Production Development in the Port Will Make a Significant Contribution to the National Economy

Along with changes in global transport flows and the economic situation of our region, the Port of Riga is changing as well in order to maintain its cargo turnover and successfully compete with other ports of the region. One way of ensuring jobs, earnings and a stable cargo turnover is to promote production and increase the share of production-related cargoes in the port.

“We are currently on the threshold to opening the door to the next decade. The future vision of the port’s development is outlined in the Freeport of Riga Development Programme 2019-2028, which sets production development in the port as a priority. Production in the port promotes synergy with cargo transport. Cargo flow and containers related to production guarantee a more stable and long-term attraction of cargo volumes to the port”, said Ansis Zeltiņš, CEO of the Freeport of Riga. 

In developing the Freeport of Riga Development Programme, the experience of the Port of Rotterdam, with features similar to those of the Port of Riga in terms of cargo conditions, as well as similar management models, was studied and applied. The Port of Rotterdam is known mostly as the largest container port of Europe; however, it is also a large industrial territory with successful production companies operating in various sectors. Production in the Port of Rotterdam began developing in the first half of the previous century and today, approximately half of almost 470 million tons of cargo handled per year is related to production activities at the Port of Rotterdam itself. 

Carlos O. Zepeda, Project Manager and Analyst of the Port of Rotterdam Authority, tells about the experience of the Port of Rotterdam in production development: “People often forget that the port can be not only a place for cargo-handling, but also a production base, with plants and companies. Production activities generate both cargo flows and significant income to the port. With the transport sector and the port infrastructure developing, competition among ports keeps growing. The Port of Rotterdam competes with the ports of Hamburg, Amsterdam and Antwerp. For example, containers: one day they may come to our port, but once some other port reduces its tariffs — they will be gone. And everyone in the port sector understands that if there are no cargoes, there is no port, either. However, if there is production in the port, cargoes will not disappear. Production ensures a certain base for cargo volumes and investments in the development of infrastructure”.

It must be taken into account that production also creates more jobs than cargo handling. Zepeda continues: “The liquid cargo terminal at the Port of Rotterdam employs 3 to 4 persons per hectare, whereas the neighbouring chemical plant employs 8 to 15. Production creates greater added value from the point of view of both business and society. Moreover, modern cargo terminals are fully automated. Our port already has two container terminals where the handling process does not involve a single person. Automation will inevitably persist; therefore, the number of jobs in the segment of cargo handling will continue to decrease”.

Another significant feature of the Port of Rotterdam is production clusters. “In planning production development in the Port of Riga, this experience will definitely have to be taken into account”, the expert is convinced. “The creation of clusters has various advantages. This means smaller investments for companies, as all the principal infrastructure is already available. Moreover, the surplus of one industry is the resource of another industry, which is available without great logistics costs”, Zepeda adds.

Production development in the port may make a significant contribution to the entire national economy, the representative of the Port of Rotterdam believes: “In such a small market as Latvia, it is crucial to create production and your own market. We saw similar development in Oman, which is also a small country surrounded by big neighbours. There, production development in the port created a market, which attracted investments and created jobs”.