Baltic Elevator Market

Set for growth this year despite ongoing military escalation in Eastern Europe

The elevator market of the Baltic states of Latvia, Lithuania and Estonia is steadily developing despite the ongoing military conflict between Russia and Ukraine and the existing military threat to the Baltic region. Despite the active urbanization and rapid economic development of all three former Soviet states, which has been observed in recent years, the technical condition of their elevator stocks, particularly in residential housing of all three countries, has been poor.

According to earlier data provided by Latvian authorities and the country’s media reports, every second elevator in the country has been in operation for more than 25 years, which significantly exceeds the lifetime of at least half of the existing elevator stock of the country.

The situation is also complicated in that more than half of the elevators in the country do not meet the requirements of local regulations, as well as the European Union (EU) norms in this field. This is despite the fact that beginning September 1, 2000, only elevators that meet the common EU requirements can be installed in Latvia.

As a rule, most high-rise buildings in Latvia and other countries in the Baltic region are equipped with Soviet-era elevators manufactured between 1972 and 1990, mainly by Belarusian manufacturer Mogilevliftmash. According to Mogilevliftmash, the service life of its elevators is 25 years, with the need to overhaul every 15 years.

When Latvia joined the EU in 2004, it became obvious that Mogilevliftmash’s elevators did not comply with European safety standards. The EU standard describes 74 possible risks for elevators, but at least three can be found in elevators supplied by the Belarus plant.

While Latvian officials promised to solve this problem within 10 years (as part of a phased renovation plan for the country’s residential housing with an overall investment of more than EUR30 million), the current rate of elevator renewal in high-rise buildings in the country remains slow.

According to the Latvian Ministry of Economy, beginning in April 2022, a new regulation on the safe operation of elevators came into force in the country and tightened restrictions for the technical condition and the use of elevator stock.

In the meantime, neighboring Estonia also has plans for the massive renovation of its residential stock, and in turn, replacement of its elevators.

According to recent statements by Jüri Ratas, a well-known Estonian politician and head of the Estonian Center Party, taking into account that a significant part of the Estonian residential stock consists of so-called Khrushchyovkas (an unofficial name for a type of low-cost, concrete-paneled or brick three- to five-storied apartment building which was developed in the Soviet Union during the early 1960s when its namesake Nikita Khrushchev directed the Soviet government), there is an acute need for modernization. This also involves installing new, modern elevators. Currently, the bulk of such housing lacks elevators.

According to Ratas, there are plans to use the experience of Eastern European states, particularly those that were under the communist protectorate during the Cold War, that in recent years have also faced the problem of operating apartment buildings built in the 1960s and 1970s with a lack of elevators. As a rule, most occupants of such houses are elderly people or people with physical handicaps, which means that installation of elevators is an acute need.

Ratas believes that elevator installation in such low-rise residential buildings can significantly address the accessibility problem of such buildings. According to him, cost-effective options for implementation of these plans exist. He commented, “In this case, two solutions are under consideration: either installation of the elevator on the façade of the building or in the entrance.”

According to some Estonian media reports, similar projects in recent years have been implemented in a number of cities in Germany and Sweden, although the latter was never affiliated with any communist regimes.

Despite the relatively small size of the local markets, the Baltic states have always been of interest to some global elevator manufacturers. KONE spokesperson Scott McMahon commented:

“At KONE, we have operations in all three Baltic countries, and we have been around for 30 years (Estonia since 1991, Latvia and Lithuania both since 1994). The key drivers behind growth in these markets are the same as in other European countries: urbanization, digitalization and sustainability.”

Representatives from Otis also confirmed their plans for development in the Baltic market and its importance for their business. Andrew Bierer, market group leader, U.K. and Nordics, Otis, said:

“Otis is currently present in all three Baltic states. We manage our own entity in Estonia, providing new equipment sales, installation, modernization and service. Our presence in Latvia and Lithuania is via two independent distributors. We do not have any plans to change our presence in the Baltics. We constantly monitor the environment to act in the best interest of our customers and shareholders. The Baltic economies have grown steadily over the last several years. In Estonia, in particular, projections predict construction sector growth will remain strong in the years to come, especially in the residential and commercial segments.

As for Estonia, according to official state data, the elevator stock of the country exceeds 5,000 elevators, approximately 1,000 of which are in the capital, Tallinn, as well as in Tartu, Narva and other major cities. Most elevators are used in high-rise structures built in the Soviet era, and have been operating for 30 or more years.