Formation of a group with a turnover of EUR 1 billion: management of the VMG Group moved to...

Formation of a group with a turnover of EUR 1 billion: management of the VMG Group moved to Lithuania


The management of Vakarų medienos grupė (VMG Group), a group of wood processing and furniture production companies, has been transferred to Lithuania, where it will be managed through the VMGcorp investment management company registered in Vilnius. According to plans, approximately 700 million euro will be invested in new companies and new business directions by 2025-2027.

“In 2009, when we were forced to make investments in Mogilev (Belarus) instead of doing it in Alytus, the jurisdiction of Cyprus was more favourable. This was due to better relations between the parties and more favourable contractual terms and conditions,” explained Mr Sigitas Paulauskas, the sole shareholder of the VMG Group.

Vakarų medienos grupė has so far been managed by VMG Holdings, a Cyprus-based company.

The VMG Group, which will continue to develop its activities in already six strategic directions, is being transformed into an investment group, the turnover of which will exceed 1 billion euro.

Having implemented one of the largest greenfield investments in Lithuania, the construction of a particle board plant in the Akmenė FEZ, the Group will also soon complete the construction of a furniture plant in the FEZ, which is already “under the roof”. Up to 2022, the investments in the latter plant will total EUR 76 million, as well as about 500 new jobs will be created.

In 2021, the Group will begin the construction of a new engineered wood plant.

VMG Engineered Wood will produce industrial wood structures for low-rise and high-rise buildings that would replace reinforced concrete. This is in line with the European Green Deal. The plant is currently being designed, and the construction work will start next year,’ the businessman shares information.

Our investment in the field of industrial innovation and technology is the construction of an automation and robotisation solutions plant in the VMG Industrial and Business Park in Klaipėda District.

“The construction of the new plant will commence this year. We have so many new technology development projects that we need to have a new plant built as soon as possible. The processes have already been arranged, and we hope to receive the construction permit in December and start the construction work,” says the shareholder of the VMG Group.

All plants will be equipped with rooftop solar power plants, and, where possible, e.g., in the Akmenė FEZ, wind power plants will be installed as well. This is the line of business of VMG Energy.

Based on forecasts, the investments in the development of the renewable energy park only will reach about 50 million euro by 2023, while, within the next five years, over EUR 25 million is planned to be invested in the development of infrastructure and real estate solutions to reduce the impact on the environment, as well as the investment of EUR 150 million is planned for the development of production of ecological engineering wood structures.

In a couple of years, we also plan to start the construction of a plant for ecological packaging solutions, i.e. cellulose, which could become a substitute for plastic, will be produced there from wood processing waste following the thermal and mechanical treatment.

New structure of the Group

“A few weeks ago, we approved the strategy, set up the structure, and the need for investments,” says S. Paulauskas.

Lignum Holding Foundation should protect the business successors in the event of the departure of the main shareholder in order to avoid dismemberment of the business – they will be the beneficiaries.

Vakarų medienos grupė, UAB will continue its operations in the wood processing and furniture industry business.

VMG Lignum, UAB will be open – investors will be attracted to these companies.

“To implement all projects as soon as possible, we turn to investors – be they banks, funds or other private investors,” says the businessman.

Sales of the new VMG Group are expected to triple by 2025, exceeding EUR 1.1 billion.

The VMG Group currently unites 25 companies, employing over 4,500 workers. The products of these companies are exported to more than 40 countries around the world.

The unconsolidated sales of the Group in 2019 totalled 394 million Euro, which marked 13% increase over the year.

The Group makes record investments in the Akmenė Free Economic Zone. In September, one of the largest greenfield investment projects in the history of the country was accomplished, the construction of a particle board plant of the VMG Group requiring an investment of EUR 146 million and creating 140 high value-added jobs.

VMG Group is the Operator of the Akmenė FEZ.