The city of Valmiera, Latvia, introduces a strategy for developing industrial territories

The document states the priority activities and aspects to be implemented in the city in the next 20 years to attract foreign and national direct investment. The Valmiera Development Agency has developed the document within the project “Next Generation Micro Cities” of the EU Urban Innovative Actions initiative.

Valmiera – the European city of the future

Valmiera has always been a city of rich industrial traditions and the national leader in output produced per capita. Our results exceed Latvia’s average data two times. Valmiera is a thriving knowledge, talent, and financial centre.

Jānis Baiks, the Valmiera City Municipality Council Chairman, says: “Valmiera’s ambition is to become a talent magnet city. I believe that attracting inward investment is the key to this. Healthy companies, favourable entrepreneurial environment, consistent support system, incentives and close cooperation among entrepreneurs, educational institutions and the municipality will bring us towards our goal. We will continue to invest resources in people, infrastructure, new territories, healthcare, sports, culture and quality of life. We will continue to provide a superb support system, and we will always make investors feel at home in Valmiera.”

Valmiera is an FDI success story. According to the Financial Times in 2018 and 2019, Valmiera was the 3rd best European micro-city for its FDI strategy. In 2020 and 2021, Valmiera ranks fourth.

The industrial territories development strategy

The tasks of the industrial territory development strategy were:

• to identify the factors that investors consider when choosing a particular target country as their investment location;
• to identify future industrial territories in Valmiera city,
• to identify sectors specifically to be developed in industrial areas,
• to identify educational programmes to be developed in the context of attracting investment in specific sectors,
• to identify the advantages and disadvantages of Valmiera by performing the analysis of other Latvian and foreign industrial parks, as well as the analysis of various available resources,
• to identify the management model as well as services to be provided to investors,
• to identify partners and other stakeholders,
• to prepare an investment attraction action plan, financial plan, and guidelines for marketing strategy.

Factors determining investor choice

The study found that three groups of factors mainly determine investor choice. The first group of the elements is related to economic factors as motives of the investor. Most investors are interested in the investment site as a market (size of the local market, supply opportunities to broader markets), as a source of available resources (availability of labour and skilled labour, availability of raw materials, availability of the infrastructure - built area, roads, connections, buildings and premises) or as the possibility of cost reduction and cost efficiency (lower labour and skilled labour costs, cheaper raw materials or energy resources, more affordable infrastructure).

The second group of factors is foreign direct investment policy and environment, namely economic, political and social security and stability, entry rules, market functioning structure and system, treatment of foreign investors, the conclusion of international agreements, financial conditions, tax policy.

The third group of factors is the fostering of entrepreneurship and the support available to investors, namely various investment promotion services, investment incentives or grants, tax incentives and the existence of SEZs, social amenities and quality of life, and business support services.

Future industrial areas

The strategy identifies an area of approximately 120 hectares for the development of industrial territories in Valmiera. The industrial domains form three clusters on the map: Industrial and Export Park (former meat processing plant territory), Valmiera Industrial Park (part recovered from the state in the south of the city), as well as industrial territories near the Business and Innovation Incubator building. Extensive construction works have now been started in the Industrial and Export Park to arrange the territory in the area of ​​17 hectares. The available square meterage of the existing buildings is ​​42,000 m2. The first new production building of 4000 m2 in the Industrial and Export Park will be available to investors in 2022.

Industries to be developed in industrial territories

An extensive sectoral analysis was performed as part of the study. The following sectors were identified as industries to be developed in industrial areas: production of glass fibre products and construction materials, production of wood and paper products (especially for wooden multi-storey buildings), mechanical engineering and metalworking, energy production and material processing, information and communication services, electrical engineering and electronics production, storage and support activities for transportation, food and beverage production. Smart solutions for industry, as well as the principles of greening, digitalisation and the circular economy, will be introduced in industrial areas.

An offer of educational programs corresponding to the needs of industry

With the rapid development of industrial areas, the number of new jobs in certain areas and professions must also increase rapidly. An essential contribution to achieving this goal is provided by the development of existing and new educational programs and educational offer, ensuring an increase in the number of students in the city and, consequently, in the number of new jobs. Calculations of the strategy estimate that, compared to the current situation, the number of students in higher education should increase by almost 50%, in vocational secondary education by nearly 60%, and in professional life-long learning education by almost 90%.

In addition to existing education programs, the higher education sector needs to develop following programmes: circular economics and engineering, mechanical engineering, environmental engineering, sustainable production and production management engineering, sustainable construction engineering, and new, smart materials science and materials engineering.

In the field of vocational secondary and professional life-long learning, in addition to the existing education programmes, the schools must introduce programmes to learn following professions: material production manager and foreman, renewable energy technician, meat and meat product technician, food processor, building builder, woodworker, processing plant operator and equipment operator, automated line operator, loading equipment operator, mechanic, electrician, warehouse worker, farm manager, customer service specialist, procurement specialist, digital marketing and new media specialist.

Vidzeme University College, Valmiera Vocational Training Center and Valmiera Secondary School of Design and Art are the most critical partners in the field of education in the city. Valmiera should also further develop cooperation with other educational institutions in Vidzeme, Latvia and abroad.

Advantages of Valmiera

The production of fibreglass products is one of the unique primary advantages of Valmiera. It opens vast development opportunities for other industries, such as construction, production of composite materials and others that use fibreglass thread and products. Companies also highly value the municipal rental housing programme, the municipal innovation support programme and the rank awarded to Valmiera by the Financial Times for the city's investment strategy.

Valmiera also benefits from proximity to two major markets (European Union and Russia), access to resources and raw materials, especially timber, building materials and food production, well-organized infrastructure, opportunities for cost reduction and higher cost efficiency, available support to attract funding from various funds, and excellent investment environment (security, investment policy, economic growth, low taxes and attitude towards investors).

The strategy also identifies many future benefits for the city, as well as major future industrial, educational and business support projects.

Development of industrial territories

The strategy includes a comprehensive analysis of alternatives for developing, administrating, managing the industrial territories. It also defines services to be provided by the industrial site operator to customers and includes an action plan and a financial plan.

The services for investors include infrastructure services (e.g. tenant recruitment, utility services, building overhauls, technical maintenance, an adaptation of premises, further construction of buildings and infrastructure), innovation services (e.g. research infrastructure, co-creation infrastructure) and business support services (e.g. fundraising, consulting, networking, staffing, accounting and legal services).

The city is gradually starting the implementation of the strategy for developing Valmiera industrial territories, mainly implementing and using the funding of the project “European Next Generation Small Cities”. In cooperation with the Financial Times, the city has developed and launched the database of industrial territories INVESTINVALMIERA.EU. The Valmiera Development Agency will soon present a digital visualization for the Industrial and Export Park. A global investment attraction campaign will be launched in November. A digital marketing campaign will be launched in spring of 2021.

Valmiera Development Agency invites owners of territories, industrial buildings and office buildings to communicate about cooperation and opportunities to place objects owned by them in the INVESTINVALMIERA.EU, the database to attract foreign and national investments. Contact person at Valmiera Development Agency: Business project manager Mrs Māra Rudīte, mobile phone +371 26454562, mara.rudite@valmiera.lv).

Further information on the strategy:

Mrs Ilze Eglāja

Head of the Board

Valmiera Development Agency

Ilze.eglaja@valmiera.lv