Due to historical traditions, Latvia has a strong manufacturing base in fine chemicals and pharmaceuticals, making a wide range of products, ranging from petrochemicals and man-made fibres to paints and household chemicals. Latvia was the principal location for these sectors in the former Soviet Union, with 25 % of all new Soviet drug technology designed here. One out of every four medical preparations manufactured in the former USSR and intended for the USSR market was actually made in Latvia.

Existing and extensive R&D bases and a good cooperation between industry and scientific sectors  currently covers the following spheres of research: microbiological synthesis, wood chemistry, virology, synthesis of physiologically active substances, bioorganic chemistry, molecular biology, genetics, biotechnology, biomechanics, magneto-biology, and others.

Manufacturing and design of biotechnological equipment is also prevalent. Furthermore, Latvia is becoming recognized internationally for its CRO (Contract Research Organization) activities.

The chemical and pharmaceutical sector places 4th position according to turnover among manufacturing industries (8.3 % in 2018), 5th place among other industries by number of employees (7.2 % in 2018), and 5th place by share of export in sector sales (76.8 % in 2018). According to data from the Central Statistical Bureau, the sector included  approximately 500 companies in 2018.