A Lithuanian furniture maker has been forced to freeze plans of investment after the United Kingdom, its biggest export market, voted to leave the European Union.

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Aukmergės Baldai, based in Ukmergė, north Lithuania, sends over 80% of its production to the UK, where it is sold at Next stores, vz.lt reports.

"We also export our products to the United States and Switzerland, so we can compare what it means to trade when there is customs involved, additional documentation, inspections and all that. We do not know what the terms will be for bringing our production to England, so we are looking for new markets and new buyers," Jonas Petrauskas, director of Aukmergės Baldai, tells vz.lt.

He is also being asked by his partners in the UK to cut the prices because of the sudden drop of the British Pound. Long-term contracts with Next have been signed in euros.

As a result of the uncertainty and turmoil in the wake of the Brexit vote, Aukmergės Baldai has decided to freeze some of the investment planned for this year and not to buy new equipment worht more than €100,000.

"We have stopped all purchases until we see what happens next," Petrauskas says, adding that he does not want to invest into new production lines just to have them stand idle if there are no orders.

Laura Galdikienė, chief economist at Swedbank Lithuania, has said that companies exporting a significant part of their production to the UK may have to deal with a prolonged period of uncertainty due to Brexit. Moreover, it means narrower profit margins and the need to look for new markets.

In the short term, Lithuanian exporters may be hit by the depreciation of the British Pound.

In 2015, the UK accounted for 4.5% of exports of Lithuanian goods and 6.6% of total exports from Lithuania.

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