Latvian President Edgars Rinkēvičs, who is on a four-day working trip to South Korea from Wednesday, said on Friday he hopes for deeper cooperation between the two countries in the pharmaceutical, biotechnology, defense and advanced manufacturing sectors.
“Latvia is a European biotech hub and Korea has a rapidly growing biotech industry. If we cooperate, we can generate significant synergy,” he said in an interview with The Korea Economic Daily.
He proposed enhancing overall business cooperation between the countries at the Latvia-Korea Business Forum 2024, hosted by the Latvian government and the Korea Economic Daily.
The business forum, held in Seoul, brought together Latvian President Rinkēvičs, Sohn Kyung-shik, chairman of the Korea Employers Federation and over 80 business leaders from the two countries.
Business leaders sought areas of cooperation in the defense, energy, pharmaceuticals, biotechnology and cultural industries, organizers said.
Participating companies include multinational firms operating in Latvia such as hydrogen-powered aircraft maker Pocor NextGen of the Netherlands, pharmaceutical firm GreenDex, and defense and drone maker Edge Autonomy of the US.
Korean firms that attended the forum include Hanwha Aerospace Co., LIG Nex1 Co., Korea Aerospace Industries Ltd. (KAI), Doosan Enerbility Co. and Samsung Bioepis Co.
A GOOD PARTNER FOR KOREA
President Rinkēvičs said Latvia can be “a good partner for Korea” to enhance the competitiveness of Korean businesses.
“Interest in Korean companies is growing in Latvia,” he said.
During his stay in Seoul, the Latvian president had a summit meeting with his Korean counterpart Yoon Suk Yeol on Thursday.
At the summit, Rinkēvičs presented Latvia as a strategic gateway for Korean companies seeking to enter the European market.
Latvia is home to prominent pharmaceutical firms such as PharmIdea and OlainFarm.
According to Seoul’s presidential office, the two leaders also explored the possibility of cooperating in the artificial intelligence sector,
Rinkēvičs stressed the importance of boosting Latvia’s defense capabilities in light of the Ukraine war and expressed willingness to cooperate with Korean defense companies in advancing Latvia’s defense capabilities.
Yoon said Korea can be a “reliable partner” in Latvia’s efforts to bolster its defense capabilities, while Rinkēvičs expressed interest in collaborating in air defense systems and drone technologies.
DEFENSE, SHIPBUILDING
At the forum, Fredrick Riker, chairman of Edge Autonomy, said, the company has built more modernized facilities in Latvia than in the US. He urged Korean companies to explore partnerships with Latvia.
Mārtiņš Baumanis, the Latvian Investment and Development Agency’s head of representative in Korea, said that as a leader in military technology, Korea is in a strong position to collaborate with Latvia.
“Initially, Latvia aimed to raise defense spending to 3% of GDP by 2027, but we’ve already achieved this target this year,” he said.
The Baltic region, where Latvia is located, is known for durable, highly insulating wood products.
Latvian birch plywood is widely used for LNG carrier insulation.
Valdis Kulpe, director of Latvijas Finieris, a leading Latvian plywood product maker, said the company’s insulation technology is used in 182 LNG carriers, including vessels made by HD Hyundai Co. and Samsung Heavy Industries Co.
He said the Latvian company’s supply volume to Korea has quadrupled to 30 million euros this year from 8 million euros in 2022.
TAX INCENTIVES, INVESTMENT OPPORTUNITIES
Industry officials said Latvia strives to attract Korean investors with its efficient tax policies.
The Baltic country ranked second globally in the 2023 tax competitiveness index surveyed by the US-based Tax Foundation. In the corporate tax policy segment, it ranked first.
Baumanis said Latvia’s tax philosophy focuses on encouraging entrepreneurship. He added profits from reinvestment in the country are tax-free.
Foreign direct investment in Latvia surged from 11.05 billion euros in 2013 to 24.6 billion euros in 2023, growing at an average annual rate of 10%.
Latvia is emerging as an economic hub in the EU bloc with a per capita GDP of $23,184 in 2022. Sharing a border with Russia, Latvia has strong potential for collaboration in defense and energy sectors, analysts said.
By Han-Shin Park, Tae-Ung Bae and Jin-Gyu Maeng
phs@hankyung.com
In-Soo Nam edited this article.
