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Country Commercial Guides FY 2000: Lithuania Report prepared by U.S. Embassy Vilnius, released July 1999 Note*

CHAPTER V. Leading Trade Prospects for U.S. Business

Strategically, Lithuania is an attractive gateway to larger regional markets, including Russia, Belarus and other Baltic countries. American products in Lithuania are associated with high quality and in many cases customers are more willing to buy them due to the American origin.

Lithuanian heavy industry is impaired due to the shrinkage of orders from countries of the former Soviet Union. At the same time there are signs of revival in light industry, especially in textiles and clothing manufacture, and in timber and wood industries. The best prospects for sales of capital goods are in these industries and in upgrading of plants producing electricity and supplying district heating. As loans to agribusiness become available, the market for food processing equipment will improve.

The best trade opportunities for agricultural products are items not produced in northern climates, including cotton, tobacco, rice, fresh and dried tropical fruit and seeds.

Best Prospects for Non-Agricultural Goods and Services

1. Computers and Peripherals
2. Building Products
3. Pollution Control Equipment
4. Medical Instruments, Equipment & Supplies
5. Drugs & Pharmaceuticals

Rank of sector: 1
Name of sector: Computers & Peripherals
ITA industry code: CPT

The computer and peripherals market in Lithuania is well developed and all major hardware and software suppliers are represented on the Lithuanian computer market. There are about 400 computer companies in Lithuania and approximately 20 of them dominate in the market, including IBM, HP and Compaq. Equipment and accessories from U.S. account for 80 percent of Lithuania's total annual imports in this sector. Lithuania offers potential trade opportunities for hardware and peripherals for Internet connectivity and on-line data information services.

Lithuania has accumulated a great deal of experience in developing software. This could offer great joint-venture opportunities for U.S. computer software companies. In addition to this costs of R&D in IT sector are relatively low.

Rank of sector: 2
Name of sector: Building Products
ITA industry code: BLD

The private sector in Lithuania is growing rapidly. During the Soviet years, houses and office buildings were allowed to deteriorate. As private ownership was introduced and the private commercial sector began to revive, a wide scale renovation of commercial and residential fixed property began. Virtually all products associated with building renovation and construction, e.g. paints, doors, windows, plumbing equipment, lighting, insulation materials and heating systems are in high demand.

Rank Sector: 3
Name of Sector: Pollution Control Equipment
ITA Industry Code: POL

Lithuania's environmental protection program began in 1992 when the Ministry of Environmental Protection addressed and prioritized all current environmental problems. Most of the measures included in the program, such as construction of wastewater treatment facilities in major cities, for example, have been implemented.

The awareness of the need to properly manage domestic waste has been noticeably growing over the past few years due to the extensive use of disposable packaging. Thus, modern recycling technologies are in great demand. Lithuania still has 954 storage sites containing 4,000 tons of old pesticides, which represent a serious ecological problem. Each year 1,700 tons of hospital disinfecting waste is dumped in the domestic waste sites. U.S. environmental technology companies could be very useful in bringing modern environmental technologies to solve these and other environmental problems. Water purification and wastewater treatment equipment and technology are also in demand.

Rank of sector: 4
Name of sector: Medical Instruments, Equipment & Supplies
ITA industry code: MED

The demand for high quality medical equipment and supplies is expected to grow due to an increasing percentage of elderly people in the population, constant appearance of new medical technologies and innovations, EU regulatory harmonization, and increased health awareness in the country. There are a number of hospitals in Lithuania which are in high demand of full scale technological upgrades and though due to the current financial difficulties most of hospital modernization projects have stalled, they will be resumed upon the availability of financial resources.

Rank of sector: 5
Name of sector: Drugs & Pharmaceuticals
ITA industry code: DRG

The Lithuanian pharmaceutical industry is small but the basis is strong. This sector was among the most advanced within the former Soviet Union, both in terms of production of final formulations and production of pharmaceuticals derived from animal sources. Lithuania at one time provided for up to 30 percent of the total Soviet market for insulin and other endocrine products. Traditionally Lithuanian universities maintain high teaching and training standards in the biological disciplines, which are key to developing pharmaceutical and biotechnological production techniques. The need to create a fully market-oriented pharmaceutical supply system is being emphasized. The objective is to provide access to affordable pharmaceutical products for Lithuania's population. The Government is seeking to attract foreign investment into the pharmaceutical-manufacturing sector in order to promote the development of such system. Lithuania's pharmaceutical industry offers low research, development and production costs for the new medicines.