Lithuania has invited Malaysian companies wanting to penetrate the growing European halal food industry to use the Baltic state as their hub or entry point and take advantage of its highly developed logistics infrastructure.
Its economic minister, Evaldas Gustas said Lithuanian logistical infrastructure contributes 13 per cent to the country’s gross domestic product (GDP) and the second highest in European Union (EU). Its strong economic ties with the rest of the EU states, meanwhile, can be of great benefit for Malaysian companies.
In an interview with Business Times here recently, he said Lithuania can re-export value-added Malaysian halal products to EU countries with strong halal markets such as France and Germany as well as to Russia and the Commonwealth of Independent State (CIS) nations such as Kazakhstan.
“A lot of products can be taken out from Malaysia and we can add value to them and market them with a made-in-Europe logo for better market penetration,” said Gustas, who is also the current chair of the EU Competitive Council.
The Lithuanian economic delegation, who made an official visit to Malaysia earlier this month, has met with Sime Darby Bhd and invited the company to consider building a palm oil refinery in Lithuania to kick start the halal food production.
“We see great potential for palm oil in the halal food production and Sime Darby has been receptive to this idea and may potentially send a team to our country,” Gustas said.
The minister, during his five-day visit to Malaysia, has also met with Petroliam Nasional Bhd president Tan Sri Shamsul Azhar Abbas, offering the national oil company an opportunity to venture into the supply of LNG business in Lithuania. He also met with national carmaker Proton Holdings Bhd to explore research on electrical vehicles.
Another potential sector Lithuania is offering to Malaysian companies is tourism.
Gustas said his delegation has met with some local companies interested to develop and operate a five-star luxury hotel in Lithuania, where a hotel of such is high on the demand list of the rich Russians and CIS nationals.
Lithuania offers attractive tax incentives for foreign companies setting up their operations on their economic zones including zero corporate tax for the first six years and zero tax for the land.
“It has to be noted that we offer one of the lowest corporate tax in the EU, at 15 per cent,” he said, adding that of other Asean countries, Malaysian companies were preferred due to their experience, good track record and fluency in the English language.
Lithuania’s economic relationship with Asian has so far been limited to China and Japan and to date, only 0.2 per cent of its exports are to Asia, while Asian companies have yet to be interested to venture into Lithuania.
“We also see great opportunities for our companies to use Malaysia as a hub for the Asean market due to not just your stable political situation but also the developed infrastructure and business friendly government.”
In the first six months of this year, Lithuania’s exports increased by 12 per cent and it is already 44 per cent above the pre-crisis level of 2008. However, Gustas said the country’s exports have been too dependent on the EU and the CIS region, at 53 per cent and 37 per cent, respectively.
Lithuania, which joined the EU in 2004, posted a GDP growth of 4.1 per cent in the first half of this year, a marked improvement from 3.6 per cent growth for the whole of 2012.
Source: Business Times