International Business Intelligence: Lithuania

On the 16th of this month, Lithuanians the world over celebrated their homeland's National Day, so in our February issue, we thought it appropriate to focus on this relative newcomer to the EU and find out a bit more about both the country and its people. Our guide also looks into the types of industry which thrive there, plus gives some general advice for people who hope to develop business interests in this part of Europe. We've even included a few Lithuanian phrases to help you on your way!

First a few facts and figures

Lithuania is the largest of the three Baltic States and extends to 65,300 sq. km, making it larger than Belgium, Denmark, the Netherlands or Switzerland. 70% of Lithuania is made up of arable land and 27.6% is forest, predominantly pine.
There are several national parks which are the focus of increasing ecotourism, and Lithuania also has 99 km of Baltic Sea coastline which is used for a combination of leisure and conservation.
The climate is midway between maritime and continental, and the growing season varies between 169 and 202 days. In January the average daytime temperature is -5°C (23°F), rising in July to +23°C (80°F).
The major cities in Lithuania are Vilnius (capital - 542,300 inhabitants); Kaunas (378,900); Klaipėda (192,900); Šiauliai (133,900); and Panevėžys (119,700).
The population is around 3.5 million, with 67% living in urban areas and 33% in rural areas, and the ethnic composition is: 83.5% Lithuanians, 6.7% Poles, 6.3% Russians, and 3.5% people of other nationalities (Belorussians, Ukrainians, Latvians, Jews, etc.).
Lithuanian - comparable to Latin in its complexity - is the official state language, and Roman Catholicism is the main religion

Industry and commerce

Lithuania has the largest and most diversified economy of the Baltic states. Intensive industrialisation under the Soviet regime resulted in enterprises specialising in electronics, chemicals, machine tools, metal processing, construction materials and food processing. Light manufacturing includes the production of textiles, ready-to wear clothing, furniture and household appliances, although the textile sector is starting to suffer from competition by lower cost bases. Since 1990, the economy has attracted substantial investment in property, both "brown-field" and "green-field". Large-scale privatisation of many of the larger formerly state-owned enterprises and the infrastructures has also boosted investment and modernisation.
Services are the fastest-growing segment of the Lithuanian economy, and the transport and transit services are also dynamic. The country benefits from a good road system (improved with EU investment plus the Baltic states' only oil pipeline and refinery. Trading and retail are also growing fast, although there is increasing competition in this marketplace. Financial services are taking off, and tourism has also emerged as another fast-growing service industry.
The Lithuanian economy is very open and Lithuanian exports tend to have a high import content - which makes Lithuania an attractive market for foreign exporters of intermediate and investment goods. In recent years, Lithuania has also been an attractive destination for foreign exports of retail goods thanks to a sustained consumption boom.

Names worth knowing

By far the largest Lithuanian company and exporter is Mazeikiu Nafta (MN), which owns and operates Lithuania's oil pipeline and refinery, as well as the Butinge petroleum export terminal, situated on the coast. MN is jointly owned by Russia's Yukos and the Lithuanian state, but ownership is expected to change due to Yukos's withdrawal from the market. Other sectors with large players include the electricity network (some of which has been privatised), telecommunications (dominated by Lietuvos Telekomas), the food industry (particularly dairy products and beer), and banking (dominated by Vilniaus Bankas and Hansabankas, both controlled by Swedish banks). However, Lithuania's economic growth is broad-based and not dependent on the performance of a small number of enterprises. The SME sector is large and fairly vibrant.
The Lithuanian Development Agency (www.lda.lt) is responsible for investment and export promotion. The main business organisations are the Confederation of Lithuanian Industrialists (www.lpk.lt), the Lithuanian Business Employers' Confederation (www.ldkonfederacija.lt), the Association of Lithuanian Chambers of Commerce, Industry and Crafts (www.chambers.lt), and the International Chamber of Commerce Lithuania (www.tprl.lt). The main EU countries also have chambers of commerce in Lithuania.

Other useful information

Things not to do:
Lithuanians are generally easy-going, although they may be reserved at first contact. Business customs are similar to those in Western Europe, so there are no major pitfalls to avoid. However, most westerners have little understanding of the specificity of Lithuania's cultural heritage and the complexity of its history, and indeed many assume that Lithuanians speak Russian. This can be offensive to Lithuanians, who have a deep sense of nation and see themselves as Western Europeans. Show interest in the culture and history, and avoid taking sides in any historical debates involving Polish or Russian conquests or territorial claims.

Things to bear in mind:
Lithuanians are hard-working, and office hours are longer than in many parts of the EU (generally 8 am to 6pm). The international language of choice is English; most Lithuanians older than thirty also learnt Russian but could be reluctant to use it. The main holiday period is July/August. The Catholic holidays are also observed (especially Easter), as is independence day (February 16).
The national sport is basketball, which is an excellent talking point. The Lithuanian team is one of the best in the world. It is an Olympic bronze winner, and one of a select few to have beaten the U.S. national team. Lithuanian cuisine is northern European with some Russian and Polish influences. However, both Vilnius and Kaunas boast a good range of international restaurants, and business contacts are more likely to invite their guests for international cuisine than traditional fare. It is possible to find vegetarian options, but less easy than, say, in the UK.

Glossary

Hello - Labadiena
Good morning/evening/night - Labas rytas/labas vakaras/labanaktis
Goodbye - Viso gero
Pleased to meet you - Malonu
Please (yes please) - Prašau (prašyčiau)
Thank you (no thank you) - Ačiu (ne, ačiu)
Cheers (when drinking) - Į sveikatą!
See you again soon! - Iki pasimatymo!