By manufacturing a seemingly simple but high-quality product from raw materials available in Latvia, we are developing and building Latvia’s reputation as an export country in foreign markets. Andis Šķēle, Director of Baltic Block, reveals the company’s ambitions.
Export is part of Latvia’s image in the world
The woodworking industry has always raised a certain question — how to realise low-value timber and wood cuttings in order to use everything given to us by the woods as optimally and efficiently as possible. Other companies used to mostly utilise these materials in energy production, but we chose a different path. The idea was born about ten years ago, when, while visiting various fairs related to woodworking and export, we sensed that the manufacture of pallet blocks held a lot of potential. Moreover, it is an industrial and logistical product, which provides the opportunity to link new business directly with large foreign enterprises.
Certainly, it is not enough to just have an idea for a new company — the idea needs extensive investments and it has to be “disciplined” in terms of quality and service. Especially in the case of a company from our region. In Western countries, stereotypical notions of Latvia are still quite widespread — there is a view that we are a poorly developed post-Soviet state that does not have modern technologies and that the people living here have poor language skills. There were also doubts about our company’s longevity. Only as time passed and we were able to prove our work ethic and introduce people to the values held by Latvian companies was it possible to break these stereotypes. Every exporter from Latvia has contributed to this. We form the reputation of our country together. We were able to benefit from the fact that we are a family business and we can transfer our values into the work with our customers by forming a direct and individual approach that is based on trust.
2018 as a year of growth for Baltic Block
2018 has marked itself with a significant boost in business development. By investing more than 5.4 million euros, we have increased the number of production lines from 5 to 8, we have built new production facilities and modernised the dryer. The modernised factory gives us the tools that are required to successfully compete with the largest companies of the industry from Poland, Germany and Italy. By gradually increasing production capacity and quality, as well as investing approximately 30 million euros into the company over a span of seven years, we have been able to enter the markets of 25 countries, exporting to the USA, Qatar, China, United Arab Emirates and practically all of Europe.
Baltic Block has always been practising business that is orientated towards energy efficiency and sustainability, and this is directly linked to our success story. By implementing new technologies, we have raised the production efficiency coefficient by 30 %, and our factory consistently ensures high quality drying of chips, being able to dry them to a moisture level of 2 %. Drier chips provide a product of higher quality and durability. High efficiency is a quality factor that distinguishes our and Latvia’s name among others.
Business may also be born out of simple things
Four years ago the production capacity of Baltic Block was limited to approx. 4,000 m3 a month, whereas now we are able to produce and supply the world with 12,000 m3 of finished products each month. Moreover, despite the large increase in production capacity, the demand for Latvian product is so immense that we will only be able to start producing orders of new customers in the second half of the first quarter of 2019.
We are not planning to slow this pace, and we are already working on strategic development plans for periods of 2 and 5 years. The next two years will most likely be spent on getting to know the modernised factory and coming up with new ideas on how to make the manufacturing process more efficient. Over this period, we are also determined to enter new markets, such as Costa Rica, South Korea and Saudi Arabia, as well as increase our market share in the United States.
In turn, over the next five years we are planning on expanding production in the segment of pallet blocks, as well as composite materials. The new development plans will not only give us the opportunity to become the market leaders of Europe, but will also create new workplaces, thus facilitating regional development in Madona Municipality.