The Secret to Entrepreneurial Success at Latvia’s Eastern Border

Latvia’s eastern regions have always had a special aura. Incredible hospitality, numerous lakes, some of the country’s tallest hills, linguistic variations, and, above all, entrepreneurs with enormous grit.

Being at the country’s and the EU’s eastern border is not the easiest place to build a business. Distance from major economic hubs, a smaller labour pool, lower incomes, and geopolitical uncertainty all create additional challenges. But for some companies, these challenges fuel growth, inspire international success, and motivate them to bring value not only to their businesses but also to local communities.

A region with room for growth

Latgale is home to around 18,000 active businesses, ranging from small farms and fisheries to large industrial manufacturers. Despite declining population, this number has increased steadily over the years. Manufacturing is the region’s leading sector by turnover, while agriculture, food production, and forestry are among its defining industries.

Further north, northeastern Vidzeme shares many of the same characteristics: vast forests and agricultural land, strong manufacturing traditions and a relatively small population. New and successful businesses here create opportunities for locals to build a career without leaving home and strengthen long-term regional resilience.

Beyond state support initiatives, however, successful businesses here have something else in common: a strong connection to their communities, a willingness to adapt, and the ambition to look far beyond the local market. These three companies serve as an example how challenges of the border can be turn into opportunities for growth.

Three businesses, three ways of thinking

In the small village of Jaunlaicene in Alūksne Municipality, CEWOOD has built an international manufacturing business around wood wool panels used in architecture, construction and acoustic design. Its new production facility represents a €25 million investment and is designed to triple production capacity to 4.7 million square metres of panels a year, with products exported around the world.

Yet CEWOOD’s story begins with a distinctly local motivation. The company has grown from a small team into a workforce of almost 200 people, while its products have found customers in dozens of countries.

“The border is not an obstacle, it is an opportunity. We cannot move the border; it has been there all our lives. Sometimes it seems that people who have grown up in the region are more resilient and think more about the safety,” the company says, highlighting its connection to Alūksne and its desire to create jobs and strengthen the local economy.

The company has responded to the region’s challenges by investing in production efficiency, employee development, and cooperation with educational institutions. Remote work has also allowed CEWOOD to attract office-based specialists from across the country, and the company’s strong reputation overall makes new talent increasingly seek employment there.

Most importantly, CEWOOD has never allowed its location to define its ambitions. “If a company creates a quality product, thinks globally, and invests in people, its location becomes an advantage rather than a limitation,” CEWOOD says.

Near Baltinava, Kotiņi offers a different example of how a business can grow from its local foundations. They started out as a small farm that has now developed into an enterprise with a full production cycle, processing capabilities and 5,400 hectares of agricultural land.

For the people behind Kotiņi, leaving the region was never a valid option. “We were born and raised here; this is our home,” they explain. The company’s growth has therefore been closely connected with a broader goal—to create jobs so that local people can build their families, make a living, and help prevent the depopulation of Latvia’s eastern border region.

Adaptability has been equally important. Kotiņi has invested in modern machinery and automation to make its operations more efficient and has responded to changing conditions by diversifying its activities. One major step has been transitioning of its entire 5,400-hectare operation to organic farming.

The company now sees further potential in increasing the added value of its products and developing tourism alongside agriculture.

Its advice to other entrepreneurs is straightforward: “Believe in what you are working towards, work persistently and, above all, be able to change.”

Further to the south, in Daugavpils, Nexis Fibers represents a third path: building on industrial expertise accumulated over generations. The company has operated in Latvia’s second-largest city since the late 1960s and, as the only company of its type in the Baltics, has maintained a specialised knowledge base in chemical fibre production.

To proactively address the shortage of specialised labour, Nexis Fibers has built its own talent pipeline. The company runs internal training and supports employees in gaining relevant qualifications and further education. At the same time, it has invested around €7 million in new, more efficient equipment since 2022 and diversified approximately 20% of its production, helping it maintain its position in European and US markets.

The next phase is already being planned. Nexis Fibers intends to invest further in renewable energy systems and modernise ageing equipment, with approximately €10 million in investment planned by 2030. These investments are intended not only to improve efficiency, but also to support new products, global competitiveness and additional jobs.

A look ahead

Creating a successful business in Latvia’s eastern border region is just as possible as anywhere else in the country. It requires courage and determination to get started, and ambition to keep growing. Ensuring that more companies can grow and invest here, however, will require confidence in the region and cooperation beyond individual businesses — between entrepreneurs, municipalities, educational institutions and national authorities.

As Nexis Fibers puts it, entrepreneurs should not limit themselves: “We can go as far and achieve as much as we are able to imagine. Do not be afraid to take risks, because the greatest failure is not trying.”