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Devold of Norway to invest in Lithuanian industrial park

07
Jan '12

Norway-based Devold Textiles, manufacturer of sports and leisure wear and protective clothing from wool, will become one of the first investors in the Panevezys industrial park coming up in central Lithuania.

The prospects of the industrial park being upgraded to free economic zone (FEZ), that will benefit the company in the form corporate income tax (CIT) breaks, is the main reason for Devold's decision to invest in Panevezys.

Devold would be investing LTL 34 million for the construction of the new plant on an area of 6.5 hectares.

Currently, Devold's production facilities in Lithuania are spread on four rented locations in Panevezys and Kupiskis. Initially, the company would consolidate its production facilities in its own building, which would result in relocation of 260 existing jobs.

In a span of three years, the knitwear producer plans to create another 100 jobs.

To increase its cost efficiency further, the Norwegian company plans to utilize its Panevezys plant as a logistics base from where its products can be shipped directly to other European countries.

Currently, Devold ships all its Lithuania-made goods to Norway and from there they are distributed across various trade channels. Although most of the products are sold in Norway's domestic market, Devold now plans to expand sales in other European markets.

Devold estimates the new plant to be operational by the end of 2013 or beginning of 2014.

Devold of Norway dates back to 1853 and is the oldest manufacturer of knitted garments in Norway. It has been active in Lithuania since 1998.

Under Lithuanian law, companies setting up manufacturing plants in area demarcated as FEZ get a pool of benefits. These include a zero-rate CIT for the first six years upon investment reaching 1 million euros and a 50 percent discount on the prevailing CIT rates for the subsequent ten years.

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