High-tech manufacturer to relocate to Estonia

  • 2004-03-18
  • Baltic News Service
TALLINN - LGP Allgon, an international manufacturer of electronic components, announced this week that it would relocate part of its Sweden-based production operations to Estonia this spring.

According to reports, LGP Allgon plans to launch its Estonian facility in the Tanassilma technological park outside Tallinn at the end of May.
The plant will provide about 180 jobs and is expected to reach full capacity in June or July of this year.
Later, in about a year's time, the company will decide how much of its production base will remain in Sweden and what role its Chinese branch will play, Goran Grave, manager of the Estonian plant, said.
Grave said that Estonia's advantages over Sweden and China were the country's lower tax burden and cheaper labor, as well as proximity to the East European market, where the company has many customers.
"It's much cheaper to produce [in Estonia] than in Sweden, while Tallinn is much closer to Europe than China," he explained.
The news is further evidence of the growing trend of companies based in EU countries moving to the Baltics after the latter accede to the European Union, particularly to Estonia, where the capital-gains tax is zero.
Headquartered in Sweden, LGP Allgon is an international concern whose principal lines of business are development, manufacturing and sale of products for the telecommunication industry and production of high-tech industrial electronic components by subcontracting.
The concern's annual sales total is approximately 200 million euros. It employs about 1,600 people in 13 countries.
LGP Allgon is listed on the Stockholm Stock Exchange.