Lithuanian production exports to China start to take off

Exports to China by Lithuanian companies increased by almost four times

With Lithuanian-Chinese bilateral efforts, Lithuania has become China’s largest economic partner in the Baltic States, while China is the largest Asian trading partner of Lithuania. Over the past few years (2010 – 2016), Lithuania’s and China’s trade relations have intensified: Lithuanian production exports to China has increased by almost four times, the total trade turnover – by almost twice.

According to Department of Statistics, in 2015 China was the 18th Lithuanian trading partner in terms of trading turnover, which compared to 2014 increased by 7.7 percent and amounted to 827.7 million euros. During the same year, the Lithuanian production exports to China rose by 0.2 percent and amounted to 102.3 million euros. China was the 26th Lithuanian partner based on export volumes. Over the same period, imports from China have increased by 8.9 percent and amounted to 725.3 million euros, China was the 13th Lithuanian partner by import volume. According to the latest data, in January-October, 2016 from Lithuania to China exported goods amounted to 98.9 million euros, imported goods from China – 587.7 million euros. For comparison, in 2010 Lithuanian production exports to China amounted to 27.8 million euros and the imported Chinese products’ worth was 430.4 million euros.

The increasing purchasing power of Chinese – a good sign for Lithuanian business

Chinese income is growing rapidly and as an effect to this their purchasing power and demand for imported products are constantly increasing. At the moment, China particularly increased the demand of the artistic and collectible products (845 percent), breakfast cereals (364 percent), dairy products (136 percent), cosmetics and perfumery (133 percent), meat (100 percent) and other food products (107 percent). According to Foreign Affairs Ministry’s data, the most perspective export sectors in China are: wood and wooden products, fruits, chemicals, dairy products, furniture, clothing, advertising services, logistics services, lasers.

Recently EU’s small and medium business representative in China, expert Pablo Recio who visited Lithuania, predicted success for Lithuanian businesses exporting to China. According to him, about 80 percent of Chinese imports include meat, fish, milk, fruits, breakfast cereals, and all these products made by Lithuanian companies have the highest quality.

The fateful 2016…

In 2016 Government’s accepted project “Lithuanian exports target markets: feasibility analysis and business challenges” China has been identified as one of the most prospective markets. This means that Lithuania seeks to establish viable and active trade relations and promote strategic economic relations with China.

Also in the summer of 2016 Chinese Administration of accreditation and certification granted the rights for Lithuanian dairy farmers to export dairy products to this country. The permission to export to China was received by 16 Lithuanian milk companies: UAB “Hochdorf Baltic Milk“, UAB “Marijampolės pieno konservai“, AB “Rokiškio sūris“, AB “Vilkyškių pieninė“, AB “Kelmės pieninė“, AB “Modest“, AB “Žemaitijos pienas“, the division “Ukmergės pieninė“ of UAB “Rokiškio pienas“, UAB “Rokiškio pieno gamyba“, AB “Pieno žvaigždės“ division “Mažeikių pieninė“, AB-F “Šilutės Rambynas“, ŽŪK “Pienas LT“, the division “Pasvalio sūrinė“ of AB “Pieno žvaigždės“, UAB “Uriga“, UAB “Litamilk“ ir UAB “Lukšių pieninė“ Jurbarkas division. All the companies expect to start exporting to China as soon as possible, for example, “Vilkyškių dairy” dairy exports to China started with mozzarella cheese. Although export products are industrial, which means that in China they will be processed and the final product will not be Lithuanian, but the companies’ executives are thrilled for opened export opportunities.

Both the permission received to export dairy products and the China’s market recognition in priority proves that both parties are willing to engage in new and promote the already established bilateral trade relations and look forward to even closer economic cooperation in the future.

According to Lithuanian Ambassador of People’s Republic of China Ina Marčiulionytė, Lithuania over the next few years expects to receive permits for exporting meat, silage, honey, cereals, live animals, animal feed, calf milk replacers, additional species of fish and other goods. Receiving the export permits for these particular products, trade relations between Lithuania and China would further intensify and the Lithuanian production exports to China would increase drastically.

In China, Lithuania is famous for its lasers and biotechnology products

Although Lithuanian – Chinese economic relations have gained momentum only last year (the Chinese market is confirmed as prospective, Lithuania has been granted the rights to export dairy products to China), but a part of Lithuanian companies have successfully implemented their production for several years into remote China’s economy.

UAB “Ekspla”  is one of the largest high-tech companies in Lithuania. Established in 1992, the company produces scientific and industrial lasers, their components and systems. Most of their production (about 94 percent) company exports to foreign countries, one of the markets in which the company found its niche is China. “Ekspla“ exports their products to China since 1999, but trading volumes began to grow in 2003, when the company began its collaboration with the distributors in Beijing. A few years later, in March 2009, the new company representative office was established in Shanghai.

UAB “Thermo Fisher Scientific Baltics“, ex “Fermentas“, is a part of “Thermo Fisher Scientific“. It is the world’s largest company manufacturing and selling biotechnology products and services to science. The company started its operation in 1975, when current Biotechnology Institute was established in Vilnius. Later, the company grew and expanded, began to cooperate with foreign countries. One of their biggest partners is China. Cooperation with China started in 1996. In 2008, company’s representative office was established, in 2009 instead of the representative office, a subsidiary „Fermentas China“ was established in Shenzhen. The new company is responsible for the distribution of products in China and 19 local distributors’ activities. The company’s product catalogue and web page is translated to Chinese. Sales increase every year, for example in 2009, “Fermentas“ sales in China accounted for 8 percent of total Lithuanian companies’ sales in China.

The road to success is based on traditional Chinese – baijiu

“Stumbras“ established in 1906 is one of the largest company of strong alcoholic drinks in Lithuania. Since 2011, the company exports to China Lithuanian vodka, brandy and other strong alcoholic drinks (“Lithuanian Gold Vodka“, “Stumbras Centenary Vodka“, “Ozone Vodka“, “Gloria“ and others). Since March, 2015 the company started to supply Chinese market with its traditional Chinese vodka – baijiu. It is a grain-made 50-60% strong clear alcoholic drink. Designed and made in Lithuania “Mount Royal” baijiu is an attractive and promising product, because it is made in Europe, but is a traditional alcoholic drink loved by locals. Main partners of “Stumbras” in China are bars, restaurants, specialized alcoholic beverage stores. Their production is being sold in Beijing, Shanghai, Guangzhou and on the most popular online shopping platforms like www.taobao.com, www.jd.com. In 2015 “Stumbras” exports accounted for 23.16 percent of total sales, while exports to China amounted to 0.31 percent of total exports.

 

Author: Agnė Svorobovičiūtė

Photos by: Vaiva Sriubaitė

Translates by: Laura Bukšnytė

Author: Baltic Asia

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