Liepaja - where more than wind is born

  • 2006-04-12
  • By Elizabeth Celms

DESIGN CONCERN: The new Pulvera Street Industrial Park in Liepaja not only boasts a flashy exterior, but also 2,000 square meters for production.

RIGA - Liepaja looks set to become Latvia's next investor haven. Although business development in Riga has yet to reach its saturation point, the historic port city of Liepaja, with its vast coastline, international airport and acres of special economic zone, has caught the attention of both international and local businesses.

"We're seeing tremendous investment growth from Scandinavia, Germany, the U.K. and other foreign companies. Liepaja is finally being viewed as a prospective city for development," says Martins Abols, direct foreign investment consultant in Liepaja City Council's development department.
On the surface, the gray, post-Soviet haze still dominates Liepaja, Latvia's third largest city. The city's most distinguished feature is no doubt Karosta, a former Soviet military base (although it was originally constructed for the Russian Tsar) that today sits vacant and windswept, save for a stretch of Communist-era housing blocks. EU membership, however, has served the area well. Karosta has become a popular tourist attraction 's including a bizarre KGB prison overnight stay 's tapping into the current trend to seek out Soviet relics and geographical oddities.

But the area offers far more than kitsch souvenirs and photogenic landscapes. Located in Liepaja's Special Economic Zone, territory is set aside for industrial and business development, Karosta is a geographically and economically favorable place for production and business. It's therefore no surprise that the city has signed building contract after building contract for what's set to become Karosta's architectural future 'sthe modern industrial park.
According to Abols, the Karosta industrial park is about logistics: "Our multifunctional, non-freezing port is just one of Liepaja's attractive features, in addition to the city's Special Economic Zone, modern railway system and airport. When it comes to logistics, we offer the entire package."

In 1997, the Special Economic Zone was founded in Liepaja to encourage trade, manufacturing, shipping and air traffic flow. The city, which during the Soviet era had been closed to outsiders due to its military status, needed tax breaks to catch up.
The zone occupies approximately 3,000 hectares, which comprises almost 65 percent of Liepaja's total territory. Most of the zone covers the city's port area, although it also stretches into Karosta.
"Right now we're focusing on developing Karosta," Abols says. "The municipality already owns one park and TAT [local real estate development company] is constructing another on Pulvera Street for several international companies."
The Pulvera Street Industrial Park, located next to the Liepaja port, offers facilities for both rent and sale, as well as land plots for production, warehousing and other business purposes.

According to TAT representative Nora Kalna, the park's modern infrastructure and engineering communications network are invaluable assets.
The local company Aile Group, which produces wood, glass and aluminium products, inhabits the park's first building, finished in June 2005. Although this is currently the only working factory, several international and local companies have expressed interest in the park.
"The second building is set to open this June, and we have already started the third building," she says. "Once finished, the park will include five buildings with 2,000 square meters for production and 400 square meters for offices in each annex."
In addition to the construction of modern and affordable industrial parks, Abols says Liepaja's International Airport is one of the city's most impelling features. Charter flights from Liepaja and regular international flights from Palanga Airport - only 40 minutes outside the city - to Denmark have already caught foreign attention.

"The airport recently opened a new passenger terminal. The Riga-Liepaja flights are perfect for business relations between the two cities. Instead of driving, which takes hours, you can fly to Riga in 40 minutes."
But in terms of logistics, Liepaja still suffers from a poor road connection to Riga, the regional hub. The two-hour drive on a two-lane surface will need major investment if the port city is to compete with Riga and realize its full potential.
The city also offers a lower salary level than in Riga, Abols adds. Plus, companies operating in Liepaja have access to the widest labor force in the region 's 42 percent of Kurzeme's 134,000 inhabitants live in the port city.
Clearly the city holds much potential. And judging by Latvia's current economic trends, development outside Riga is a must. If things keep going as planned, Liepaja could become Latvia's Emerald City by the sea.