City focus - Daugavpils on the move

Latvia has so many promising locations to offer investors, not just Riga, so starting with this edition of the Newsletter we are going to explore other promising destinations in Latvia. This month we look at Daugavpils, the pearl of Eastern Latvia.

History of the city

Daugavpils is the second largest city in Latvia, with a population of 100,000 people. It is situated in the south-eastern Latvia region of Latgale on the banks of Daugava River, the largest river in Latvia. The beginnings of Daugavpils are associated with the Daugava trade route, which for several centuries was one of the most important trade routes in Eastern Europe. The city has had a dramatic history, and its name has been changed several times. In the past the city has been known as a Dunaburg, Borisoglebsk and Dvinska, before finally receiving the Latvian name Daugavpils in 1920.

Location advantages

As the largest industrial city and transport hub in eastern Latvia, Daugavpils offers excellent links to the capital, Riga, as well as other Latvian towns. Daugavpils is located approximately 230 km south-east of the capital Riga. It is also close to strategically important towns in Lithuania, Belarus and Russia and is only 30km from the Belarussian and Lithuanian borders. Russia is also close with the border only 120 km away.

With this ideal location it is no surprise that Daugavpils has become a network hub. Not only is it located on a major railway junction in the south-east of Latvia providing railway connections with Riga, Moscow, St. Petersburg and the Lithuanian capital Vilnius, but it also lies at the crossroads of a number of internationally significant highways. These transport corridors join St.Petersburg to Warsaw and Jekabpils to Vitebsk. The city also boasts excellent local road networks linking Daugavpils to Lithuania, Belarus and Russia. Its most recent asset is the airport located just 15 km from Daugavpils city centre. A target for both local and national investment, work has begun to upgrade the airport to an international airport with flights to all the major European airports.

Manufacturing traditions and the business environment

Its Industrial traditions go back to the beginning of the 19th century when Daugavpils emerged as a centre for small-scale manufacturing. Since then a number of prominent industries have flourished including metalworking, food manufacture and railway servicing. Approximately 2000 businesses are operating in the city including a number of important foreign companies such as Ziegler, Axon Cable, Nexis Fiber, Malung Industries and others. There is a wide spectrum of industrial activity within the city, with 40 % of the city’s production exported to Western countries and 30% to CIS countries. In addition, virtually all the main Latvian commercial banks have branches in Daugavpils.

There were some serious investors (above-mentioned Ziegler, Axon Cable and Nexis Fiber as well as investors from Russia, Ukraine, Belarus and Lithuania) who have entered the city recently and helped to preserve the heavy industry there by introducing new technologies in their factories. In addition to a skilled workforce, it should also be mentioned that there is more than 200 000 m2 of industrial space available for any type of production, most of which is private and is ready for rent or sale.

Some other trends of Daugavpils economic development are also clear; fast growing companies from Riga have began to transfer their production, services and shops to Daugavpils, opening new factories with modern machinery, new supermarkets with a vast assortment of goods and high quality services. One of the possibilities we see for Daugavpils is the development of tourism, especially after the completion of the renovation of Daugavpils fortress, a unique tourist destination, and after the completion of Daugavpils airport.

International recognition by The Financial Times

The Financial Times business periodical, the FDI magazine, in a recent survey “European Cities & Regions of the Future 2006/2007” placed Daugavpils among the most favourable business destinations in Europe. Daugavpils was specifically named as Joint Runner-Up in two categories - “European City with Best Economic Potential 2006/2007” and “Most Cost Effective European City 2006/2007”.

Plans for Daugavpils International Airport, Latvia

As part of the Latvian transport infrastructure development program for 2007-2013, plans were made to develop regional airports and transport links. The airfield in Daugavpils is a priority not only in the development program of the city, but also in the spatial plan of development for the whole Latgale region.

In order to implement the project Daugavpils City Council founded “Daugavpils lidosta” Ltd. (“Daugavpils Airport” Ltd.) in August 2005, putting up 100% of the core capital for the project which they intend to use to develop the former military aerodrome amounting 232 ha into Daugavpils International Airport.

Following the regulations of Latvian transport infrastructure development program, they aim to build an international and regional airport in Daugavpils within the next 4 years suitable for large-scale airplanes which will allow for both international and domestic passenger traffic, international and domestic cargo transport and charter flights. They have intention to build a runway of 2500 m in length and 46 m in width.

The building of an international regional airport will also lead to the further development of other activities in the area based on servicing the airport and its customers and more work by to attract investment in the area.

Daugavpils Fortress

Daugavpils Fortress is a unique object in the context of European cultural history, a multifunctional complex of buildings, which has remained almost unaltered since its construction dated back to the 19^th century. It is built using a unique system of fortifications making this object the only one of its kind in Northern Europe. The Fortress is a “visiting-card” for Daugavpils and a formative object of the city environment. Within the total territory of around 20 hectares it contains 44 buildings (total floor space of more than 90 000 square meters), 38 of which have been built between 1812 and 1989.

In order to ensure the preservation and optimal exploitation of the monument as a unique object of historical value, the City Council decided on October 28^th 2004 to develop the Fortress into a cultural, business, recreational and tourism centre. Daugavpils Fortress will be developed as a multifunctional object where significant social buildings will be placed, structuring it as a regional service centre, preserving the Fortress as an architectural, historical and cultural object while at the same time developing its attraction to tourists. To further this goal the council aims to establish a Tourist and Visitors Centre around the complex of buildings near the Nikolaj’s Gate. This is near the Arsenal Building, where an art centre is planned, a central place for activities and gatherings before visiting the Fortress.

Daugavpils Fortress. Highlighted building is the place of potential Art Centre

Mark Rothko’s Art Centre as a part of Fortress development plan

The art centre in the Arsenal is intended primarily to display paintings by Mark Rothko who was born in the city. It is an attempt to create a novel tourism product in the Latgale region and in Latvian tourism market in general. Born in Daugavpils in 1903, Mark Rothko later moved to New York (USA) and created the abstractionism – expressionism branch of art. His work is kept in major museums and private collections all around the world. Unfortunately, there is not a single piece of his original work in the Rothko’s birthplace, Daugavpils. Now however, the artist’s children have also agreed that 4-6 pieces of his original work will be kept in the “Mark Rothko Art Centre” making Daugavpils the only place in Eastern Europe where it will be possible to see the original work of this prominent painter. This combined with the development of the city means that Daugavpils is establishing itself as European centre of the future.

Mark’s Rothko’s painting that was sold for $72.8 million on May 15, 2007. Thus, it became the most expensive work of post-war art sold at auction 

For more information about Daugavpils and potential possibilities for your business in particular please contact Inga Goldberga, the Head of Development Department, Daugavpils City Council by e-mail (goldberga@daugavpils.lv) or visit http://www.daugavpils.lv/.