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Biotechnologies Chemicals and Pharmaceuticals
Through a mix of history and tradition, Latvia possesses a strong manufacturing base in fine chemicals and pharmaceuticals, manufacturing an extensive range of products, from petrochemicals and man-made fibres to paints and household chemicals. Currently, the most significant chemical manufacturing sectors include fibres, pharmaceuticals, paints, varnishes, soaps and cosmetics, and rubber and plastic products.
The chemical industry accounts for 9% of total value added within manufacturing. It is the 7th largest manufacturing industry in Latvia and has one of the strongest growth rates in the industrial sector.
Rubber and plastic products took the largest share in the sector's 2007 output (49%) followed by pharmaceuticals, medical and phyto-chemical products (27%). In 2007 production output increased across all sub-sectors. The most significant increase was in plastic and rubber production, by 20%, while the pharmaceutical sector rose by 12%.
The number of people employed in the Latvian chemical industry is about 4300, which is more than 5% of the total number employed in manufacturing. 45% of them are employed in the pharmaceuticals & medicines sector, and 1 000 are high-level experts and researchers.
Source: Central Statistical Bureau of Latvia, 2008
Latvia has a variety of chemical industry sub-sectors in addition to a substantial pharmaceutical industry. Paints, coatings and adhesives producers make up a large segment, with about 14 active companies. Glass-fibre production is even more widely represented. In this sub-sector the leading company is Valmieras Stikla Šķiedra, a manufacturer of glass fibre and technical-glass fabrics, with production output almost entirely being exported. Another sub-sector with one dominant company is rubber production, in which Baltijas Gumijas Fabrika produces an extensive range of products. The ceramics sub-sector consists of numerous individual entrepreneurs, who may be considered artisans rather than manufacturers. There are still some manufacturing facilities, however, offering bulk production of standardised ceramic products. Latvian companies also produce agrochemicals, household chemicals, plastics products, building materials such as concrete, ceramic tiles and lime, and gypsum products.
Another traditional sub-sector within the industry now seeing a resurgence is R&D in areas such as the life sciences, wood chemistry and the development of new materials for the aerospace, automotive and construction industries. Latvian pharmaceutical companies have proved their research capabilities by being issued patents for 12 new drugs.
Volume manufacturing of chemical products is mostly carried out by large companies located in the Riga region, in Valmiera and in Dobele.
Sector Exports
The chemicals sector has shown consistent growth trends, particularly in recent years. In 2007, annual output increased by 12.8%. Export volume increases were seen across all product groups except organic chemical compounds.
The leading export products are pharmaceuticals, comprising 37% of the sector's total exports, followed by plastic products (33%) and glass fibre (11%).
The EU is the main export market for chemical and allied industries products (69%) and for plastic and rubber products (74%). Elsewhere, 28% and 23% respectively of these products were exported to CIS markets in 2007.
Source: Central Statistical Bureau of Latvia, 2008
Source: Central Statistical Bureau of Latvia, 2008
Source: Central Statistical Bureau of Latvia, 2008
Sector Advantages
Key advantages of the sector: strong R&D capability, established manufacturing infrastructure, geographical and cultural proximity to eastern markets.
The chemical sector in Latvia has great potential, with numerous new product development and manufacturing opportunities. The production of pharmaceutical preparations, such as peptides, derivatives of amino acids and bio-polymers, and veterinary medicines can be developed even further through a combination of local raw materials and the new product development potential of Latvia's research institutions. Organic chemistry development also has potential, particularly in organic synthesis production (peptides, derivatives of amino acids, biopolymers) and the manufacture of generic pharmaceuticals. Several bio-technology companies are seeking venture capital to attain commercialisation of their innovations. Research at the Latvian Institute of Inorganic Chemistry has provided a foundation for the production of nano-sized refractory compound powders.
Development trends within the sector include:
- bio-tech lab equipment manufacture
- bio-reactor manufacture
- bio-fuel production
- generic pharmaceuticals manufacture
- sub-contracting of research services, production and packaging
Additional information
www.lakifa.lv - Association of Latvian Chemical and Pharmaceutical Industry
www.packaging.lv - Packaging Association of Latvia
