WOOLLEN YARNS: Danspin Mulls EUR 11m Investment in Raseiniai20 Jun 2011 • by Natalie Aster
If anyone thought that Lithuania's days as a textile producing nation is over, news2biz can prove them wrong. Danish Danspin, a leading European supplier of woollen yarn for carpet makers, is mulling a new large investment in Lithuania that might mean an extra 200 workplaces in Raseiniai, 90 km west of Kaunas.
"I cannot say very much at this time. We have production in Denmark, Estonia and Lithuania, and we have established that if we are to grow, it must be in Lithuania," says Lars Pedersen, CEO of Danspin, to news2biz.
No aid yet, just LoI
"We have been in contact with the state investment organisation in both Estonia and Lithuania and Lithuania is the location where we are seen as the most integral part of society." Pedersen confirms that the investment scope in the initiative is more than EUR 11m, but declines to say more about the actual contents of the plans at this time.
Asked about the consequences of the investment in Lithuania for Danspin's manufacturing unit in Estonia, Pedersen says that he believes the expansion will have only positive consequences and there are no plans to close down the unit in Sindi in south-western Estonia.
At the same time, it seems that the Lithuanian economy ministry is ready to offer an LTL 5m state guarantee to Danspin's expansion project. Although the press release about the would-be investment from the ministry of economy stated that an order of disbursing the aid has been signed, it is not so yet.
"The ministry only has a letter of intent signed with Danspin. The firm will now have to draft and submit a formal aid application with project details with the local EU aid agency Lithuanian Business Support Agency LVPA under the Invest LT+ aid scheme for foreign investors who are ready to create high added value investments. If the application is approved, the aid will be allocated," says Laura Sebekiene, spokeswoman for the ministry, to news2biz.
According to the ministry, the investment project will include a new production unit and an R&D facility. Lithuanian Danspin's CEO was cited in local media that production would at least double with the expanded plant whose construction is scheduled for completion in 2014.
Danspin is owned by Lars Pedersen who took over the company in 1997. It used to have production both at its headquarters in Ikast and in Holstebro in Western Jutland, but the unit in Holstebro has been closed down. Danspin started its spinning activities in Raseiniai in 2003.
The Estonian facility is primarily a dying unit. So far Swedish-owned Systemair (ventilation), US-owned Viltechmeda (medical equipment), and US Western Union (financial services) have been granted a total of LTL 12m under the Invest LT+ scheme.
Applications by UK-owned Euromonitor International (market research) and German-owned SCT Lubricants (motor oil, filters) are being assessed.
The above news abstract has been taken from a bi-weekly newsletter to professionals doing business in Eastern Europe "news2biz – Manufacturing".
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