Saturday, 27th of March
Prime Minister cares about power grid project
Lithuania's Prime Minister Algirdas Brazauskas has urged Poland to intensify cooperation over implementation of Lithuanian-Polish power grid project, which has already secured the support of the European Union (EU).
Brazauskas tackled the challenges of the project at a meeting with Polish PM Leszek Miller, held on the sidelines of meeting of EU European Council of leaders.
Brazauskas asked his Polish counterpart to speed up the process of passing a resolution over establishment of a joint venture for the implementation of the power bridge project. Lithuanian government leader highlighted the importance of the bridge for Lithuania and Poland, as well as for the EU, noting that the bridge project was related closely with Lithuania's pledge to decommission Ignalina nuclear power plant.
Pursuant to the assessments of foreign experts hired by the European Bank for Reconstruction and Development, the power bridge project will be economically viable should the European Union earmark a grant of LTL 949.5 million to the project, valued at LTL 1.498 billion.
Audited profit of Mazeikiu Nafta for 2003 stands at LTL 220.946 million
The Lithuanian oil refinery Mazeikiu Nafta (Mazeikiai Oil or MN) reported that its preliminary net profit after audit amounted to LTL 230.946 million (EUR 66.9 million) in 2003, based on US General Accounting Principles (GAAP). The figure appeared on the information system of the National Stock Exchange on Friday.
In 2002, the oil refinery suffered a loss of LTL 114.3 million (EUR 33.1 million), also based on the above accounting standards.
The Russian oil concern of YUKOS owns almost 54 percent of MNs stock, sharing control with the Lithuanian government, which has nearly a 41 percent stake.
(Kauno Diena, Lietuvos Rytas)
The number of computers and washing machines in households has increased
Lithuanian families notably purchased more personal computers, TV sets, automatic washing-machines, and microwave ovens in 2003, the national statistical office announced on Friday.
Statistical figures found that 17 percent of the country's households had PCs, 58 percent had cellular phones, 48 percent had automatic washing-machines, 24 percent had microwave ovens, and 45 percent had cars.
The percentage of car owners amounted to 49 percent in cities and 38 percent in rural areas. The percentages for families with cellular phones were 66 and 42, and the numbers for families with computers were 22 and 7.
Further findings show that 90 percent of Lithuanian households own TV sets, 25 percent own video recorders, 26 percent own audio systems, 94 percent own refrigerators, and 42 percent own bicycles.
Friday, 26th of March
NSEL buyer will be clear in a week
The State Property Fund (SPF) will announce the winner of the National Stock Exchange of Lithuania and the Central Securities Depository of Lithuania privatization competition in a week.
"Tender participants have submitted improved offers and the commission will discuss them in a meeting this Friday or early next week," Antanas Malikenas, privatization director in SPF, said.
SPF does not reveal the potential investors prior to signing the agreement of share transaction.
OMHEX, the largest operator of North Europe stock exchanges, as well as the consortium of Warsaw Stock Exchange, Central Securities Depository of Poland and Euronext, the alliance of European bourses, have publicly announced about their participation in the tender.
Nearly two thirds of residents try their luck in lotteries, 3 percent in casinos
Nearly two thirds of Lithuanias residents who receive small wages purchase lottery tickets hoping to improve their lives, a polling and market research company TNS Gallup reports. According to TNS Gallup, 62 percent of Lithuanias residents purchase lottery tickets, 3 percent of them play in casinos.
TNS Gallup polled 1,000 Lithuanians in the age group 15-74 in February 2004.
The chief project manager of TNS Gallup Agne Ambrazeviciene claims that the most active buyers of lottery tickets are young people with secondary education who live together with the parents or have their own families.
People whose salaries vary from LTL 500 to LTL 1,500 are most keen on purchasing lottery tickets.
Most active casino visitors live in Vilnius and Klaipeda, most of them are 25-45 year old men.
The interesting fact is that 42 percent of the polled agreed that a casino was a devils work, while 41 percent said it was mens entertainment. Nevertheless, 45 percent of the polled would like to visit a casino.
Prices of alcohol beverages will go down slowly
Production of strong alcohol beverages has been liberalized as of January 1, 2004, but privatisation of alcohol companies has not brought any significant changes. Participants of the alcohol market claim that Lithuanias membership in the European Union will affect the prices of alcohol beverages the most. In the nearest future, consumers will be able to purchase alcohol at lower prices.
Dainius Kalina, the marketing director of Mineraliniai Vandenys, claims that prices of alcohol beverages will reduce until May 1, 2004. According to him, the company is ready to change the prices next week already but much will depend on retailers, too, whether they will reduce or raise their mark-ups. According to Kalina, alcohol prices are to shrink by 5-40 percent.
Jaunius Ziogas, CEO of Bennet Distributors, also says that pricing of many products has been revised already and forecasts that alcohol prices will reduce by up to 30 percent.
Many companies have already prepared new marketing strategies, new products therefore the main fight will start in May, Kalina believes.
Thursday, 25th of March
Gazprom would like to acquire more shares of Lietuvos Dujos
Representatives of the Russian gas concern Gazprom signed an agreement on the long-term gas supply on Wednesday thus completing the deal of Lietuvos Dujos (Lithuanian Gas or LD) stock privatisation.
They said Gazprom would participate in the privatisation of the rest of LD shares in future provided that the state decided to sell them.
Povilas Milasauskas, CEO of the State Property Fund (SPF), claims that the recently concluded deal provides stability not only to the Lithuanian gas industry but to the countrys economy in general.
The long-term gas supply agreement between Lietuvos Dujos and Gazprom will make it possible to cut gas tariffs for free users in the second half of this year already.
SPF, Gazprom and Ruhrgas have also signed a shareholders agreement, following which Gazprom and Ruhrgas will invest LTL 140 million each in the authorised capital of LD over a year.
The government of Lithuania retains a 25 percent stake in LD.
(Verslo Zinios, Respublika, Lietuvos Rytas)
Sampo Bankas plans growth
Sampo Bankas projects rapid growth for this year and aims at the fourth position in the market. The bank plans to open three offices in Vilnius and Kaunas and to establish an investment management company over a year.
Robertas Cipkus, director of the Finance Council of Sampo Bankas, said the coming 2-3 years are the years of development for the bank, shareholders do not expect profit during this period. This year, the bank plans to invest LTL 10 million in the development, last year the investments amounted to LTL 7 million.
Early this year, Sampo Bankas had a 3.6 percent market share in terms of assets and ranked the fifth among other banks, yielding to Snoras bank with 6.1 percent market share.
In 2003, the bank issued LTL 248 million worth credits to natural persons and LTL 318 million credits to business clients. The banks positions were strong in the housing loan sector: the loan portfolio amounted to LTL 247 million, i.e. 10.3 percent of the market.
Pensions and wages will grow
Starting April 1, the state social insurance base pension will grow by LTL 20, to LTL 172, while a minimal monthly wage will increase by LTL 50 as of May 1 (to LTL 500). By raising the base pension the government seeks to improve the financial situation of the elder people and the disabled.
It is believed that due to the raised minimal monthly wage, the cases of illegal wage should reduce and the purchasing power of workers receiving the minimal wage will grow.
(Lietuvos Zinios, Lietuvos Rytas, Verslo Zinios, Respublika)
Wednesday, 24th of March
LAL will launch more flights to Moscow
Lietuvos Avialinijos (Lithuanian Airlines or LAL) is to boost the number of flights to Moscow in early June; to Amsterdam in late March and to Brussels and London - on May 21. The company also presents new, smaller prices of flights to Stockholm and Copenhagen. The cheapest flight to the capitals of Sweden or Denmark will cost LTL 615 (airport fees not included).
Starting May 21, LAL will renew flights to Paris three times per week.
On the basis of a general route exploitation with the Spanish air company Iberia, LAL plans to offer flights to Madrid and Barcelona via Frankfurt on Maine or Brussels.
(Verslo Zinios, Respublika)
Unemployment rate in Lithuania reduces
The Statistics Department reports that positive changes have been observed in the labour market over the last years. As the volumes of production and service services grow, an increasing number of residents find jobs or start their own business.
Dalia Ambrozaitiene, deputy CEO of the Statistics Department, claims that the number of unemployed reduced by 27,000 in the period from the 4th quarter of 2002 till the 4th quarter of 2003.
She claims that the number of residents attributed to labour force is increasing: in the 4th quarter of 2003 the number stood at 1614 thousand, while a year ago to 1609 thousand.
According to Ambrozaitiene, the number of the unemployed is shrinking. In the last quarter of 2003, it amounted to 188,000, that is, the smallest figure since 1998.
However, the unemployment rate among the youth is growing. A year ago, it amounted to 23 percent, while in 2003 the average unemployment rate among the youth was 24.8 percent.
State will sell all ELTA shares
Lithuanian parliament has given the green light for the government to sell the state's remaining 39.5 percent shareholding in the news agency ELTA, which is now majority owned by the multi-business group MG Baltic.
The price that the state will ask for the shares is not announced yet.
At the end of April 2004, MG Baltic Investment, a subsidiary of MG Baltic, controlled 50.86 percent of ELTAs shares, while Achemos Grupe had another 6.75 percent stake in the news agency.
Tuesday, 23rd of March
Varos Group expands by purchasing companies shares
A Baltic companies group Varos Group (VG), which is installing specialised ITs in small technology companies of the Baltic countries, offers a new model of cooperation. According to the groups representatives, companies are offered to sell a part of their block of shares to Varos Group and thus become groups members. Varos Group hopes to start cooperating with 10 Baltic companies following this model over this year.
Last year, VG completed reorganisation of its structure in all the Baltic countries, at present it has three companies operating in Lithuania, Latvia and Estonia.
The first company to become VG member following the new partnership model, UAB Girba, specialises in electronic security control system design and installation. The head of Girba Bagdanskis claims that the membership in a big group will provide the company with bigger stability and a possibility to invest in new solutions.
Companies executives want euro
Almost three-fourths of senior corporate executives in Lithuania support the government's plans to adopt the euro as the national currency, a survey has revealed.
In a poll carried out by the market research and public opinion company Baltijos Tyrimai (Baltic Surveys), 73 percent of respondents said they approved of membership of the euro-zone, while opponents of membership numbered 19 percent.
The central Bank of Lithuania announced the results of the survey on Monday.
Some 55 percent of respondents said that the re-pegging of the litas to the euro in February 2002 had had a favourable impact on the Lithuanian economy. Some 20 percent said the shift of the peg from the US dollar to the euro had had an adverse effect on the economy, and another 13 percent said that this had had no impact at all.
Reinoldijus Sarkinas, the governor of the Bank of Lithuania, and other officials have said that Lithuania will begin negotiations on joining the euro zone immediately after its accession to the European Union on May 1 this year and that it will be ready to adopt the euro on January 1, 2007.
(Lietuvos Zinios, Verslo Zinios, Lietuvos Rytas)
Norfa turns to Lithuania / Norfa turns from Russia to Lithuania
Norfos Mazmena has suspended its plans in Moscow, Russia, for a while: instead of rapid expansion in Russia, the chain will open only three stores in Moscow. Norfa plans to return to Moscow no earlier than in 2008, when it will complete the vision of development in Lithuania. The retail chain plans to boost the number of trade centres in Lithuania up to 200 and maybe even open several Hipernorfa trade centres.
At present, Norfa controls 70 trade centres in Lithuania and plans to open 24 new stores by the end of this year. It is projected that the companys turnover will reach LTL 1 billion for 2004.
Andrius Stonkus, project manager of ReSolution agency, claims that the strategy of Norfos Mazmena to open 1,500 m_ area stores in smaller towns is justifying hopes. However, he is surprised by Norfas plans to open hyper trade centres. In Stonkus opinion, this idea might not be successful due to Norfas image and undeveloped relations with the suppliers.
Monday, 22nd of March
Trade gathers speed
Relying on the data of Autotyrimai company, 1,630 new cars were sold in Lithuania in January-February 2004, a 31.8 percent rise since the relevant period last year.
775 new automobiles were sold in the country in February, 25 percent more than in February 2003, however, 9.4 percent less than in January 2004. 91.8 percent of new automobiles sold over two months of this year were registered in Lithuania.
The most popular automobiles in the country this year are Renault (196 cars sold over two months of this year), Peugeot (151 cars) and Toyota (136 cars).
Trade giants fight for place under the sun
Opening of the big trade centres, such as Europa, VCUP in Vilnius and Molas and Hyper Maxima in Kaunas have gladdened buyers but perturbed some traders.
It is feared that trade giants, located near each other, will fail to share the buyers. This was obvious in Kaunas, when after the opening of Hyper Maxima in Savanoriai prospect, the flow of buyers to the recently opened Molas trade centre subsided significantly. A similar fate is forecasted for Vilnius Central Supermarket, near which Europa trade and entertainment centre has been opened.
It is feared that big trade centres will outrival the central trade streets - Gediminas prospect in Vilnius and Laisve alley in Kaunas. As a result, prices of commercial premises and their rent will start falling there and a part of shops will go bankrupt.
Real estate specialists disperse such fears and claim that Vilnius and Kaunas lag behind not only the average of the Eastern Europe but also behind Latvia and Estonia with regard to the trading area per capita.
Strong euro brought profit to Mazeikiu Nafta
Bruce K. Misamor believes that exceptionally good financial results of the Lithuanian oil refinery Mazeikiu Nafta (Mazeikiai Oil or MN) for the last year were preconditioned not only by successful management of Yukos but also by favourable situation of the European oil product market. Bruce K. Misamor is the vice-president for economy and finances of Yukos, the main shareholder of MN.
MN posted LTL 230.249 million non-audited net profit for the last year according to the US accounting standards. In 2002, the oil refinery incurred LTL 114.3 million loss.
The head of MN Communications Service Giedrius Karsokas also said that the company has reached good results thanks to positive tendencies in the global oil product market that MN has successfully used.
Brewers will march to Poland
Lithuanian brewers plan to launch export to Poland after May 1: some of them have signed sales agreements, others are clarifying their possibilities. Market researches reveal that the Polish beer market is growing annually, consumption of canned beer grows and there are no PET bottles, which are so popular in Lithuania.
AB Ragutis, AB Svyturys-Utenos Alus and AB Gubernija are interested in the Polish market. The latter is already exporting bread kvass to Poland.
VP Market plans to open stores in Poland this year, too.
Baltic Weekly MonitorA