Latvia's "heavyweight industry" - mechanical engineering and metalworking - is one of the country's leading industrial sectors, with a powerful focus on exports and many years of experience in Scandinavian countries, including Sweden. Latvian companies can offer the Swedish market everything that is currently in demand by the industry and much more besides, including automated solutions, implementation of complex projects, highly qualified specialists, as well as new production directions, including in the military sector which is so relevant right now.
According to Latvia's foreign trade statistics, the industry's products are exported from Latvia to over 100 countries globally. In total, although about 73% of the products are sold in EU countries, in 2024 Latvia's fourth largest export partner in terms of value was Sweden, according to data from the Association of Mechanical Engineering and Metalworking Industries (MASOC).
The good news is that European markets, including the Baltic and Nordic countries, are currently recovering from the economic shocks of 2024, which, although linked to the global crisis in the construction industry, also negatively impacted Latvia's mechanical engineering and metalworking sectors. Although the geopolitical situation is still characterized by great uncertainty, the start of this year and the forecasts for next year are positive, signifying new opportunities for Latvian companies in the Swedish market, according to leading companies within the industry.
Demand for automation is growing
The Latvian company Design Tree is an engineering business specializing in the design and manufacture of non-standard production equipment. It operates in the field of mechanical engineering, including automation, robotics and complex mechanisms. It aims to help manufacturing companies make processes smoother, faster and smarter – from defining an idea or problem and developing a concept through to a ready-made mechanism or equipment that solves specific manufacturing challenges.
Analysing industry trends, the company's founder, owner and CEO Matīss Irbe admits that in the last two years demand for automation has soared. Manufacturing companies are increasingly seeking more efficient solutions that save labour and energy.
“It is clear that businesses are struggling to overcome the shortage of qualified labour. Therefore, oftentimes they seek solutions that enable them to hire people with no specific prior knowledge. For us, this creates additional challenges – our solutions must not only be technically powerful, but also ergonomic, easy to use, easy to monitor, and above all, safe,” explains Matīss Irbe.
“The work we do is not just confined to mechanical engineering – we have to study the customer’s production process in-depth so we can offer an efficient solution that meets the customer’s needs. Geopolitical events and supply chain complications also entail growing demand for more local and dependable partners, which opens up new opportunities for Latvian businesses. We're also witnessing growing interest in the military sector, as a consequence of which we've obtained a military manufacturer certificate,” says Irbe.
Weighing up the biggest challenges in export markets, including in the Scandinavian countries and Sweden, Irbe stresses that in order to win the trust of foreign companies, Latvian business require a very strong portfolio and good references.
Irbe proceeds to explain that, “Oftentimes, engineers have to work in broader disciplines, because it's impossible to find a narrow specialist for each niche. This compels us to take a broader view and hone our ability to offer more integrated solutions. This is highly appreciated by customers in developed countries, because it means that they don't need to hire additional specialists to fill niches not covered by the equipment supplier.”
Unique solutions are on offer
Design Tree believes that the advantages and potential of Latvian businesses lie in the ability to ensure a good price-quality ratio, as well as the ability to adapt to customer needs flexibly. A further key advantage lies in shared values.
“In Latvia, people are essentially focused on cooperation and open communication, and Scandinavian markets highly appreciate dependable suppliers. Thanks to their small structure, Latvian businesses can build close and personal relationships with customers, fostering long-term cooperation. Moreover, often we share human values with our Scandinavian partners in the form of direct communication, openness and readiness to collaborate in the long term,” explains Matīss Irbe.
Highlighting Design Tree's advantages and skillsets, Matīss Irbe underlines the ability to offer a full cycle – from idea and concept through to finished equipment. Therefore the customer has no need to split the project between several suppliers, because both design and production, as well as final tests and documentation are provided. Design Tree pays particular attention to ensuring that the machines are not only technically efficient, but also aesthetically appealing, easy to use and safe.
“In our opinion, good mechanical engineering entails not only fulfilling a function, but also developing smart solutions in every respect. Our team's advantage lies in our extensive skillsets, ranging from mechanics and automation to prototyping and production. Hence we're able to integrate different technologies and create solutions quite quickly that meet the customer’s needs precisely,” asserts Irbe. “Practically all our projects are innovative, because we offer solutions that can't be bought off-the-shelf on the market. Just about every piece of equipment we design is unique and custom tailored for a specific customer. This means that innovation is not just a separate direction for us – it's an integral part of our daily work.”
Design Tree is experienced in both light industry and heavy engineering. It has developed complete sets of production equipment encompassing almost all stages of product manufacturing, ranging from specialized hand tools and production carts to ensure production flow, through to complex manufacturing lines and assembly equipment. Equipment like this has facilitated production time savings of up to 90% compared to the previous process.
The company also works in heavy engineering – for instance, on mobile concrete production plants, which speed up construction and solve the problem of a shortage of labour for physically demanding work. Right now, Design Tree is working on chemical industry equipment, which will enable a manufacturer to increase its production volume by at least 80%.
Greater interest in small projects
Ercon, a Latvia-based international company with over 30 years of experience in metalworking, which offers engineering, manufacturing and assembly services, acknowledges that prevailing global uncertainty is also impacting the metalworking industry.
“Although borrowing rates are falling, which is positive, there are ongoing concerns about new tariffs or other global challenges that could shake our industry. So currently we're hopeful but cautious. At present, the market is characterized by more small short-term projects with a larger volume of work, which enables us to maintain turnover, but not drive growth,” explains Ercon Board Member Andris Baltausis. For many years now, Scandinavian countries, including Sweden, Norway, Denmark and Finland have been Ercon’s main markets and cooperation partners, along with the Netherlands.
“In Latvia, we've got a very good technical base with which to implement projects of various scales. In Sweden it is evident that metalworking is becoming less popular, because it is a heavy, dirty industry. We've still got knowledgeable high-level specialists, which enable us to ensure the highest production quality,” says Baltausis. About half the company’s orders are comprised of customized solutions. The company does not specialize in specific industries — its customers include mining, agricultural, woodworking and other companies.
In the next few years, the company will continue to invest in development, the expansion of its production plant, and in increasing its competitiveness and capacity, and in particular in the creation of complex equipment that will facilitate improved production of specific products.
Close geographical proximity and shared values
Iekārtu rūpnīca is a subsidiary of the Latvian company AS Latvijas Finieris, with 25 years of experience. It functions as the conglomerate’s technical support centre and manufactures non-standard metal products solutions. The plant’s employees service most of the factory equipment of Latvijas Finieris and its subsidiaries day-to-day, as well as providing innovative mechanical engineering services to customers in Latvia and abroad. The company’s main strength lies in its ability to provide an all-encompassing production cycle and continuously develop the team’s skillsets in order to flexibly adapt to demand and needs, explains Iekārtu rūpnīca Managing Director Māris Bumbieris.
The technical support service includes numerous different components: both the design and production of veneer and plywood manufacturing equipment and even lines, along with maintenance and servicing, and production of individual components and unique, innovative parts. Iekārtu rūpnīca has a team of over 210 employees including engineers, designers, welders, millers, sheet metal processing specialists, tool sharpeners, diagnosticians and other practitioners. About 40–45% of the metalworking turnover is comprised of external customers. “The main trends currently affecting the industry as a whole, as well as the profile of the Iekārtu rūpnīca, are linked to the broader implementation of automation and digital solutions. Meanwhile, the industry as a whole is facing the challenge of ensuring the availability of qualified labour, fluctuating energy and raw material prices,” stresses Bumbieris.
Latvia's advantage in this situation is its geographical proximity and cultural similarity with the Scandinavian markets, as well as a flexible and high-quality approach to niche projects. According to Bumbieris, “Iekārtu rūpnīca is unique in being able to a full cycle of services - from the design and manufacture of equipment or production lines to delivery and assembly. This is a crucial consideration for our customers, because they see the equipment in operation - in the intermediate stage before delivery.”
Iekārtu rūpnīca closely collaborates with several Scandinavian companies. “Engaging our team of professional designers, some of them choose us as a subcontractor to both manufacture their own solutions and development new ones. Thus, we grow and develop together, resulting in even better cooperation. We've been collaborating with Scandinavian companies for almost 20 years now. We've proven our credentials as a stable cooperation partner, which is also one of the prerequisites for successful cooperation when commencing negotiations with new business partners in Scandinavia. In the process of manufacturing non-standard equipment, a range of nuances must be observed, which many equipment manufacturers in the Baltics are unable to do,” stresses Bumbieris.
In future, Iekārtu rūpnīca plans to expand its current production facilities, replace equipment, optimize production flows, and improve the well-being of it employees.
For a number of years now, the Investment and Development Agency of Latvia (LIAA) has been organizing the participation of Latvian companies in the Elmia Subcontractor construction fair. This year's fair will take place from November 11-13, 2025 in Jönköping, Sweden. First organized in 1975, it is Sweden's largest industrial supply and cooperation fair.
Latvian companies have been taking in this fair since 2003, both as participants at the national stand and with their own individual stands. Every year, approximately 1,000 companies from 25 countries take part in the fair, while about 12,000 visitors visit the fair annually. The main focus of the fair is supplies and cooperation. The industries represented are automotive component production, mechanical engineering and metalworking, equipment and technological tool production, plastic and rubber part production, electronics and automation, design developments and engineering.
Throughout the exhibition, LIAA will arrange that one of its employees – an engineering industry expert is present at the national stand. Additional support for Latvian companies in inviting potential partners, as well as in preparing individual meeting programmes for businesses, is provided by LIAA's representative office in Sweden.