Chapter 4: Lithuania

(continued)

4.8 The Local Environmental Business Sector

Profile of Environmental Businesses

The majority of environmental businesses in Lithuania are privately owned (65 percent) or are being privatizated. Respondents from state-owned companies expressed dissatisfaction with the bureaucratic system that hinders them from operating like normal businesses, and they expressed a desire to switch to private ownership.

Three-quarters of environmental businesses in Lithuania were established after 1990. Many of these companies were renamed or re-established as a result of the political changes, hence their relatively young age.

A negative reaction was expressed by respondents when asked to disclose the amount of their turnover; however, 25 percent of companies said they have an annual turnover of more than USD 1 million.

Most Lithuanian environmental businesses offer services (88 percent), either in addition to or instead of environmental technologies. Some of those Lithuanian companies offering environmental technologies and services have already entered other markets abroad, such as Russia, Belarus, Ukraine and Poland; however, income obtained from foreign activities rarely exceeds 25 percent of total annual turnover.

The majority of environmental businesses comprise fewer than 50 employees (67 percent) and therefore can be considered small to medium-sized. One-fifth of the surveyed environmental businesses have more than 100 employees. These companies have generally been operating in Lithuania for at least 30 years.

Information Channels and Needs

In order to share important information and experiences, specialized unions and associations were established such as the Association of Water Suppliers, the Association of Engineers and the Engineering Ecology Association, etc. Approximately 80 percent of the respondents belong to one of these associations. The associations are listed in Table 4.25.

Information on new environmental technologies is in the highest demand because companies are interested in following developments in their own fields. The next most important information requirement concerns changes to in-country environmental regulations. Information concerning domestic tenders for projects is indicated because it is directly related to business opportunities, although no unified system for tender announcement exists. An issue worth mentioning in reference to Environmental Quality for Industries (e.g. ISO 14000 and EMAS) is that environmental businesses seek information about these new environmental systems as potential for future business. Information needs included employee certification, database or comprehensive source on environmental services and technology providers and the financial status of customers.

The relatively low demand for information on international tenders for projects can be explained by the fact that some local companies are not strong enough to compete with foreign companies and therefore their interest remains low.

Obstacles to Further Development

The other obstacles listed in Table 4.27 were said to have very little influence on business development. Companies do not feel the pressure of foreign competition because many of them include representatives of foreign companies or are involved in joint ventures. Foreign companies usually tend to be active in national projects such as the Kaunas City Wastewater Treatment Plant. Today general access to information is not the obstacle it was two years ago. Environmental businesses do not believe the lack of lobby groups is a barrier to their development. Other obstacles cited were low living standards in the country and insufficient information on employee certification.