“Our experience clearly shows that digitalization and automation are not just technological upgrades – they are a strategic necessity. By investing in modern equipment and digital solutions, a company can not only increase productivity and reduce costs, but also become more flexible, more sustainable, and better prepared for future challenges,” emphasizes Kaspars Elarts, owner of the industrial packaging manufacturing company SIA “Latvia Packing”.
Elarts founded “Latvia Packing” in Dobele municipality ten years ago after returning to Latvia following eight years in the Netherlands, where he gained experience in woodworking. Initially, the company employed only three people, and almost all work in the small 150 m² production facility was done manually. Over the years, “Latvia Packing” has grown significantly and become a strong example of how targeted investments in digitalization and automation can substantially improve a company’s efficiency, flexibility, and competitiveness in international markets.
The company is certified and specializes in industrial wooden packaging solutions, producing wood products compliant with ISPM 15 and IPPC standards. It also offers large-size full pallets and durable wooden boxes with high load capacity. “Latvia Packing” helps its clients develop the most efficient and cost-effective wooden packaging solutions tailored to specific requirements. The company also provides professional consulting and packing services related to export logistics. Currently, the company employs 40 people and operates actively in European markets – approximately 90% of its production is exported.
Digitalization and automation – a key driver of growth
“The company’s initial development was based on manual work and simple equipment. The first years were an intensive learning and adaptation period, during which we searched for the most efficient production solutions. Already at an early stage, it became clear that without automation, the company would not be able to remain competitive, especially given rising labor costs and competition in the European market,” the founder shares.
A decisive turning point came after the first two years of operation, when the company began actively using available support instruments and funds. This enabled gradual modernization and expansion of production, including the introduction of optimization solutions and automated lines.
One of the most recent and significant investments, co-financed by the European Union Recovery Fund, is an automatic stacking line connected to a board lengthening machine. The equipment automatically organizes and stacks processed boards, reducing manual labor and increasing production speed. This solution significantly improves work efficiency and ensures a consistent and high-quality flow of products for further processing or storage.
“Although the equipment was installed only this year, the results are already measurable. Production volume has increased by 15–20%, labor costs per unit have decreased, production costs have been reduced, and company profits have increased. It is important to emphasize that this efficiency gain has not led to workforce reduction. Instead, employees are retrained and involved in higher value-added processes,” the company’s manager highlights.
In addition to physical automation, “Latvia Packing” is actively implementing digital solutions in company management. A unified management system is currently being introduced, allowing real-time monitoring of production processes, sales data, financial indicators, and other key activities.
“Such a system significantly improves transparency and the speed of decision-making. Our future goal is to create a self-sufficient organization capable of operating effectively even without direct owner involvement in daily processes,” explains Elarts.
Flexibility as a competitive advantage
Another important benefit of digitalization and automation is the ability to respond flexibly to market changes. While previously a large share of production was sold to a single client, after the COVID-19 crisis the company deliberately diversified risks by cooperating with many smaller clients instead of relying on one major customer. “In other words, we no longer put all our eggs in one basket,” Elarts adds.
Improved efficiency allows the company to offer more competitive prices, which is a decisive factor in attracting new clients. As a result, the additional production capacity (15–20%) can be used to enter new markets.
Digitalization and investments have also enabled the company to develop by-product processing. Wood chips generated during production are used to produce briquettes, which are sold in the Baltic market. This means that virtually nothing goes to waste – all resources are used as efficiently as possible. This approach not only increases revenue but also improves the company’s sustainability performance.
The role of support instruments
Various national and European Union support instruments have played a significant role in the company’s development. The company actively cooperates with the Investment and Development Agency of Latvia (LIAA) and the Rural Support Service, using funding for equipment acquisition as well as opportunities provided by business incubation programs. From personal experience, Elarts highlights the importance of networking – building and maintaining contacts with industry professionals and institutions, which helps to identify new opportunities and projects in a timely manner. He also encourages other entrepreneurs not to hesitate to turn to business incubators, which are specifically designed to promote business development.
“Latvia Packing” does not plan to stop here. New projects are already being developed, and preparations are underway for further investments in digitalization. The goal is to integrate different equipment and systems even more closely, reduce manual labor, and increase efficiency. At the same time, the company sees new business opportunities in supply chains, where high-quality and secure packaging is critically important,” concludes the company’s manager.
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