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International review: business on the border of three countries

It is very little time remaining until one of the key international events in Grodno region. We are talking here about the Republican festival of national cultures, which starts in Grodno on June 1st. On the eve of the holiday, we are launching series of articles “International Review”, where we will familiarize business of Grodno region with the potential of near and far abroad countries. The first release will tell about cross-border partnership between Poland, Belarus and Lithuania.

Historically, Grodno region has close economic and cultural relations with Polish and Lithuanian regions. In recent years, they got a new impulse in development, expanding the list of successfully implemented joint projects, among them traditional festivals on the territory of Augustow Canal, business, scientific and educational forums.

With the introduction of visa-free regime in October 2016 on the territory of Augustow Canal and the city of Grodno, cross-border cooperation reached a qualitatively new level. The successful start of the ambitious project allowed extending visa-free operation to the international airport Grodno and the railway station from the first day of 2018. Visiting Grodno and surroundings is even easier. This opportunity has already been used by over 70,000 tourists and businessmen. 98% are citizens of Poland and Lithuania.

In economic relations of neighboring states, significant potential is visible in many sectors, from woodworking sphere to the development of tourist and recreational services. Currently, 11 companies with Polish and Lithuanian capital of well-known brands ARVI, OT Logistics, Mispol, Atlas, PCC have been registered as residents of free economic zone (FEZ) Grodnoinvest. Since 2002, about 120 million dollars from Poland and Lithuania have been attracted into the development of modern production facilities on the territory of FEZ Grodnoinvest .

Economic indicators also speak for themselves. The sales turnover between residents of FEZ and Polish companies has increased by 79% since 2015, with Lithuanian - by 55%, in total exceeding the mark of 175 million US dollars. This is a fifth part of the total turnover of FEZ Grodnoinvest residents by the end of 2017.

Woodworking products (chipboard, fiberboard, furniture, mattresses, paper and cardboard), chemical industry (acids, fertilizers), garments, insulated wires were basic for export deliveries to neighboring countries. Chemical threads, machinery and equipment, tanks, knitted fabrics, etc. are imported to FEZ.

Growth points

Economy of our neighbors show steady growth and stability. In the next five years, construction boom is predicted in Poland and revitalization of the building materials market in Lithuania. In 2018-2019, the influx of funds from the European Union support funds to economy of Lithuania is expected to increase.

The dynamics of the development of cross-border partner markets, the absence of customs barriers and the expansion of industrial production in Lithuania and Poland open up new areas for cooperation. This is in the first place:

  • glass industry (due to increased demand for float glass);
  • woodworking production (including finished furniture);
  • plastic, metal products, chemical products;
  • building materials (including cement);
  • food products, HoReCa sector (hospitality industry, catering).

There is an import increase to Poland on perspective positions for Belarusian companies:

  • motor vehicles;
  • road tractors, steering wheels, columns and boxes;
  • accessories for bodies of motor vehicles, parts for internal combustion engines;
  • parts for transmitting and receiving equipment;
  • statistical converters.

About 770 commodity items supplied by companies from Belarus to Poland are not subject to customs duties, for the remaining positions it does not exceed 12%.

New forms of cooperation

The companies of Poland and Lithuania did not stay aside from the general European trend for clustering - the unification of competitors within one or more related areas or within a specific territory to unite and strengthen their advantages and increase the competitiveness of the products or provided services.

For example, in Poland there are about 130 regional clusters, uniting more than 6,000 participants, the vast majority of which are representatives of small and medium-size businesses. The participation of Belarusian companies in such structures will help to make a name for oneself at the foreign market and offer competitive and high-quality products, services or competences for cluster participants, find reliable partners and define a startup platform for entering the growing European markets.

There is no doubt that the development of relations through various associations, clusters and unions will allow to achieve results effectively and accurately, among which entering foreign markets and increasing export, scaling up business and strengthening the competitiveness of products or services.

Over the past year, the Administration of FEZ Grodnoinvest has concluded 8 Memorandums on Cooperation with representatives of business, science and government of Poland and Lithuania. 70 business events in Belarus and abroad have been organized, half of which were meetings with cross-border partners.

Thereby, today we can confidently say that the cooperation of three countries is expanding steadily, striving to conquer new economic peaks. Now is the time to give business cooperation a new impulse, because there are more than attractive conditions at the market. The administration of FEZ will provide competent support for the implementation of projects in industrial, logistic and tourist spheres on the territory of FEZ and park Augustow Canal.