classicism and historicism, and though to art nouveau, are visible in the wooden architecture of Riga. A stroll through the city is a rewarding one for discovering the most beautiful buildings in residential areas such as Ķīpsala, Āgenskalns, Grīziņkalns and Maskavas Forštate.

While some houses still stand empty and sadly neglected, many others have been restored to their original beauty or are under reconstruction.

Renovations nowadays are often

carried out lavishly with care and precision according to the original plans – to make sure that the building fits into its surrounding context and environment.

Wooden suburbia

The most frequently mentioned showcase project is the so-called Kalnciema Quarter, an ensemble of renovated wooden houses along the main road that acts as a gateway between Riga International Airport and the historic centre of the

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The Kalnciema Quarter is part of a larger historical area - the village of Āgenskalns that was founded in the 17th century on the left bank of the Daugava River. This part of Riga – known as Pārdaugava in Latvian, which translated literally means ‘Over the Daugava’ – has retained a unique atmosphere created by the charming architecture of its wooden residences. Other examples of this unique heritage, which has been recognized by UNESCO, can be explored on Ķīpsala, a former fishing village and now the central island on the Daugava. In these two parts of the city – historically known in German as Kiepenholm and Hagensberg – many carpenters and woodworkers have expressed their art in the buildings. Their splendour is particularly visible in

the original features and intricate details such as doors, window frames and fine carvings.

additions and a few even have been moved there from the centre of Riga to save them from destruction.

Ķīpsala, in particular, has developed into an exclusive residential district and desirable place to live in. The waterfront side with a breathtaking view of Old Riga was given a new lease of life by the architect Zaiga Gaile and her husband, the businessman and former Latvian Prime Minister Māris Gailis. In 1997, the couple built a house for themselves and subsequently took care of the surrounding wooden buildings. “We started with five houses and over the years have renovated 18 houses”, Gaile explains proudly. Some of them have been restored to their original appearance, others are complemented by modern

However, the wave of renovations has not yet reached all the buildings in Pārdaugava. Still in need of renovation are many wooden manor houses - suburban residences of wealthy Rigans that served as summerhouses and domiciles for social events. The wooden estates had their heyday between the second half of the 18th century and the middle of the 19th century.

Riga at the time was a “wooden metropolis with a stone heart – the old town”, as the architect and historian Pēteris Blūms once praised the city. Back then, there were around 12,000 wooden buildings in the suburbs of Riga.

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ARCHITECTURAL CULTURE STORIES From 24 to 27 September, the European Heritage Days will take place in Latvia, the subject of which is architectural culture this year. The National Heritage Board has compiled more than 30 examples with valuable history, construction and restoration. Latvian Public Broadcasting LSM will present these sites on its news portal both in Latvian and English, as told by Latvian architectural and cultural heritage experts. Among them are also stories about the history behind some of the wooden architecture gems of Latvia.

Wooden worker buildings and postcard settings

Back on the other side of the Daugava, the former working-class neighbourhood of Grīziņkalns also features many predominantly twostorey wooden buildings – both renovated ones as well as buildings in dire need of repair. Amid the narrow cobblestones of the once working-class area, where many

of the revolts during 1905 started and spread all around the city, two restored houses make up the Wooden Riga restoration centre “Koka Riga”.

Dedicated to the renovation of wooden buildings, it provides advice on renovating and maintaining wooden buildings, and regularly hosts exhibitions, workshops and seminars. Similar practical insights and information about how wooden houses can be restored can also be gained at the Wooden Architecture Centre in the Kalnciems Quarter.

It also offers guided tours of the wooden architecture in Pārdaugava.

Photo: Adas Vasiliauskas

The emotional and aesthetic value of wooden architecture can be experienced outside Riga too.

Visitors to Jūrmala will not only be impressed by the region’s long, white,

sandy beaches and pine forests of the so-called Baltic Riviera, but also by the hundreds of elaborately decorated old wooden houses nestled between the trees. Many of them have carved facades with decorated gables and verandas with stainedglass windows. Worth a trip is also a visit to western Latvia to the scenic town of Kuldīga. Historically known as Goldingen, the atmospheric old town of the postcard city on the Venta river is an architectural gem with many restored wooden and timber houses. Another place to have stood the test of time is also Ungurmuiža Manor – an unique ensemble of wooden architecture from the 18th century around the only baroque-era wooden manor house still standing in Latvia. Enjoy wooden architecture at its best!

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Feel the forest vibe Covered with vast forests, Estonia, Latvia and Lithuania have much to offer to anyone looking for sustainable outdoor adventures.

Still, many people are opting for the simple solution: hiking in the deep green. Here is our guide to three unique destinations in the Baltics that allow you to immerse yourself in the forest.

by ALEXANDER WELSCHER

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ature became one of the safest places to spend holidays after the outbreak of the Covid-19 pandemic, and Estonia, Latvia and Lithuania are perfect for that. Many people in the Baltics have been taking to nearby woodlands at weekends to walk in local recreation areas and enjoy the beauty of the forests. Nature trails can be found in all corners of the Baltics for both short and long walks, and to spend time in the fresh air and get closer to nature. Visitors will be pleasantly surprised by a variety of unique and fascinating objects on the way

through their forests that become even more stunning during autumn when the leaves change colour.

For those who love walking in the woods and enjoying nature, Baltic Business Quarterly presents three options to explore the Baltic forest green in all its depth and glory. But be aware: when wandering around the forests you might not be alone, since autumn is the season for a national obsession in the Baltics – picking mushrooms and berries. And make sure you pack rainproof jackets and comfortable sweaters since there is no guarantee that the bright, warm autumn sun will come out. Autumn in the Baltics can be a fickle thing!

ESTONIA: Listen to the sounds of nature Estonia’s forests already offer a magnifying richness of natural sounds. But deep in the forests of the Pähni Nature Centre in Võrumaa near the Latvian border, the peaceful symphony is enhanced even further by a trio of giant wooden megaphones. Each of them is placed at such a distance and angle that, in the middle of their directional cones, the sound feed from all three directions creates a unique merged surround sound effect. “It’s a place to listen and to browse the audible book of nature”, says the Estonian semiotician and popular author Valdur Mikita who has written at length about the ways Estonians are indigenously bound to the forest.

The three metres diameter gramophone-like constructions not only turn up nature’s volume, but are also large enough to climb inside and sit or lie down in – to contemplate and rest the feet and mind. “I believe that the biggest value of the megaphones is listening to your own thoughts via the sounds of nature”, says Hannes Praks of the Interior Architecture Department of the Estonian Academy of Arts.

Together with a group of students, he was responsible for creating the mammoth timber funnels.

LATVIA: Enjoy the autumn leaf colours

Amplifying the sounds of silence: Giant timber megaphones in the Estonian forest in Võrumaa

Autumn is one of the best times to visit Gauja National Park, which is located about a 1.5-hour drive away from Riga and a popular daytrip destination during the Indian summer. There are many nice spots, but Sigulda and the surrounding area is the most favoured destination when nature shows its most colourful side. There is a well-tended trail that weaves through the nature reserve,

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Photo: Tõnu Tunnel, Sigulda Municipality Council, Anykščiai Regional Park

Aerial view of the beautiful autumn forest in the Gauja National park in Latvia

taking visitors through unspoiled forest. Enjoy the impressive colour change of trees, grass and other vegetation in the woods, when the golden yellow and red leaves of birches, oaks and maples contrast with the dark-green pines and fir trees. It happens only once a year, so try not to miss out on the magical spectacle of nature.

The majestic scenery can also be seen from above: The main tower of the Turaida stone castle rises high over the meandering Gauja River and offers breath-taking views of the ancient valley, which is steeped in myths and legends. Other panoramic views can be enjoyed from atop

the Sigulda Ferris wheel and the little yellow cable car that crosses the valley and connects Sigulda to Krimulda. Located north of the city, along the course of the Gauja River, is another great viewpoint to enjoy the autumn marvel of Paradise Hill.

It is also known as Painters Hill, as many prominent Latvian artists have painted the scenic landscapes that can be seen from the hilltop.

LITHUANIA: Walk on top of the forest Walking through the tops of pines, oaks, spruces, birches, rowans, maples, and trembling aspens might be one of the best ways to

Watch the trees like a bird would from the Anykščiai treetop walkway in Lithuania

experience the forest. The Anykščiai treetop walkway was opened in 2015 and became the first of its kind in the Baltic states. Stretching for around 300 metres through a fairy-tale national park situated about a 1.5-hour drive from Vilnius, the walking path rises steadily at first and then continues along the treetops. It reaches an altitude of 21 metres above ground level, ending at a 34-metre high watchtower with an observation deck that provides information about the surrounding countryside – a picturesque valley alongside a river stretching through the reserve.

The unique complex is well located in the midst of a beautiful evergreen pinewood forest that has a huge significance in Lithuanian literature – and has become a source of inspiration for many writers and authors. “Where am I – in a wood or Paradise?”, the poet Antanas Baranauskas asked in his famous work “The Forest of Anykščiai” which glorified the beauty of the forest. Published in 1861, the legendary verses of the classic landmark poem vividly describe the colours, sounds and scent of the woods as well as the calm and peace of the tranquil reserve that those who are afraid of heights can also experience.

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by LĪVA MELBĀRZDE

A place, where time stops Forest SPA dispels the myth that in Latvia forests only serve for timber extraction and export.

The forest has a rejuvenating effect on people, strengthens health and allows you to recover on a daily basis with the help of special procedures.

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ath master Mareks Liepa and his family moved from Rīga to Jūrkalne several years ago, but began the foundation of their Forest SPA last year. Currently the SPA center includes three log cabins for guests, two bath houses – the Latvian traditional bath house and gypsy bath house, two ponds enriched with blue clay and two heated hot tubs under the sky of a million stars. However, the plans of the bathhouse host are even more extensive – it is planned to build at least one more guest holiday cabin, so that if necessary, a large group of up to 16 people can stay in the complex. Mareks Liepa would also like to build another separate bath house building, where along with the bath house procedures therapeutic baths would also be available – both turpentine baths and baths of various medicinal plants picked in the Latvian forests and meadows, also providing a separate room for massages. A special dream also involves the construction of an actual black or smoke bath house of the Suiti region, as no such bath house has remained in this region. “The black bath house has its own science – the oven in it is located below the

floor level, so that the heat is distributed evenly. The sweating shelves are low and long. Above each shelf there are ventilation hatches in the walls that open during heating, so that where a person sleeps, he or she can always breathe fresh air during the procedure. This provides an entirely different experience of senses than in other saunas. I have also read that according to virologists, the black bath house is the most sterile environment possible. I would very much like to include this ethnographic element in my Forest SPA story, as everything here is based on the knowledge of healing and nature inherited from our ancestors to help people regain inner peace, well-being and health,” Mareks Liepa says about his mission.

In the very heart of the forest The concept of Forest SPA is dominated by three Latvian plants – juniper, sand verbena and Myrica gale, which is a red-leafed shrub growing only in the swamp and is the strongest analgesic found in Latvian nature with a distinctively calming effect. “I use herbs a lot in the bath house and each of them has its own energy and purpose. The bath house itself helps to release stress from the body, when a person is at

rest – my goal is to use the knowledge of our ancestors to make this process of restarting and recreation even deeper and more thorough,” says Mareks Liepa, who has been working as the bath master for more than 10 years and in his SPA also welcomes experts of medicinal herbs, who organise master classes on the use of natural superfoods in consumption and healing. “And there is no place better for doing it, where everything is surrounded by nature itself, sharing its riches,” emphasises Mareks Liepa, whose SPA center is located right in the middle of the forest – the closest neighbours live 1.5 km away, but the sea can be reached on foot.

Vision of a glamping village “Of course the sea is a huge added value here. For example, I currently use amber in massages, but it can also be used in saunas and therapeutic baths. The molecular structure of amber is identical to the structure of our bones, thus amber helps to regenerate cells, while the essence of amber can also be used orally within a regular course,” explains Mareks Liepa, emphasising that his SPA center is guided by the elements of four Latvian seasons. “In autumn I use seaweed in bath house procedures, which helps to remove toxins from the body during the sauna procedures.

Blue clay, which can be found in several places on the steep bank of Jūrkalne, also has positive cosmetic effects. One of the

strongest natural elements of Latvia are conifers – spruce, pine and juniper. I use them more in winter steaming treatments, applying both to the sweating shelves and the body – the vibrations created by conifers are truly powerful and completely switch the sensory system of the body,” explains the bath master.

“We sometimes reach such moments, when we have completely exhausted ourselves and can no longer give anything to others. Then we have to go somewhere, where time stops and where we can find our inner balance. The forest protects people and includes them in its natural vibrations; here time stops, and problems fade away,” says Mareks Liepa, adding that even Tibetan monks go to Jūrkalne to engage in their silent meditations. “Once there were about 5000 people living in Jūrkalne, now there are not even 400 left. In the forest, near Forest SPA, one or more glamping villages could be established, that the city residents could visit to enjoy some rest, and during the rest of the time the cabins could be maintained and managed, and at the request of the owners could be rented, thus providing passive income. This is a popular concept in Scandinavia and with the support of investors it could be implemented in Jūrkalne as well. In any case, all the prerequisites for complete rest are already here,” says M. Liepa, outlining the future potential.

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