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Business Infrastructure
Transport & logistics
Latvia's transport system provides an appropriate infrastructure base to facilitate the growing trade flows between the EU and Russia/CIS, and to serve the needs of local export/import operators:
- free ports in Ventspils, Riga and Liepaja, with a total cargo throughput of 60.7 million tonnes in 2009, predominantly transit shipments;
- an extensive and functional road network, connecting with both European and CIS road networks, as well as Latvia's ports;
- the shortest route between the EU and the CIS;
- specialized, high-capacity railway corridor linking Latvian ports with Russia and the Far East;
- Riga International Airport — competitive Baltic passenger hub, high-speed cargo distribution centre;
- pipeline systems for transit and distribution of Russian oil/natural gas.
Ports
As vitally important export and transit-transhipment points for Latvia itself and for several neighbouring countries, the three largest Latvian ice-free ports provide reliable access, 365 days a year. Connections to all other transport infrastructure elements, along with attractive tax-free zone incentives, have resulted in the ports becoming regional centres of industrial activity. Nevertheless, there are still a number of port locations available for businesses, within customs-free zones and with direct sea access. Latvian ports are highly export-oriented, with the proportion of loaded-on cargo being about 95% of all cargo throughput, mostly shipping cargo for transit and export from Latvia. The leading port in terms of unloaded cargo volume is Riga. RO-PAX transport connections with Germany and Sweden are important logistics services available at all three free ports.
Latvia’s main ports:
| Cargo Throughput (‘000 MT in 2009) | Maximum Draught (m) | Specialization and Facilities | |
29.7 | 12.2 | 1 962 | General/container cargo (timber), oil products, dry bulk (coal), RO-RO/RO-PAX | |
Ventspils | 26.6 | 17.5 | 2 451.3 | Oil products, crude oil, fertilizers, RO-RO/RO-PAX |
4.4 | 9.5 | 385 | General/container cargo (metals), oil products, dry bulk (grain), RO-RO/RO-PAX | |
Minor ports | 1.2 | 4-7 | N/A | General cargo (timber), dry bulk (seafood) |
Source: Ministry of Transport, 2010
All the ports are equipped with the required infrastructure – tanks for bulk liquids, terminals, warehouses and cranes, communications infrastructure – and have operating service-providers – stevedores, agents, customs brokers and banks – with a number of internationally recognized names such as Kuehne & Nagel and Maersk Sealine being a visible part of the service offer.
Additional information at:
www.portofventspils.lv
www.rop.lv
www.portofliepaja.lv
www.transport.lv
www.sam.gov.lv
www.lla.lv
Roads
The total length of Latvia’s road network is 73 074 km. The average density of roads in Latvia is 1.132 km per km².
The Latvian road system provides direct access to destinations in the east (Russia/CIS) and south west (central/western Europe), and is, through other countries, and/or RO-PAX-capable ports, well connected to northern Europe (Finland and Sweden). Generally, all roads are fully public and toll-free, as funds for maintenance are collected from excise tax on fuel and vehicle registration fees paid to the Road Traffic Safety Directorate. With financial support from the EU, Latvia has upgraded sections of the Via Baltica — the first pan-European transport corridor, connecting Finland and the Baltic States to Poland and western Europe. To divert increasing transport flows from the centre of the capital city, Riga City Council has constructed the Southern Bridge over the river Daugava and plans to construct a Riga Northern Transport Corridor – a high-speed road crossing Riga from east to west and bypassing the city’s historic centre.
Transportation Costs & Duration to/from Riga (13.6 m standard tilt trailer; EUR*; one way)
| Export | Import | Duration (working days) |
2000 | 950 | 3-4 | |
400 | 800 | 2 | |
1100 | 1700 | 5 | |
1000 | 1900 | 3-4 | |
Frankfurt am Main ( | 1900 | 1900 | 3-4 |
1100 | 1900 | 3-4 | |
1560 | 2600 | 4-5 |
*22% VAT not included
Source: Schenker, 2010
Forwarding services is a comparatively developed market with a large number of actively competing operators, including international companies like Schenker, Danzas and DFDS Transport. Transport-freight intensity is increasing rapidly together with the growth in foreign trade and transit operations — international freight volumes passing through Latvia have increased by 58% since 2004.
Additional information at:
www.lvceli.lv
www.sam.gov.lv
www.lla.lv
Railways
Latvia possesses a relatively dense railroad network connecting the country to destinations as far as the Russian Far East, wherever the former Soviet railway gauge standard is in operation. There are additional opportunities for trade connection with Japan and Southeast Asia. Currently, Latvian railways mostly serve as a transit trunk-line with as much as 85% of total freight volume being transit from Russia and Belarus to Latvian ports and approximately 35% of freight rolling-stock being tanker-wagons. Movement in the opposite direction — to Moscow and other parts of Russia/CIS is dominated by container cargo.
In order to facilitate trade flows in the north-south direction, it is planned to implement a pan-Baltic railway route, Rail Baltica, connecting Tallinn – Riga – Kaunas – Warsaw – Berlin. This project would also serve as the first step in Latvia's transition to European railway-gauge technical standards.
Additional information at:
www.ldz.lv
www.sam.gov.lv
www.lla.lv
Air transport connections
There are three operating airports in Latvia: Riga International Airport, Liepaja International Airport and Ventspils Airport. A fourth airport at Daugavpils (southern part of Latvia) is currently at an early development stage. Nearly 99% of all air passenger and freight transport in Latvia goes through Riga International Airport.
Riga International Airport is the leading air transport and transit centre of the three Baltic States, currently serving 19 airlines including Latvia's flag carrier airBaltic, low-fare carrier Ryanair and European leaders like Lufthansa, Czech Airlines and Finnair. In 2010, Riga International Airport received the Emerging Market Airports Award (EMA) in the Best Airport category handling up to five million passengers per year. The companies mentioned and others ensure fast and reliable direct travel from the recently reconstructed Riga International Airport to more than 80 destinations in Asia and Europe, including Helsinki, Stockholm, Copenhagen, Berlin, Frankfurt and London, all of which provide further connections to transcontinental air routes. The increase in the number of carriers and accession to the EU has resulted in unprecedented growth of passenger numbers by more than 0.5 million each year, with the number of flights annually increasing from 19 504 in 2003 to 60 087 in 2009. This makes Riga International Airport the most rapidly developing airport hub in the whole of Europe. The number of passengers using the airport in 2009 reached 4 million and is predicted to exceed 4.5 million in 2010. Riga International Airport is planning the construction of new terminals to continue its current growth and increase passenger-handling capacity.
The countries with direct flights from Riga include Austria, Azerbaijan, Belgium, Belarus, Czech Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Greece, Ireland, Italy, Lithuania, Netherlands, Norway, Poland, Russia, Spain, Sweden, Tunisia, Turkey, United Kingdom, Ukraine, Uzbekistan, Hungary and Egypt.
The air cargo and/or express package services of international providers like SAS Cargo, Lufthansa, Fed Ex, DHL, UPS and TNT ensure one-day delivery within Europe and two days for the rest of the world.
Additional information at:
www.riga-airport.com
www.liepaja-airport.lv
www.airport.ventspils.lv
www.sam.gov.lv
www.lgs.lv
www.lla.lv
Pipeline systems
The pipeline system in Latvia provides transport and storage of oil, oil products and gas. The total lengths of oil and oil-product pipelines within Latvia are 437 km and 329 km respectively. They connect oil extraction and refinery plants in Lithuania and Russia/CIS, the nearest being in Polock (Belarus), to Latvia's ports. Connected to the Russian pipeline system, pipeline management company LatRosTrans provides a competitive alternative to railway transport using equipment produced by world industry leaders like Siemens and Schneider to guarantee the maximum environmental and operational safety of the main pipelines.
Additional information at:
www.latrostrans.lv
Utilities
A number of Latvia’s utility services are still state-owned or corporate monopoly operations. In order to ensure reasonable pricing in these areas, the Public Utilities Commission of Latvia, whose responsibilities include utilities, telecommunications, and post and railway services, regulates the tariff policies of monopoly utility providers. Also, certain utility sectors are being liberalised by opening markets to other service providers.
Additional information at:
www.sprk.gov.lv
Gas
Latvia is endowed with a unique natural resource — the Incukalns Gas Reservoir, which is the largest natural gas-storage reservoir in Europe with a capacity of approximately 4.4 billion m3. As a result, the country is in a very favourable position in terms of gas supply costs, also providing gas storage for the two other Baltic States and the western border areas of the Russian Federation. The reservoir enables the operator Latvijas Gāze, owned by E-On and Gazprom, to overcome the problems arising from seasonal demand fluctuations and to more effectively utilise existing gas pipeline networks.
In addition to supplying the domestic market, natural gas in Latvia is used in heat generation, power generation, the manufacture of construction materials, agriculture, the food industry and many others. Latvijas Gāze supplies natural gas to industrial clients through its centralized gas supply network, also carrying out and financing engineering and installation works, or parts thereof, for the establishment of new connections.
Additional information at:
www.lg.lv
Electrical power
State-owned Latvenergo provides about 95% of all the electricity generated in Latvia as well as ensuring its import, transmission, distribution and supply to consumers. The company operates the whole electrical energy cycle from power generation (combustion and hydro-electric plants) through to distribution to sub-stations and user networks. More than 100 independent producers, operating small-capacity hydro-electric plants, wind generators or heat and electricity co-generation plants, produce a very small proportion (approximately 1%) of Latvia’s electricity. All the same, 'new energy' generation is growing substantially and is expected to be of increasing importance in the future.
Connection of a new facility to the electricity network can be carried out by Latvenergo, or by any other licensed electrical-engineering supplier. Currently, the monopoly position of Latvenergo is weakening and customers can choose to buy electricity from an alternative market participant Enefit.
Additional information at:
www.latvenergo.lv
www.enefit.lv
www.vidm.gov.lv
District heating & water supply
District heating and water supply services are generally provided by separate operators in each municipality, however, where necessary or more convenient, any company is free to construct its own system as long as it meets existing technical/environmental regulations. The municipalities mostly own local operators, but some have been privatised and have attracted foreign investors.
Waste disposal
Several local and regional waste management companies throughout the country provide general waste disposal services. The waste produced in Latvia is recycled both locally and in foreign countries. Several facilities exist for the recycling of metal, glass, paper and polyethylene. The most modern polyethylene recycling facility in the Baltic States is located Latvia. Several types of hazardous waste (car tyres, oil and oil filters) are recycled in Latvia. Electronic and electrical equipment are collected and transported abroad for recycling. There are also installations for hazardous waste incineration, mercury recovery from luminescent lamps, water-oil separation facilities, incinerators of oil- and medical-waste, and installations for disinfecting medical waste.
Additional information at:
www.vidm.gov.lv
www.zalais.lv
Telecommunications
Once lagging behind in telecoms infrastructure, Latvia secured major 'hard' investment after regaining independence in 1991 when it concluded a privatisation deal with Tilts Communications (now owned by Finland's Sonera Holding B.V.) who became a minority shareholder (49%) in national telecommunications operator Lattelecom. The country is now extensively equipped with digital communications networks. Since 1 January 2003, the fixed telecommunications sector has been open to competition, thus shortening Lattelecom’s period of monopoly rights. New participants have entered this sector of the telecommunications market and are offering their services: licences to operate in this sector have been issued to many companies. The biggest of them are CSC Telecom, Baltkom, Telecom Baltija, Latvijas dzelzcels and Izzi.
To date, telephone line digitalization has reached 90% nationally. Other advanced fixed-voice and data-transmission services offered by Lattelecom include the leasing of digital lines, ISDN, LANs and ADSL. Lattelecom currently provides the fastest internet connection in Europe and one of the leading connections by download speed in the world, with maximum speed up to 500 Mbit/sec. The UltraDSL package also includes a number of additional services such as conference calls, call waiting and number detection.
Internet services ranging from simple dial-up or radio links to optical broadband lease-line connections are available from several hundred ISPs. International connections are provided by high-capacity, broadband optical-network links to Estonia, Lithuania, Russia and Sweden. WiFi, GPRS and more recently, 3G services have been launched in Latvia. Currently, public wireless internet hotspots are available in almost all public areas in Latvia.
There are three mobile operators – LMT, Tele2 and Bite – with almost 100% of Latvia's population being subscribers and an additional number utilising pre-paid cards. GSM network coverage of the mobile operators is as much as 99% of Latvia. The mobile operators offer a wide range of data-transmission services – high-speed 3G and GPRS data transmission and MMS. 3G is one of the fastest growing services both for Latvian mobile operators and on-line media with approximately 0.5 million users in 2010. LMT, Tele2 and Bite all offer services in UMTS-system networks.
Additional information at:
www.sam.gov.lv
www.lattelecom.lv
www.baltkom.lv
www.lmt.lv
www.tele2.lv
www.bite.lv
www.triatel.lv
Real estate
As a country with a relatively low density of population, Latvia can provide a range of location choices for both industrial and office operations. There are a number of vacant factory buildings in all the largest cities, along with historic city centres that are gradually developing new functions, evolving from residential into commercial, entertainment and shopping areas. In addition to the availability of individual properties, a number of business-hosting parks have been established or are being developed for different types of tenants.
The first greenfield industrial territory, Riga Industrial Park (www.rip.lv), was established in 1998. Riga Industrial Park offers developed infrastructure in line with European standards, tailor-made warehouses, offices and production units with connections to all necessary utilities and infrastructure just eight kilometres (or a ten-minute drive) to the east of central Riga.
The largest developer and manager of industrial parks in Latvia is NP Properties who have eight industrial parks with a total area of 150 ha in Riga, Olaine, Jelgava, Salaspils, Rezekne and Daugavpils. (www.industrial-park.lv). Their success story is based on acquiring large, vacant factories, the complete or partial renovation of buildings, and attracting foreign companies to set up their businesses in Latvia by providing an advantageous business environment and an extensive range of services. It is also popular for local companies to launch their businesses in a modern and safe business environment like the Nordic Industrial Park and Nordic Technology Park territories.
Some industrial parks have been established and designed for specific industrial branches or for the large-scale needs of particular tenants. For example, Business Park Ogre (www.bpogre.lv), developed as a new industrial park in Ogre, was specifically designed for the Norwegian SME sector.
The majority of Latvian industrial parks are continuing to expand by constructing new or renovating out-dated premises. Experience shows that business and industry is also moving to other cities and regions of Latvia. The largest industrial and business parks being developed in Latvia are:
- NP Industrial Village, Salaspils (Riga region);
- NP Rezekne Business Park, Rezekne (southeast Latvia);
- Granita Street Industrial Park, (Riga);
- Business Park Vega, (Riga Free Port);
- Karosta Industrial Park, Liepaja (southwest Latvia);
- Pulvera iela Business Park, Liepaja (southwest Latvia);
- Pumac Industrial Park, Liepaja (southwest Latvia);
- Daugavpils Industrial Zone, Daugavpils (southeast Latvia);
- Timber-processing Industrial Zone, Jekabpils (southeast Latvia);
- Ventspils Industrial Park, Ventspils Free Port, (northwest Latvia);
- Ventspils High-tech Park, (northwest Latvia).
Average Commercial Costs (EUR/m2 per month)
Average Commercial Rents , EUR/m2 | |||
| Other cities | ||
Offices | 4-16 | 4-16 | 3-15 |
Retail | 5-40 | 3.5-25 | |
Modern warehouse/industrial | 2-4 | 2-5 | 2-4 |
Average land prices, EUR/m2 | |||
Other cities | |||
Commercial-use suburban land | 400-1500 | 50-100 | 30-100 |
10 - 50 | |||
Source: Ober-Haus Real Estate Market Review, 2010; Colliers International Real Estate Market Review, 2010; Latio Overview of retail trade premises in Latvia’s largest cities, 2010./
For greenfield projects, there are no barriers to using the services of local real estate agents and construction companies. The construction services market in Latvia is very competitive with a number of local and international players like Constructus, NCC Konstrukcija and PEAB. The real estate business is also well developed and competitive, featuring companies such as Latio, Ober-Haus, Arco Real Estate, Re&Solution and Colliers International.
Additional information at:
www.colliers.lv
www.ober-haus.lv
www.latio.lv
www.arcoreal.lv
www.resolution.lv
