Germany ‒ the Biggest Investor in Kaunas: Between Achievements and Opportunities
Photo: A. Aleksandravičius.
Germany is one of the most important and biggest investors in Kaunas: discussions about the success of German capital old-timers and giant newcomers operating in Kaunas, the challenges, opportunities, and lessons of Kaunas companies working closely with Germany took place in the forum called “Lippe region and Kaunas: business relations and future prospects” during the first-time event in Kaunas “German Days”.
Currently, foreign direct investment of Germany in Kaunas is 23% and outpaces the Netherlands (22%), Finland (19%) and Sweden (10%) almost twice. Especially successful and record-breaking year in terms of German investments in Kaunas were 2017: the arrival of such giants as “Continental” and “Hella” put even greater emphasis on the fact that good infrastructure, competitive salaries, the similar mentality of local employees to those from Germany and the supply of skilled specialists become the decisive argument for business in this country when choosing the location for investment.
Not only in Kaunas but also in Lithuania as a whole, Germany is one of the main markets and the contacts with it are constantly growing. According to the data of 2018, Germany is ranked third in terms of foreign direct investment in Lithuania, and it is the most important market for Lithuanian export.
Old-timers and giant newcomers support the city
According to Andrius Veršinskas, Chief Project Manager of “Kaunas IN” Business Division, the fact that German businesses investing in Kaunas are focused on industry and manufacturing is not surprising: Kaunas is the leading city in Lithuania in the field of engineering and industry. Even the service centers established in Kaunas are often dedicated to industrial enterprises. As one of the most striking examples, he mentions “Festo”, a German industrial control and automation company, that has been operating in Kaunas for almost three decades. The Kaunas division is an internal service center working in sales, order management, business assistance, accounting, IT and engineering and collaborating with colleagues in other countries.
“We notice that German capital companies such as “Hegelmann Transporte” or “Festo” which have been operating in Kaunas for a long time associate their success with the city and the opportunities it offers. They feel as a part of the city and actively support Kaunas. The growth stories of these companies inspire and encourage other German investors”, says A. Veršinskas and emphasizes the importance of new big investors for the region and future investments. “After the arrival of such giants as “Continental” and “Hella”, we can place Kaunas on a different level because such investors give the highest mark of reliability and quality. Moreover, large companies naturally attract potential subcontractors and sub-suppliers, which gives credibility and legitimacy to the entire local market.”
From Kaunas to Germany and the whole world
On September 20 in Kaunas, the German-Baltic Chamber of Commerce (AHK) together with VšĮ “Kaunas IN” and Kaunas city municipality organized a business forum “Lippe region and Kaunas: business relations and future prospects” as part of the “German Days” program, commemorating the thirtieth anniversary of the cooperation between Kaunas and the German Lippe district.
The new forum was divided into a discussion of two directions: first, German investors coming to Kaunas, their attitudes, experiences, and success stories; second, Lithuanian businesses cooperating and trading with Germany.
According to the Head of Business Development at “NFQ Technologies” Tadas Četkauskas, who participated in the discussion, a German digital innovation company NFQ has been operating in Lithuania for 17 years and, currently, is one of the largest software services providers in Kaunas with 350 employees here and almost 600 worldwide. In Kaunas, there is the headquarters of the company from which all other divisions in Germany and Southeast Asia – Vietnam and Singapore – are managed. Thanks to software developed by Kaunas and other employees of the company, businesses generate billions of US dollars in revenue worldwide. “Business contacts with Germany are very important to us, and our business model is export-oriented: we derive more than 90 percent of our revenue from this branch, and Germany is our No. 1 market,” said T. Četkauskas.
Meanwhile, when sharing his long experience, Antanas Vizgaitis, the director of the company “Selteka” that works closely with the German market, says that contact with the Germans had taught him the key lessons: “If we don’t think about efficiency and productivity, we’ll be destined to repeat failures.”
Speaking about the peculiarities of working in the German market, A. Vizgaitis also mentioned his fascination with German precision which disciplines and can be seen everywhere: from communication to planning, documentation or fulfillment of obligations.
“How to make useful business contacts in Germany? In our experience, personal contacts and acquaintances are the most important. The second-best way to make contacts is through business organizations, and the third – during business exhibitions,” said the director of “Selteka”.