VILNIUS - At a time when many companies are going the other way, Rentokil Initial, one of the world's largest pest control companies, has decided to invest 10 million litas (2.9 million euros) into Lithuania over the next five years.
The investment comes amid comments by the British ambassador to Lithuania and Lithuanian Member of the European Parliament (MEP) Margarita Starkeviciute encouraging companies to invest into the country.
"We have made this investment in Lithuania as we were impressed by the potential of the market and the pace of growth of hygiene standards in all elements of Lithuanian business and commerce," said Phill Wood, the Rentokil European Area Managing Director.
Starkeviciute said comments by foreign banks had spooked many investors looking at Lithuania.
"In my opinion, statements that the situation in Lithuania is very bad, that we are standing on the verge of bankruptcy, are absolutely irresponsible and have truly negative consequences," she said during a news conference in Vilnius.
Some representatives of foreign banks had recently warned that investors were willing to pull out of Lithuania because of negative information about the country, the MEP said.
Small countries were now considered unsafe, leading to investments being shifted to larger markets, she added.
"Measures should be taken to bolster trust in the economy and there should be no changes 's either in the economic policy or the tax system," Starkeviciute said.
The British ambassador said the Rentokil Initial investment is a positive sign for Lithuania.
"At a time of worldwide economic downturn and challenging economic conditions in both the U.K. and Lithuania, I am delighted to see a British company continuing with its program of international investment and coming to Lithuania," British ambassador to Lithuania Simon Butt said at a press conference.
"This is a vote of confidenceâ€¦in the potential of the Lithuanian economy as a whole," he said.
Rentokil Initial acquired local company UAB Dezinfa, which employs around 100 people, to enter the market.
"We chose to go with Dezinfa instead of making our own company because they are already a recognized brand in Lithuania," Wood told The Baltic Times.
The investment is expected to indirectly create thousands of jobs in Lithuania by increasing the profile of the country.
During the Capital of Culture year, hotels will be perceived better and will attract more customers, the company said.
"Dezinfa currently has around 100 employees. This is not going to expand to 500, but by increasing the reputation of the country across the board, this will create thousands of jobs over the next few years," Iain Lawson, the Rentokil Baltic region director, told The Baltic Times.
Foreign investment in Lithuania will help the country deal with a growing unemployment problem.
Recent figures from the Labor Exchange show that the country has a 5.7 percent unemployment rate. The figure is expected to grow as high as 10 percent by the end of the year following an expected round of mass lay offs across the country.