RIGA - The Belgian company Spanogroup will most likely scratch plans to build a 250 million-euro production plant in Latvia, as the state is unable to ensure the necessary support, a newspaper reported last week. The Dienas Bizness daily claimed that Spanogroup was planning to set up a new lumber plant in Eastern Europe, as demand for various timber materials is growing each year and local producers have been experiencing shortages of raw materials in recent years.
Spanogroup is currently eyeing Lithuania, Hungary and Poland as potential sites, the paper reported, adding that the company only has plants in Belgium though it sells throughout Europe, including the Baltics.
Latvia has been considered a potential site for the new plant. As Egils Martinsons, board chairman of Latbord, the company representing Spanougroup, said, "Latvia has all the preconditions for building a new plant, as the annual growth of timber is higher than the amount of logging, and wood leftovers, such as shavings are available for prices that would be acceptable for producers."
He said that Skrunda, in western Latvia, was chosen as one of the most suitable locations. However, the investor wants state support to amount to 34 percent of the total investment sum, but Latvia did not possess instruments for contributing the money. What's more, the situation did not change after the investments planned for the project were reduced to 135 million euros, Martinsons explained. "I still hope that Latvia has not lost the board plant project for good," Martinsons said, adding that a glimmer of hope appeared when Economy Minister Aigars Stokenbergs emphasized the necessity to support companies making products with high added value.
If the Latvian plant materialized, Spangroup would export products to Russia and Scandinavia. The company would export 100 million euros worth of its products per year from Latvia, the newspaper said.