Translated using ChatGPT service.
The Development Financial Institution ALTUM, within the European Union's Recovery Fund co-financed business digitalization program, has so far approved projects totaling 31 million euros, supporting 51 projects to date. Companies are utilizing the program's funding for both the acquisition of automated production equipment and process digitalization.
The Recovery Fund's digitalization funding is still available, and ALTUM, together with the European Digital Innovation Hub, invites interested parties to watch a webinar on the program's benefits, which will take place online on September 25 at 10:00 AM. The link to the event is here.
The business digitalization support program offers an attractive financing solution—with a capital rebate of up to 35% of the project costs to write off the ALTUM loan principal. "This is a great opportunity for companies to digitalize processes and modernize solutions, thus gaining a competitive edge," says Ilze Zandberga, the head of the program and ALTUM's regional manager in Kurzeme.
The fixed interest rate for the program's loans starts at 2.5%. Of the approved projects, 13 have loan amounts between 100,000 and 200,000 euros, 19 projects between 200,000 and 500,000 euros, 12 projects between 500,000 euros and 1 million euros, and seven projects have loan amounts exceeding 1 million euros.
Many Latvian companies are increasingly facing difficulties in finding employees, which can be addressed by implementing automation and digitalization processes. "We see excellent examples of how to best implement projects, so we encourage businesses to take advantage of this opportunity to increase work efficiency, exports, and develop successfully," emphasizes Zandberga.
So far, the most active region in implementing digitalization projects is Riga, where 51% of the supported companies are based. The second most active region is Vidzeme with 22%. The digitalization program is most popular among companies with a turnover exceeding 30 million euros, as 11 applications have been received from such companies.
The program is being utilized by companies from various sectors, including the meat product manufacturer Forevers and the woodworking company LV Timber. LV Timber from Smiltene has implemented a project with a total cost of 403,000 euros, of which 298,800 euros was an ALTUM loan. LV Timber exports 60% of its production. The company's goal was to improve production efficiency and competitiveness by introducing various digital solutions to become one of the top three producers of sauna boards in the Baltic States. The project significantly automated and digitalized the cross-cutting process for boards, resulting in more efficient production and reduced material waste, while also ensuring higher quality outcomes. Additionally, workplace safety was significantly improved by replacing and reducing manual labor. It is expected that LV Timber will be able to increase its production pace, fulfilling orders in a shorter time frame. By investing in digital transformation, the company has increased its sustainability, competitiveness, and export capacity.
Another successful example is Forevers, which implemented a project worth 2.2 million euros, with an ALTUM loan rebate of 566,000 euros. The project involved four investments to improve information technology and communication processes and nine investments related to production process digitalization and productivity improvements. As a result, the existing network, servers, and video surveillance infrastructure were significantly upgraded, and an automated and digitalized alcohol testing and access system was introduced. As part of the digital transformation of production processes, five out of seven production processes were modernized, including the distribution, processing, grinding, forming, dosing, and packaging of raw materials, thus ensuring a productivity increase in three product groups.
The "Loans for Digitalization" program is implemented under the European Union's Recovery and Resilience Mechanism #NextGenerationEU. It provides businesses with the opportunity to increase productivity by investing in process digitalization. Within the program, companies can receive loans ranging from 100,000 to 5 million euros, with a capital rebate of up to 35% of the investment project costs (excluding VAT), with a maximum rebate of 200,000 euros.
About ALTUM:
The Development Financial Institution ALTUM is a state-owned joint-stock company in Latvia, which, through state-supported financial instruments, provides support to specific target groups in the form of financial instruments (loans, guarantees, investments in venture capital funds, etc.), complementing them with non-financial support (consultations, mentoring) within specific programs, as well as performing other state-delegated functions. In June 2017, ALTUM received a long-term credit rating of Baa1 for a state-owned company from the international credit rating agency Moody's, confirming ALTUM's stable financial situation. On October 24, 2017, ALTUM bonds were included in the regulated market—the Nasdaq Riga Baltic Debt Securities list. ALTUM received the Nasdaq Baltic Awards 2019 prize in the "Stock Exchange Event of the Year in Latvia" category.